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'Future of SA-US trade relationship murky'

'Future of SA-US trade relationship murky'

SA-USA trade data

$ million, YTD to Sept 2016

Published date:
Thursday, 10 November 2016
Author:
Dineo Faku

US President-elect Donald Trump’s ascension to the country’s highest office yesterday sparked fears over the future of South Africa’s trade relationship with the US through the African Growth and Opportunity Act (Agoa).

Daniel Silke, a political economic analyst, said yesterday that Trump’s victory coupled with the Brexit vote earlier this year signalled uncharted territory for African markets and developing countries.

Silke told delegates at the 46th annual International Association of Financial Executives World Congress held in Cape Town that Trump’s presidency would leave many African countries worried about the future of Agoa.

“Agoa has been toughly negotiated even under the (President Barack)Obama administration,” Silke said. “With a Trump presidency, accompanied by a Republican-run Senate and Congress, this could make the US less inclined to have beneficial agreements for Africa.”

Agoa was signed in 2000 to extend tangible incentives for sub-Saharan African countries to promote diversification of exports into the US.

The US-South African trade relationship garnered significant attention last year, following Obama’s notice to South Africa that the country’s benefits under Agoa would be suspended if it continued to impose long-standing trade barriers to US trade.

Following intense negotiations between the US and South African trade officials an agreement was reached that saw the import of US products into South Africa.

“My concern is that Agoa could become onerous on South Africa, or we could have a situation where South African imports could have higher tariffs to enhance the competitiveness of US products,” Silke said.

He predicted that under Trump’s leadership, there could be a trend of greater protectionism in the US.

“Trump could move to benefit the agricultural heartland in the US, especially the farm belt who voted for him. He will need to answer to that constituency,” Silke said.

“I fear that it will take special negotiation skills for South Africa and the rest of Africa to hold on to Agoa.”

Silke said he expected Trump would probably do what he said he would do.

“I think I would be cautious about how Trump will react to Africa,” Silke said.

However, Sidwell Medupe, a spokesman at the Department of Trade and Industry, said yesterday that there was no need for panic because the Agoa policy was here to stay after being endorsed by the US congress following a number of presentations and assessments.

“South Africa is going to be [part of] Agoa up until 2025 after a Congress decision. It was a decision endorsed by Congress and not a decision by a president,” Medupe said.

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