
Minister of Trade, Industry, and Competition Parks Tau commended the recent announcement from the United States that confirms South Africa will retain its trade advantages under the African Growth and Opportunities Act (Agoa) for another year. He remarked on Monday that this choice “creates a solid foundation for strengthening SA-US relations.”
This announcement from the Biden administration came over the weekend, just before President-elect Donald Trump’s inauguration in January. As a result, South Africa will maintain its participation in the program for at least another year; however, the South African government plans to advocate for its interests with Trump during next year’s review and in the lead-up to the G20 Summit in Johannesburg.
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Under Agoa, South Africa, along with 31 other sub-Saharan African nations, benefits from duty-free access to the US market.
In a statement issued on Saturday, December 21, US Trade Representative Sam Michel confirmed that the list of countries eligible for Agoa remains unchanged, as does the list of those ineligible.
“After the annual Agoa eligibility review, which featured a public hearing in July chaired by the Office of the United States Trade Representative, President Biden has chosen to sustain Agoa benefits for all currently eligible nations,” Michel stated.
“South Africa looks forward to working together with the US in ways that are mutually beneficial,” Tau added.
Additionally, the minister expressed satisfaction that the National Defense Authorization Act, sent to Biden for approval by the US Congress, does not contain provisions regarding the reassessment of SA-US relations.
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In June, the US House of Representatives approved legislation that requires the Biden administration to perform a detailed review of America’s relationship with South Africa.
This decision was influenced by South Africa’s connections with Russia, China, and Iran, and involved assessing whether these relationships jeopardized US national security.
Lobbying by SA
Since forming the government of national unity, the new administration has actively attempted to repair connections with the United States.
In September, Minister of International Relations and Cooperation Ronald Lamola visited Washington DC, calling it a “productive working visit.”
Two months prior to Lamola’s visit, Tau and his deputy Andrew Whitfield attended the 21st Agoa Summit in the US from July 24 to 26.
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In a media briefing following the Agoa summit, Tau expressed hopes that South Africa’s benefits would be renewed before the US elections in November 2024. He indicated that the “least desirable” outcome would be a delay in the decision on Agoa until 2025.
Trade dynamics under Trump
The possible return of Trump to the presidency in November raises concerns about a potential global trade conflict should he follow through on his promise to impose increased tariffs.
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South Africa could come under intense scrutiny, not only for its position regarding Israel and its relationships with Russia but also for its membership in the BRICS group.
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In early December, Trump cautioned on his social media platform Truth Social that BRICS nations risk “100% tariffs” if they attempt to create a new currency to replace the dollar.
“We demand guarantees from these nations that they will neither create a new BRICS currency nor endorse any other currency to supplant the mighty US dollar, or else face 100% tariffs and lose access to the splendid US market,” Trump proclaimed.
Trade statistics between US and SA
South Africa’s exports to the United States have significantly increased over the past five years, rising from US$1.9 billion (approximately R35.2 billion) in 2019 to $3.3 billion (R61.12 billion) in 2023 under Agoa, alongside the Generalized System of Preferences (GSP) initiative.
In 2023, 25% of South Africa’s total exports to the US were conducted under Agoa and GSP, with Agoa representing 21% of that total, as noted by Tau.
Key exports from South Africa under Agoa comprise automotive parts, ferro-alloys, citrus fruits, jewelry, nuts, chemicals, wines, and vessels.
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According to Tau, Agoa, instituted under President Bill Clinton in 2000 and extended twice, is scheduled to expire at the end of September 2025.
There are optimistic expectations for its renewal by the US government.
“South Africa, in alignment with continental efforts, has urged Congress to contemplate renewing Agoa for a minimum of 16 years while keeping all countries in the program to enhance and develop regional value chains,” Tau stated.
“Retaining all beneficiary nations will ensure that Agoa continues to support the African Continental Free Trade Agreement and promotes the continent’s regional integration initiatives.”
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