Agoa, not a trade agreement with the US, makes the best sense for South Africa

As the impasse between South Africa and the US continues to grow, there has been speculation that Pretoria’s participation in the African Growth and Opportunity Act (Agoa) may not be renewed. This is attributed mainly to South Africa’s foreign policy stance on Israel and its close relationship with Iran.

Indeed, Agoa has a non-trade conditionality which provides that beneficiary countries should not engage in acts that undermine US foreign policy and national security objectives. A narrow reading of the Agoa instrument demonstrates that South Africa has, for quite some years, been in violation of these twin tenets.

However, Pretoria’s participation in Agoa has not been withdrawn before. The main reason is that, to the US, Agoa is more about maintaining control than trade. It is part of the US’s carrot-and-stick mechanism to exert its influence within the African continent.

There is no better place that the US would want to maintain that leverage than in sub-Saharan Africa’s most strategic and dynamic player, South Africa. Similarly, in north Africa, the US maintains a firm grip on another strategic player, Egypt, through the provision of military aid amounting to billions of dollars per year.

Agoa is a key strategic geopolitical and geoeconomic tool for the US in sub-Saharan Africa. Even an administration that pursues a Nixonian “mad” foreign policy, such as the current one in Washington, would not easily want to give up its grip or leverage on such a strategic country as South Africa.

While President Donald Trump has no discernible South Africa policy, his administration’s thinking on the continent can be gleaned from the US-Africa Strategy of 2018. That strategy had at its core the containment of China and Russia in Africa through trade and investment. This is further confirmed through a reading of Trump’s globally focused America First Investment and Trade Policy announced in January 2025.

In the realist tradition within which Trump operates, Agoa is the closest tool his administration has to wield influence in sub-Saharan Africa, more so in the main beneficiary country, South Africa. It is for this reason that Pretoria is best advised to put more weight into Agoa negotiation and retention than a reciprocal trade deal at this point.

Public statements emanating from some senior figures in the Ramaphosa administration have indicated that South Africa intends to propose a reciprocal trade agreement as a replacement for Agoa in case the latter is not renewed. There are unverified reports that South Africa would want to request a six-month extension of preferential trade while negotiating a reciprocal trade agreement.

If this is indeed what Pretoria intends doing, one would hope that this is not pursued at the expense of negotiating with the US within an Agoa framework. This is because it will be highly impracticable for South Africa to negotiate and conclude a trade deal of any kind with the US within a six-month period.

In the unlikely case that the Trump administration has the appetite for a marathon trade agreement negotiation process with Pretoria, history teaches us that negotiating with the US is a tough and arduous process. The US has some of the toughest trade negotiators who seek to elicit as many concessions from their counterparts as possible.

It is not clear whether South Africa – or rather, the Southern African Customs Union, since such negotiations will have to take place under a customs union umbrella – can assemble the requisite negotiators within that time limit. This is not to mention the necessary consultations with business and civil society.

Some of South Africa’s most experienced trade negotiators have retired while others are doing stints at the African Continental Free Trade Area (AfCFTA).

Relatedly, if South Africa indeed wants to open a trade negotiation front with Washington, it may be wise to deploy to Washington as ambassadors seasoned trade policy veterans such as Xolelwa Mlumbi-Peter, Xavier Carim or Faizel Ismail. This trio has massive trade negotiation experience and leadership, all having served as South Africa’s permanent representatives to the World Trade Organization at some point since 1994.

Wamkele Mene, a former chief negotiator for South Africa in the Tripartite Free Trade Area and subsequently at AfCFTA, would have been a potential fit, but he is currently serving his second term as secretary-general of the latter organisation in Ghana and doing a sterling job.

One could therefore argue that if Washington is foremost on Pretoria’s mind in terms of trade and investment, a career diplomat well versed in these areas would be relevant. The geopolitical and geoeconomic angle could be handled through shuttle diplomacy, through a special envoy. In terms of trade diplomatic leadership, South Africa is therefore spoilt for choice.

However, in a case where the US is open to negotiate with South Africa on a reciprocal basis, the same issues that bedevil Pretoria’s Agoa participation will become contentious in such negotiations. The US has 20 reciprocal trade agreements, none of which is with a sub-Saharan African country. Washington’s trade agreements incorporate a range of issues including intellectual property rights, competition policy, procurement and investment rules, labour and environmental standards.

These are areas South Africa would want to preserve in the policy space, but which would most likely be eroded by a reciprocal trade agreement with the US.

US trade negotiators would raise issues around South Africa’s protection of intellectual property rights as currently South Africa pursues a developmental intellectual property rights regime. This is a policy framework that pushes to produce generic medicines through mandating pharmaceutical firms to share their patented formulas to produce cheaper and affordable drugs.

South Africa’s competition policy has a public interest provision requiring consideration of public policy in merger approvals. An illustrative point was when Burger King was taken to task by the authorities for not wanting to sell part of its stake to a B-BBEE partner. The envisaged trade negotiations for a reciprocal trade agreement will have US negotiators wanting to lock in provisions that would have US firms exempted from such rules.

In the procurement space, there is no doubt that the US would want exemption from rules that require a 30% consideration for black-owned SMMEs, or MSMEs as they call them. Over and above this, the US would want to insert a “Musk provision” in the trade agreement which would do away with the need for a 30% partnership or gifting to a B-BBEE partner when investing in the country.

In a nutshell, the US negotiators would adopt an offensive posture as they seek to open the South African market to more US companies and products. South African negotiators may find themselves in an unenviable defensive position on policy issues that are current sticking points with Washington.

That notwithstanding, a strong point for South Africa would be around critical minerals, though the US may not concede on the point around beneficiating them at source. The negotiations will therefore be difficult, prolonged and most likely leave South Africa having to concede on some key policy issues that may seem non-negotiable at this stage.

Trade negotiations are by nature complex, even among and between countries with similar economic and political traditions. Different economic and policy approaches, as in the Pretoria-Washington case, would make them even more messy and prolonged, if not deadlocked.

The Pretoria-Washington trade relationship would best be governed by a reciprocal trade and investment agreement. However, it would be suicidal for Pretoria to be the one requesting such negotiations under the current climate, unless the country is prepared to make some huge concessions to the Americans.

A better approach would be to find manoeuvres within Agoa’s US foreign policy provision through trying to find areas of convergence with the US administration on the Israel-Palestine issue, perhaps through exploring non-confrontational (including non-litigious) means to find a lasting solution.  

South Africa has a long-tested history in conflict resolution, both at home and abroad, exemplified by the role the country played in bringing peace to Ireland. The US has Israel-Palestine conflict fatigue. A Pretoria that brings innovative solutions to end the Israel-Palestine conflict could have a better reception in Washington.

When the dust has settled, Pretoria could then open a discussion around a reciprocal trade and investment agreement with the US, negotiations which would no doubt take years to conclude, as the Kenyans have realised.

Pretoria should at this stage take a cue from Swazi diplomatic culture which teaches us that when the water is choppy, one should be like reeds that lie low in flooded waters, waiting for the storm to subside. DM