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Minister Tau makes headway in persuading Washington not to drop SA from Agoa

Minister Tau makes headway in persuading Washington not to drop SA from Agoa
Peter Fabricius
By Peter Fabricius
29 Jul 2024
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The formation of the Government of National Unity seems to have been new Trade and Industry Minister Parks Tau’s ace card.

New Trade, Industry and Competition Minister Parks Tau and his deputy Andrew Whitfield have made progress in persuading Washington that South Africa should not lose its duty-free access to the US market under the African Growth and Opportunity Act (Agoa).

On their first major international assignment, Tau and Whitfield visited the US capital last week to participate in the annual Agoa Forum and to lobby leaders of the Biden administration and, more importantly, Congress, not to evict SA from Agoa.

Republican members of Congress in particular had threatened to do so because of their perception that Pretoria is too friendly with US enemies, Russia, China and Iran, and is hostile to Israel. 

Washington insiders told Daily Maverick that Tau’s message had “landed extraordinarily well” with the Biden administration, though they stressed that it was Congress that he had to persuade. In Congress, it seemed the formation of the Government of National Unity (GNU) had greatly assisted Tau’s lobbying efforts.

This has given SA a “honeymoon period” for retaining its Agoa status because of the perception that it would adopt more moderate positions on trade and even foreign policy.

Positive signs


The assistant US trade representative for Africa, Constance Hamilton, told African journalists on Monday that Tau had a “very good bilateral meeting” with his counterpart, US Trade Representative Katherine Tai.

“I think it was an opportunity for them to get to know each other to express their desires about Agoa going forward.”

She noted though that the annual review of which countries should be eligible for Agoa was currently under way “and South Africa, like all the other countries, will be evaluated based on the criteria and then we’ll have a decision, but it’s too early now to predict what the outcome will be for any country.”

The US deputy assistant secretary of state for Africa, Joy Basu, said the US government had welcomed the engagement with Tau and his delegation, which included members of the private sector, labour and civil society. 

“I think it was clear that our partners in South Africa have heard the concerns that were raised last year and that there’s been close engagement on multiple levels and that the Government of National Unity is here to express its intention to be responsive to the concerns and to really build and expand on the important strategic relationship that the United States and South Africa have,” said Basu.

Read more: SA Trade Minister Parks Tau urges US to extend Agoa to help Africa industrialise

Tau did not address SA’s participation directly in public remarks to the Agoa Forum. He said the “reauthorisation of Agoa will also enable the US market to benefit from an expanded basket of goods from sub-Saharan beneficiaries”.

He added that Agoa would complement the African Continental Free Trade Area (AfCFTA), which is creating a single market across Africa. Creating long-term certainty about Agoa benefits would help Africa industrialise by enabling African countries to better plan their economies and establish production capacity, he said.  

Tau and Whitfield will brief the media about their trip on Tuesday, while SA’s other deputy trade minister, Zuko Godlimpi, will brief the media about his visit to Russia last week to attend a meeting of BRICS trade ministers. 

Agoa, which is open to eligible sub-Saharan African countries, gave duty-free access to the lucrative US market for $3.6-billion of South African exports last year, a spokesperson for the US embassy in Pretoria said.

All SA exports to the US in 2023 totalled $13.976-billion, while US exports to SA totalled $7.125-billion. SA exports to the US under Agoa in 2023 represented just over a quarter of all its exports to the US and it registered a trade surplus of $6.851-billion with the US last year.   

Dampened criticism


SA has been under attack in the US, mainly from conservative Republican members of Congress — though with some Democratic support — who have tabled legislation that would oblige the Biden administration to conduct a comprehensive review of US-SA bilateral relations that includes an assessment of whether SA is undermining US national security and foreign policy interests.

These legislators have been antagonised over the last two years by the ANC government’s friendships with Russia, China and Iran — and its perceived hostility to Israel, particularly in taking it to the International Court of Justice on charges of genocide in Gaza.

If the legislation proposed by Republican Representative John James passes and the Biden administration is forced to review US-SA relations and particularly to investigate whether SA has undermined US national security and foreign policy interests, this could jeopardise SA’s continued participation in Agoa.

But even without James’ legislation, Agoa itself makes provision for US legislators or officials to review a country’s participation at any time.

However, a close observer of US-SA relations who participated in the Agoa Forum said he sensed that the issue of removing SA from Agoa “has become muted now that James’ legislation has passed and SA had such a compelling outcome in its elections”.

Other sources agreed that SA was now unlikely to be removed if, as expected, Agoa was renewed as a whole next year. But they added that this would probably only be temporary and Congress would continue to closely monitor SA’s foreign policy positions. 

“I do not think the GNU has secured SA’s long-term eligibility, but there will certainly be something of a honeymoon period as we watch to see the direction the GNU charts in the coming months,” a Washington insider told Daily Maverick.

“As a result of this honeymoon period, I would expect SA to keep its eligibility for next year. 

“However, the concerns that exist here about the ANC’s ties with Moscow, Beijing and Tehran and its consistent anti-Israel sentiment are strong and, pending a significant shift in foreign policy from [Dirco] Minister [Ronald] Lamola (which we do not expect), will remain. 

“This will keep the ‘undermining US national security’ argument relevant as it pertains to Agoa eligibility going forward. If the GNU were to collapse, these concerns would only be strengthened.”

Ongoing uncertainty


The Agoa programme as a whole is up for renewal by Congress next year. Both President Joe Biden and Secretary of State Antony Blinken strongly supported the renewal of Agoa in messages to the annual Agoa Forum in Washington last week. 

It is less clear what a victory by the unpredictable Republican presidential candidate Donald Trump would mean for the future of Agoa.

Hamilton confirmed to the African journalists on Monday that the US administration remained committed to Agoa and said she was pleased that members of both parties in Congress had also expressed their commitment to its reauthorisation.

She said the forum had focused on how to increase the use of the programme. She noted that Agoa had been primarily intended to help developing countries grow their economies but this had largely not happened. 

The forum also discussed how to better promote worker-centric trade policies and how to strengthen partnerships to drive economic opportunities for Americans and Africans. 

“We explored barriers that women, youth, micro and small and medium-sized enterprises and the African diaspora face in accessing trade and investment opportunities. We explored how to better use the multilateral trading system to benefit more people, especially those in underserved communities. 

“We also discussed opportunities to modernise the Agoa programme to realise its full potential as a tool for development and to support regional economic integration. 

“And we discussed how the United States and Agoa partners can collectively create and promote stronger high-standard investment opportunities.” 

Read more: South African carrot juice producer Rugani steals the Agoa show

Several participants at the Agoa Forum stressed the urgent need to give potential investors greater certainty that Agoa would be renewed.

Paul Ryberg of the African Coalition for Trade, which represents mainly textile and apparel producers on the continent, said Agoa had created more than 100,000 direct jobs in Africa and well over one million indirect jobs in textiles and apparel.

He said orders for textiles and apparel were typically negotiated more than a year in advance and investments were planned more than two years ahead. In 2022, a record was set for the exports of textiles and apparel to the US from Africa under Agoa.

However, volumes had dropped by 21% in 2023 and by a further 30% to June in 2024 because of uncertainty about whether Agoa would be renewed when it expires in 15 months. The most important message to send to Congress, he said, was that Agoa should be renewed now — not next year. DM

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