Powerful US Senator Jim Risch – South Africa’s chief foe in Congress – has tabled legislation which says the US administration should shift this year’s forum of the Africa Growth and Opportunity Act (Agoa) from South Africa to another country.
Risch, the senior Republican on the Senate Foreign Relations Committee and the member of Congress most critical of South Africa’s warming relations with Russia, attached the proposed legislation on Agoa as an amendment to the gigantic bill to authorise the budget for the Defence Department for fiscal year 2024.
Another amendment to the defence bill tabled by Risch says the US Secretary of Defence in consultation with the Secretary of State and other relevant departments and agencies should submit to Congress a report assessing “the extent to which the foreign policy of the Republic of South Africa threatens United States national security interests…”
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A well-informed analyst in Washington believes that both amendments will pass – because Risch is too powerful to be opposed. But he also believes the enactment of the amendments will probably come too late to shift the Agoa forum, which is due to take place in November this year.
Both amendments are nonetheless disturbing indications of the trajectory Congress is on and increase the chances that South Africa will lose some or all of its Agoa benefits next year. Agoa gives duty and quota-free access to the US market for many South African exports and has been especially valuable for vehicle manufacturers and wine and fruit producers.
Risch’s amendment says the annual Agoa forum “is an important opportunity to foster close economic ties between the United States and sub-Saharan Africa; the country selected to host the 2023 AGOA Forum should reflect optimal adherence to the eligibility requirements … that the country ‘not engage in activities that undermine United States national security or foreign policy interests’ ”.
‘Inappropriate venue’
Risch says “the recent actions of the Republic of South Africa in contravention of United States national security and foreign policy interests make that country an inappropriate venue for the 2023 AGOA Forum; and the President should identify an alternative venue for the 2023 AGOA Forum that is consistent with the spirit and member eligibility criteria of the African Growth and Opportunity Act”.
The recent actions by South Africa which Risch refers to have been extensively tabulated by him and other members of Congress and the US administration.
They include Pretoria’s consistent abstention from all resolutions at the UN General Assembly condemning Russia’s invasion of Ukraine; South Africa’s participation in a joint naval exercise with Russia and China in February this year on the first anniversary of Russia’s invasion of Ukraine; the docking of a US-sanctioned Russian ship, the Lady R, in Simon’s Town in December, which US ambassador Reuben Brigety believes loaded arms for Russia; and other engagements between SA and Russian government and military officials, which the US sees as signs of warming ties.
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These suspicions are spelt out in Risch’s other amendment, which says the US Defence Secretary in consultation with the Secretary of State and other departments and agencies should submit to Congress, no later than 90 days after the date of the enactment of the Defence Act, an assessment of the extent to which SA’s foreign policy threatens US national security interests.
‘Direct or indirect support’ of Russian invasion
The report should include assessments of SA’s strategic military and economic engagement with Russia and China including “to support, directly and indirectly, the Russian Federation in its war in Ukraine”.
Risch adds that the report should also assess actions taken by SA to evade or enforce US sanctions against individuals conducting activities and transactions in SA. The report should also assess actions by SA “to build alliances against the national interests of the United States with malign actors such as Iran, Cuba, and Venezuela”.
The report should also assess “the scope and scale of financial and other forms of public corruption to support strategic alliances with malign actors; and the security and stability of the southern Africa region”.
A seasoned Washington insider told Daily Maverick that Risch’s amendments would pass.
“He has the seniority on Senate Foreign Relations to make life miserable for anyone who crosses him, and who in his/her right mind would risk that for the sake of South Africa?”
J Peter Pham, former US special envoy to the Great Lakes and to the Sahel, said: “Senator Risch’s amendments reflect concerns that have been expressed by many members of Congress from both parties, as witnessed by the letter earlier this year co-signed by the Republican chair and ranking Democrat on the House Foreign Affairs Committee as well as Democratic Senator Chris Coons, arguably the upper chamber’s most passionate Africa advocate.
ANC government ‘heard loud and clear’
“If I were South African, I would be less concerned about these two amendments per se, than what they represent at a time when both Pepfar and Agoa are coming up for renewal: a signal that Congress has heard the ANC government loud and clear; it has made its sovereign choice and now it is America’s turn to make its own choice as a sovereign nation about where its vast, but still finite, resources may best be deployed to best effect.”
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Pepfar – the President’s Emergency Plan for Aids Relief – is a 20-year-old programme which has injected more than $100-billion to fight HIV/Aids globally. It is widely credited with helping SA survive the HIV/Aids crisis at a time when then-president Thabo Mbeki was denying its cause.
Pham said he thought SA might retain the Agoa forum because the defence bill including Risch’s amendments might not clear both chambers of Congress and get signed in time.
“And it only expresses a ‘sense of Congress’,” he added, suggesting the Biden administration could decide not to act on it.
SA ‘likely to lose some or all Agoa benefits’
But Pham thought that South Africa was nonetheless likely to lose some or all of its Agoa benefits next year.
“Voting for one-way tariff exemption is tough enough in the current political environment. Doing so in an election year for a country as ungrateful as South Africa is almost political suicide – and for what?” he asked.
Pham said he believed that Agoa, which applies also to other eligible African countries, would be renewed as a whole, though perhaps for a shorter term than a full decade as it had been in 2015.
“South Africa will either be excluded altogether or have its benefits pared back significantly (for example, perhaps raw critical minerals still get through duty-free, but not high-value manufactured goods; or perhaps strict reciprocity, South Africa only gets duty-free access where it gives the same to American goods).”
Western Cape plea
On Monday this week, Western Cape Premier Alan Winde pleaded for South Africa to continue receiving Agoa benefits.
Participating in a virtual hearing conducted by the US Trade Representative to assess the eligibility of African countries to receive Agoa benefits in next year’s Agoa annual review, Winde said: “The Western Cape province desperately needs Agoa to support its floundering economy, help showcase the merits of an open market economy approach and overcome its deep socioeconomic challenges of unemployment and poverty.
“With an unemployment rate of 25.2%, one of the highest Gini coefficients in the world, and with 48.7% of its population living in poverty and surviving with less than $86.56 per month, the Western Cape desperately needs Agoa – to improve economic growth in order to create jobs and lift our citizens out of poverty.”
Winde noted that the US was a key partner for the Western Cape and had been the biggest investor in the province over the past 20 years.
And because of Agoa, it has become one of the top five export markets for Western Cape goods.
“The US has also been one of the Western Cape’s top three overseas tourism source markets.”
Winde said the Western Cape exported more than half of South Africa’s global agricultural exports.
“Almost 70% of the Western Cape’s top exports to the US were Agoa-eligible in 2022, with agricultural products and food and beverages ranking among the major beneficiaries.
“Because these products carry higher tariffs and are more labour intensive, the Western Cape would be especially severely impacted should South Africa lose Agoa benefits, with thousands of workers losing their jobs.”
He added that Agoa’s benefits to the Western Cape also provided businesses in the US with competitive, quality inputs and products.
“Strong and established value and supply chains link Western Cape exports to business opportunities and jobs in the US, ensuring that American citizens and businesses can access cost-effective goods that help tame US inflation.”
He said US companies invested in the Western Cape benefited directly from Agoa. They were also perfectly situated to leverage opportunities created by the African Continental Free Trade Agreement, which is just coming into operation, potentially giving a huge boost to trade across Africa. DM