SA pitches revised comprehensive trade and investment proposal to US amid new Starlink strategy

South Africa has submitted a revised trade proposal to the US, focusing on liquified natural gas (LNG) imports, critical minerals and digital trade.

Read more: Trump’s Oval Office drama: Unpacking the misleading claims about South Africa’s ‘white genocide’ 

Speaking at a press conference on Wednesday at the Ritz-Carlton hotel in Washington, DC, after the meeting between President Cyril Ramaphosa and US President Donald Trump, Trade and Industry Minister Parks Tau said he had submitted a wide-ranging trade deal to the US “with regards to a framework agreement, focusing in particular on issues related to trade and investment”.

Agriculture Minister John Steenhuisen and Tau met with US trade representative Ambassador Jamieson Greer on Monday, 19 May.

“That office gave us feedback with regards to what they think, in relation to the proposal, are gaps and the areas that they want us to pursue,” said Tau.

After consultations with the South African Revenue Service and other authorities in SA, Pretoria resubmitted a revised trade proposal on Tuesday, 20 May for consideration, said Tau.

Liquified natural gas 

“It has a number of components. The first focus is, in particular, on trade and investment — areas in which we think there is opportunity to increase trade between ourselves [and the US]. We indicated, given our impending shortage of gas, [an] appetite to procure LNG [liquified natural gas] from the US, which was … in our discussions … positively received, and it’s one of the areas that we will be following up on,” he said.

South Africa faces a looming natural gas shortage, or “gas cliff”, as supply from Mozambique’s Pande-Temane fields is nearing completion. Eskom and Sasol have partners to find new gas sources, but South Africa’s industrial users — particularly those reliant on the gas from Sasol — are facing a potential supply halt, Daily Maverick reported.

Read more: Industry lifeline — Sasol unveils bridging plan to avert South Africa’s looming gas cliff

Critical minerals  

Tau said that of the US’s list of critical minerals, SA supplies the country with 12.

“Nine of those 12, we are the main provider of those critical minerals into the US market, so they are an important partner with regards to critical minerals.”

He added that the message of “enhancing exploration and investment in minerals and mineral beneficiation” in South Africa had been “positively received.

“The detail is subject to our engagements, and the two presidents gave us a directive to ensure that we are able to follow up on these discussions, including on the framework agreement that we’ve put on the table.”

Tariffs  

Tau said SA had added sections on tariffs and digital trade to its package. “These matters are firmly on the agenda. Our respective teams will almost immediately start negotiations,” he said.

The US has paused higher so-called reciprocal tariffs until July, but a base levy of 10% remains in place against a long list of countries, including South Africa. SA is hoping to avoid a return to US import tariffs of 31%.

African Growth and Opportunity Act  

Tau said the proposal also dealt with issues related to the African Growth and Opportunity Act (Agoa). South African officials have conceded that the country’s Agoa privileges are very likely to end soon.

“The feedback we received in our engagements on Monday with regards to Agoa is that this is a matter which is currently in Congress, so it would be important for us to follow up in Congress with regards to the reauthorisation of Agoa,” he said.

Read more: US tariff uncertainty casts a shadow over South Africa’s citrus lifeline

Tau said that at the recent African Continental Free Trade Area (AfCFTA) council of ministers meeting in April, the leaders had “agreed to develop a collective approach with regards to Agoa.

“The US has indicated that they would be convening a US-Africa forum, at which we intend to present in detail our proposal on Agoa.”

The director of the African Centre for the Study of the US at Wits University, Dr Bob Wekesa, said he believed that this package resonated with Trump’s economic priorities, to a certain extent.

“The digital trade is a possibility. Tariffs can be negotiated. The one thing I’m not certain about is Agoa,” he said. “South Africa cannot negotiate with the US on Agoa alone, because Agoa is continental, and the America First policy seems to be [incompatible with] Agoa,” he said.

Read more: SA’s best shot for salvaging US relations is ‘a reciprocal trade deal replacing Agoa’

Wekesa added that the Agoa programme was due for renewal in September. “It is very likely that if Agoa survives, it will come with quite a complete set of regulations, rules and so forth that seem to fit with the America First policy,” he adds.

When the cat is away 

While all this is playing out, the minister of communications and digital technologies, Solly Malatsi, has been manipulating the regulatory system to favour Elon Musk’s properties (read: Starlink) on the domestic front.

He directed the Independent Communications Authority of South Africa (Icasa) to undertake an inquiry into SA’s Individual Electronic Communications Network Services (I-ECNS) licences. The directive was gazetted on 21 May as Ramaphosa was entering the White House.

While framed as regulatory reforms, this appears to be a coordinated strategy to address the licensing obstacles that have prevented Musk’s satellite internet service from operating in South Africa.

Sky internet, it’s complicated

For years, Starlink has been locked out of the South African market, with regulatory requirements around Black Economic Empowerment (BEE) and local ownership emerging as the primary stumbling blocks. The satellite internet service, which has slowly been rolling out in other African countries, has been unable to navigate South Africa's complex licensing framework.

AfriForum has been particularly vocal about this issue, arguing that “strict race-criteria employed by Icasa are the key obstacle to Starlink entering South Africa” and that blocking the service on “racial grounds” deprives rural communities of reliable internet access while limiting consumer choice.

Musk meltdown

The controversy reached a new level of intensity when Musk weighed in during a Bloomberg interview, delivering a scathing critique of South Africa’s regulatory approach (and seemingly using up his venom for the country, judging by his silence in the Oval Office meeting).

When asked about reports that the South African government was “working around their rules on black ownership” in relation to Starlink, Musk didn’t hold back.

“First of all, you should be questioning, why is that? Why the racist laws in South Africa? That’s the first problem. That’s what you should be attacking. It’s improper for there to be racist laws in South Africa,” said Musk.

“The whole idea with what Nelson Mandela — who was a great man — proposed, was that all races should be on an equal footing in South Africa. Not to replace one set of racist laws with another set of racist laws, which is utterly wrong and improper.”

Musk went further, claiming he found himself in an “absurd situation where I was born in South Africa but can’t get a licence to operate in Starlink because I’m not black”.

Daily Maverick reached out to Kagiso Khaole, SpaceX’s continental growth lead for Starlink commercial business, but he had not responded by the time of publication.

Read more: Minister Malatsi’s bid to get Starlink deal into orbit is weighed down by opposition

Stealing base

Malatsi’s policy directive appears designed to create alternative pathways for market entry.

Currently, Icasa cannot accept applications for new I-ECNS licences without ministerial direction under section 5(6) of the Electronic Communications Act — a requirement that has been described as “overtaken by market developments”.

By directing Icasa to investigate “the demand for and need to invite, accept and consider applications for new individual electronic communications network services licences”, Malatsi may be creating a regulatory backdoor that allows companies like Starlink to bypass the more restrictive satellite-specific licensing requirements.

A spokesperson for the minister told Daily Maverick that a statement answering questions about the rationale behind this policy directive would be issued soon. DM