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US senators drop plans to mandate immediate review of SA’s eligibility for Agoa

US senators drop plans to mandate immediate review of SA’s eligibility for Agoa
(Image: iStock | Unsplash)

While a bipartisan Bill to extend the trade preference programme has removed specific reference to South Africa, Pretoria’s foreign policy positions remain a concern in the United States.

US senators from both parties have dropped plans for a legislative requirement that South Africa’s eligibility for the African Growth and Opportunity (Agoa) trade preference programme should immediately be reviewed.

An immediate “out-of-cycle” review for SA would have been mandated in the “Agoa Renewal Act of 2023” which Democratic Party Senator Chris Coons proposed last November, mainly to extend Agoa for a further 16 years when it expires next year.

The bipartisan Bill to extend Agoa until 2041, now also co-sponsored by strong SA critic Senator Jim Risch, the senior Republican on the foreign relations committee, and other influential senators, is about to be tabled, according to congressional sources.

US Senator Chris Coons, a Democrat from Delaware, speaks during a press conference in Bogota, Colombia, 25 August 2021. EPA-EFE/Mauricio Duenas Castaneda

They confirmed a Reuters report that the Bill had now dropped the specific reference to South Africa. But they cautioned that South Africa remained a concern to many senators because of its positions on foreign policy issues like Russia’s war against Ukraine and Israel’s war against Hamas. However, it was unnecessary to single out South Africa as the Bill already allows for out-of-cycle reviews of any eligible country.

Read more in Daily Maverick: South Africa pins its hopes on an early 2024 US Congress renewal of Agoa

The sources also pointed out that in an election year, it was never likely that there would have been time for an out-of-cycle review of SA. 

Instead of focusing on SA, the drafters of the Bill took the approach of fixing Agoa to make it simpler, more predictable and more efficient. Countries would be reviewed for eligibility every other year — instead of annually, under the current statute.

But the US president and certain congressional leaders could review countries’ eligibility out of cycle at any point. Giving those congressional leaders — the chairpersons and senior opposition representatives on the foreign affairs and other relevant committees — the authority to order out-of-cycle reviews would represent a significant expansion of congressional power over Agoa. Congress may currently call for such reviews, but only the president may order them. 

However, if countries were found to be ineligible for the programme, the president would have the discretion to decide on a range of responses, from full termination of benefits to taking no action, according to the Reuters report. The current law obliges the president to terminate a country’s Agoa benefits if it is deemed ineligible.

Read more in Daily Maverick: US is committed to deepening trade ties and investing in the South African economy

Agoa was extended in 2015 for 10 years, but Coons said last year when he proposed the new Bill that a longer extension was needed to give countries and investors more certainty.

“This long-term extension would provide businesses with the predictability needed to invest in sub-Saharan Africa at a time when many firms are looking to diversify their supply chains and reduce dependence on China,” Coons said.

“Increased investment by US businesses in sub-Saharan Africa supports regional economic growth and development and strengthens the United States’ position on the continent.”

The Bill would also increase predictability by dropping the requirement that an eligible country should be immediately graduated from Agoa when it attained high-income status. That has led to Mauritius moving in and out of Agoa as its economy grew or shrank.

The new Bill would only graduate a country if it remained in the high-income category for at least five years.

‘Course-corrective decision’

Agoa has significantly benefited SA exporters in certain sectors such as motor vehicles, fruit and wine. In 2022, SA exported about $3-billion to the US under the programme, which allows duty-free entry into the US for most goods.

Last year, the Biden administration kept SA in Agoa despite criticism of its stances on Russia and Ukraine and Israel and Hamas. Risch rebuked the administration for this decision and said Congress would have to take “course-corrective action”.

To help integrate Agoa with the African Continental Free Trade Agreement (AfCFTA), which is slowly coming on stream, Coons’ original Bill would have modified Agoa’s rules of origin to allow inputs from north African AfCFTA members to count toward the requirement that 35% of a product’s value must originate in the region.

“This change would help Agoa reinforce the AfCFTA’s promise to develop intra-African supply chains,” he said.  However, to participate in the expanded rules of origin, “North African countries would be required to meet Agoa’s eligibility requirements related to governance, human rights and foreign policy.”

It is not clear if this provision remains in the updated Bill. DM

Gallery

Comments - Please in order to comment.

  • Pagani Paganini says:

    Finally sanity has prevailed. South Africa is a sovereign state with a right to set its own foreign policy at it sees fit. If the US senators think our country would support genocide because of a threat of Agoa or Lady R lies, then I suggest they think again.

    • Malcolm McManus says:

      As much as I am not a fan of the US, they also have the right to their own foreign policy. We don’t have to agree with theirs and they don’t have to agree with ours. The problem with both of their foreign policies is they are both hypocritical. Nevertheless, we should try not to annoy them too much. Any trade benefits we can get from them are not a bad thing.

    • Paul Alberts says:

      Sniffing “coke ” never a good idea.

    • Brad John says:

      Funny how your government loves those sweet American dollars when it suits them but cry foul when America wants to cut you off. Hypocrites. Stop taking the money then you can preach from your pedestal.

    • Middle aged Mike says:

      The yanks owe us nothing least of all preferential trade agreements that make our uncompetitive products saleable in their country. AGOA comes with responsibilities and the biggest one is that we don’t act against their interests. We signed up to that but insist on crawling up the exhaust ports of their adversaries so it will be pulled eventually. There are no free lunches and we’ll be made to learn that sooner or later and people will go hungry as a result.

    • Lenka Mojau says:

      100%👍

    • PJ T says:

      South Africa needs the US more than the US needs SA. If you want to play in their ballpark, you play by their rules. Their ballpark is much bigger than ours.

      Every country’s foreign policy is driven by its own needs and is both contradictory and hypocritical. SA supporting Russia invading a sovereign Ukraine is a case in point. Allowing Al Bashir into SA and denying the Dalai Lama a VISA is another.

      Our economy is already such a mess, we can’t afford to lose a spot in AGOA.

  • Coen Gous says:

    At last, some good news. The fact that both Republic and Democrat senators drop these plans is indeed an example to the free world

    • Kanu Sukha says:

      “free world” .. you mean the ‘colonialist’ west ? The colour pigmentation of the US senators proposing this review, tells you everything you need to know about where the real ‘power’ in US politics is (Democrat or Republican) … despite the frantic attempts by Dems to ‘front’ with ‘black’ spokespeople at UN , White house briefings, secretary of defense etc. The Reps don’t even bother with fronting ! White ‘supremacy’ is alive and well … and thriving around the ‘free world’.

      • Malcolm McManus says:

        If you analyze countries around the world, True freedom and democracy are associated quite closely with whiteness. You make a valid point. Thats why citizens of colour probably flock to these countries shores. Not sure why that is. Perhaps you can “enlighten” us.

      • Frank Fettig says:

        Yah, the bad West. The power in SA lies in the hands of the ANC and look how they treat “our people”. Colonialists couldn’t have done a better job! The West, so far, has helped SA in the last decades.
        Your gvmnt, so far, has helped itself only.

  • Robert Pegg says:

    No one can blame the US having doubts about SA’s foreign policy exhibited by the ANC government. The ANC seem to think they owe Russia for the support they received over 30 years ago. The only reason Russia supported the ANC was to promote communism in Africa. If common sense had not prevailed in the negotiations, SA would have become a communist state. Russia would have demanded payback for its support and large international companies would have left the country. SA would have become another Zimbabwe with the resultant economic collapse and mass unemployment.

  • Steve Davidson says:

    Maybe these yanks have finally worked out their own hypocrisy? Their disgraceful support of the Israeli genocide – pushed by their obvious Jewish Zionist lobby – is as bad as the ANC’s disgraceful support of the Russkies’ genocide towards Ukraine – pushed by their commie wing who enjoy going to Moscow for the medical treatment etc they can’t apparently get here.

    • Malcolm McManus says:

      I agree. I am neither pro Yank nor pro Russia, but at least the commie Russians seem capable of world class health care. What I am not sure about is whether this is available to all Russians, or only the select elite few. But they certainly appear to be one up on SA in the medical arena. I wish we had a democratic government which would give me reason to be proudly Pro South African.

      • Skinyela Skinyela says:

        “I wish we had a democratic government which would give me reason to be proudly Pro South African.”

        What makes the government of South Africa less-democratic or non-democratic?

        • Malcolm McManus says:

          The lack of education of the masses. Without education you don’t get educated votes. Just sheep voting for “t” shirts, kentucky and a paid days outing.

          • Skinyela Skinyela says:

            If democracy is “educated votes” then there is no democracy in the whole world, there has never been one in the entire history of humankind and we’ll not have one anytime soon(if ever).

            On the t-shirts and KFC issue, you should wonder why the opposition parties get beaten by such a simple tactic over and over again!

    • John Lewis says:

      Why are anti-Semitic comments like this allowed here?

      • Glad I left says:

        Free speech maybe? Being against extermination of Palestine not the same as being anti-Semitic

      • John P says:

        Why do you feel the comment is anti-semetic?

      • Stephen Paul says:

        I guess because the DM does not consider ” obvious Jewish Zionist lobby” as being antisemitic. Which begs the question I suppose that Mr Davidson is suggesting the tiny percentage in the USA population which is Jewish is incredibly powerful. Which IS an antisemitic trope. As if there is not a large US Christian Zionist support lobbying for the sovereign state of Israel including non-Jewish membership of AIPAC. As if there are not many US and worldwide Muslim Islamic lobby groups obviously lobbying for Palestine and Muslim interests. I don’t know if Mr Davidson would have an issue with these.? Constant referencing of Israel’s war with Hamas as genocide does not make it true as would constant declarations that all muslims are terrorists, or all supporters of the ANC are corrupt, make it true ? No, of course not. Tragic of course, although the outcome that Hamas desired. Nobody is denying that. Perhaps Mr Davidson considers the Allied victory in WW2 as being a genocide against the German people. Words have meaning and if Tik Tok like comments are allowed on DM then it is not surprising they become meaningless.

        • Mordechai Yitzchak says:

          Davidson is a well-know antisemite commentator on these forums. To his credit – at least he doesn’t get offended when he’s called an antisemite (I think he’s quite proud of it). We take his comments from where they come.

          • John P says:

            Always the antisemite accusations, the chip on your shoulder must be getting very heavy by now.

  • Rae Earl says:

    Whoever governs SA after the elections would be well advised to regard the US as a friend and to bypass Russia wherever possible. We export some R55 billion in goods to the US every year, duty free. What do we export to Russia and what benefits do we receive in return? Next to nothing. We can’t even supply them with arms thanks to the ANC’s destruction of Denel, a once solidly profitable industry with customers from around the world. The Western nations are critical to our well being in terms of trade, tourism, and support. Russia and ANC supported terrorist states give us nothing.

    • Geoff Coles says:

      Well put Rae

    • Kealeboga Letsholonyane says:

      SA – Russia trade will increase as per the BRICS plan. When that does happen does it mean SA should then terminate relations with the US? It will benefit SA more if it maintains its neutral stance and the US stop acting like a bully. It looks like they US have started to understand this point. They also need us.

  • knathras says:

    The reality is, the US realized they need us in AGOA as much as we need to be in it. Participation does mean bowing down to US political pressure, especially on foreign policy. AGOA is mutually beneficial, so good on our government for standing its ground.

    • ST ST says:

      I don’t believe it was ever going to come fruition. Bottom line speaks more loudly. T’was the political dance of muscle flexing, smoke mirrors and appearances. Big scary countries like the US, China and Russia budget (money, rhetoric, propaganda) ready to remind everyone who is boss.

      So the US couldn’t be seen to have sat back in the face of an unruly SA. There’s political currency in being seen as having shown ‘leniency’ to SA. Ofcourse for SA there’s currency in having stood up to the US allies. But the bearer may only be the ANC, currency largely valid in BRICS territory.

      Ultimately, post 94 landscape means that US globalisation ambitions depend on keeping/developing business relationships even with countries they don’t like. But it’s not just financial benefits, power and influence matter, especially in the continent some predict to do well in the next 50 years.

      • ST ST says:

        Last paragraph…some sentences cut.
        ..meant that the US invested in SA post 94. And that US desire to grow own economy at home and abroad means more globalisation

  • Kealeboga Letsholonyane says:

    The west is loosing influence on the African continent at an accelerated rated. Therefore, it would have been foolhardy/suicidal for the US to of their volition terminate relation with with such and influencial regional power as South Africa.

    Beside South Afrixa occupies a strategic geographical location which has become even more important for shipping cargo since there is now limited access to the red sea.

    Sanity has prevailed.

    • Kanu Sukha says:

      Among the ‘unintended consequences’ of alienating or crippling ‘other’ economies, especially of those the ‘west’ does not like or define as ‘malign’ … is the growing desperation by the ‘west’ to cope with migration ! Migration from the ‘west’ to colonies during colonialism was never regarded as an ‘issue’ .

      • Malcolm McManus says:

        Yes, because migration to the colonies brought with it skills, jobs, wealth and tax revenue and development for those colonies. Migration to the West brings much crime, violence, potential terrorism, unemployment and a huge tax burden to the West.
        Subtle difference, not so much perhaps.

        • ST ST says:

          At some point this blatant offensive wilful ignorance became intolerable. That point was reached longtime ago. Do better. Pass on some balanced critically examined wisdom to the next generation. With any luck, our children and grandchildren may have a better chance at raising the human race to the next level.

    • Lucifer's Consiglieri says:

      Perhaps the loss of influence will lead to less Africans fleeing their idyllic paragon hoe states and risking their lives to seek opportunities in the evil west then? Perhaps we can expect to hear more about illegal African migration to Russia, Belarus, China, North Vietnam, Venezuela, Cuba, etc.?

      • ST ST says:

        March 2008, former French President Jacques Chirac: “Without Africa, France will slide down into the rank of ‘third world’ power”. 1957, François Mitter “Without Africa, France will have no history in the 21st century.”

        Think about this for a minute. Apply it to all former colonial powers. If you can reflect on the African contribution to the world and the debt thus owed to Africa, perhaps you’ll reconsider your remarks.

        • virginia crawford says:

          Thank you for this: it’s a two way relationship and so far the EU and US have benefited more. Before the usual howls, read some history and ask why an oil rich Nigeria is an environmental and financial disaster, but the foreign investors are sitting pretty.

  • Lu Nqg says:

    AGOA being used as carrot-and-stick for US foreign policy goes against the spirit of free trade. Especially because it is a trade policy, and not some policy to promote human rights or democracy or whatever. It being used in this manner is wrong.

    But regardless, South Africa needs to start shifting focus away from it, and into Africa.
    South Africa finding success in African trade will automatically make it a superpower, as it will now be free from any influence from either China or the US.

    So South Africa, let’s hope we get a government that can stabilise us, so that we aren’t so dependent on the whims of some random senator in Washington.

    • Kanu Sukha says:

      “whims of some random senator” just about sums it up … they (the senators) are probably not aware what Beinart has correctly called ‘American hubris’ !

    • Tandolwethu Mjoli says:

      Amen !!! They forget that they need us as much as we need them , without us they could kiss their plans to counteract Chinese and Russian influence on the continent goodbye. South Africa’s influence on the continent has no equal and the US is starting to remember that.

  • BOB Rernard says:

    We may have dodged a bullet here. Associating with, and defending the enemies of a major trading partner and arguably the rest of the non-muslim free-world is just not smart politics. But hey this is the anc we’re talking about….there’s nothing smart about anything they’ve done over the last 30 years. Had the US paid to keep the lights on at Luthuli House and paid salaries, our comrades would be kissing butts across the atlantic!?!?

  • Dragon Slayer says:

    I am guessing it is less about trade, South Africa’s support of Palestine and relationships with China and Russia and more about geo-politics and maintaining a relatively low-cost presence to defend against Chinese presence and influence.

  • The ANC is just preparing to having to go “hat in hand” to the US again, begging, then declaring a major victory as a review of the trade deal is considered by US. They would not be able to run a corner shop due to absolute inefficiency and lack of that precious commodity called common sense. This is why I am ashamed that SA always has to beg!!!

  • George 007 says:

    If SA were truly “neutral,” as they claim, this would not even be an issue. But they aren’t and it is. Life is full of choices, and in this case, if you want preferential trade status with the US, you need to reflect their values to some extent.

    The question here is if SA breaks relationships with the US, who will be hurt more? Hint. The US will not even notice. Tow the line or pay the price. It’s entirely up to SA, and the US has made very clear what its expectations are.

    • Middle aged Mike says:

      The yanks save money by pulling AGOA as they forego import duties on the uncompetitive products we send them. There’s bugger all economic benefit to them of giving us it’s benefits.

      • Kanu Sukha says:

        George should give up the misguided 007 nickname … because his reasoning reflects his hubris … as much as it does the American one ! The same hubris that ….. Mike displays – imagine when he gets to ‘old age’ ! Senility ? Yikes.

      • Alex Divov says:

        The ANC continues to bite the hand that feeds them, consumed by their misguided sense of self-importance.

  • Bruce MacDonald says:

    The US position is probably aimed more at preventing SA from moving closer to the Russia/China axis than genuine development assistance or affection for the country.

  • Philip Machanick says:

    Ironically the issues that upset some in the US about South African foreign policy are causing big divisions in the US. The far right oppose Ukraine military aid. There’s growing disquiet at Israeli war crimes.

    On Gaza, we’re on the right side of the issue as agreed by the ICJ. But it would be super weird if we lost out on US aid for being on the same side of the Russia-Ukraine war as Trump.

  • Lil Mars says:

    It may be a case of “Keep your friends close and your enemies closer”.

  • Lenka Mojau says:

    Americans are intelligent people, and sneaky. How can they bite the hand that feeds them. They only wanted to start a farrow as a tactic but deep down they know they depend on us big time. Our economy and Technology may be too small but our minerals and farm produce is like Oxygen to them. We are one the friendliest nations in the world posing no thread to anyone. They are steeling our minerals, our IP (Pebble modular reactor) courtesy of the DA, and more. We just look so naive like children to them. However the moment they point their guns at us will be the end of their super power, they know that we are the true Israelites (ancient), of the Bible. Our Gold and Coal is being looted through underhand efforts lower our currency. There will never be a time when our minerals will diminish. It is like when you milk a Cow, without considering the welfare of a Calf. The mother hides the most nutritious milk but gives off toxic milk that breeds lots of deseases. So US take heed we just ordinary nation but one of the most powerful, that any nation cannot go without. Our weapons are peace and LOVE, sounds cracy.

  • Neil Parker says:

    We are in Putin’s pocket. So is Donald Trump. Therefore “Agoa continua” !

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