Trade Minister Tau confident US will renew SA’s Agoa membership

Trade, Industry and Competition Minister Parks Tau is confident that the US will allow South Africa to continue participating in the African Growth and Opportunity Act (Agoa) and that the US will reauthorise this preferential trade measure as a whole before it expires next year.

Tau was addressing a press conference in Cape Town after his return from the 2024 Agoa Forum in Washington. When he was in the US capital he urged members of the Biden administration and of Congress not to remove South Africa from the programme, which gives eligible sub-Saharan African countries duty-free access to the US market for most exports.

Some members of Congress had threatened to kick SA out of Agoa because of its perceived friendships with the US’s enemies, Russia, China and Iran.

“We received bipartisan support for the reauthorisation of Agoa… We’re confident that Agoa would continue and that South Africa would stay in Agoa,” said Tau. 

He said his delegation, which included Deputy Minister Andrew Whitfield, had met a wide range of officials as well as members of Congress from both parties and business leaders.

Legislation which had originally suggested South Africa’s possible exclusion had been withdrawn “and there’s no Agoa resolution at this stage or proposal that suggests the exclusion of South Africa”.

Tau is from the ANC. Whitfield, of the Democratic Alliance, also expressed confidence that SA would remain in Agoa.

“In every single engagement, the sentiment was positive, to a large extent because of the extraordinary turnaround in our ability to form a Government of National Unity in South Africa … so quickly.

“We had a net positive visit. We had a feeling very much that our relationship with Agoa is not going anywhere.”

‘Unaligned position’

Tau said the delegation met staffers of Republican Congress Representative John James who had proposed controversial legislation which would, if adopted, require the US administration to undertake a comprehensive review of US-SA relations, including establishing whether Pretoria has harmed US national security and foreign policy interests through its close relations with Russia, China and Iran, and its hostility to Israel. A finding against SA could also jeopardise SA’s participation in Agoa.

Tau noted that the legislation had passed the House of Representatives but had not yet passed the Senate or been signed by President Joe Biden. SA would continue to lobby the US to try to prevent that from happening. However, if the legislation were passed, “as South Africans, we should be comfortable that we can respond to any questions that are being raised.

“We indicated that South Africa has consistently maintained an unaligned position. And many of the parties that we engaged with said they respect an unaligned position.

“They, however, perceived that South Africa might not in certain instances have articulated its non-alignment in a manner that is demonstrable.

“And it’s a matter that we’ve said we’re prepared to engage with and we’re prepared to discuss to the extent that there might be concerns.”

Tau noted that the US presidential election in November introduced some uncertainty about whether Agoa as a whole would be renewed as the Republican candidate, Donald Trump, had not stated his position.

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

He said SA was proceeding on the basis of the support for renewal which it had heard from the Republican Party but would try to engage with the presidential candidates from both parties.  

He said that although there was general agreement among the officials and legislators they met that Agoa should be speedily reauthorised, none could give them a certain timeline because of the upcoming elections.

“There are three possible timelines,” he said.

The ideal, for which the delegation pressed hard, would be to reauthorise Agoa before the elections. Second prize would be to reauthorise it in the “lame-duck period” between the elections and the inauguration of the new government in January. The least ideal would be to reauthorise Agoa after the inauguration. 

Tau noted that Congress would be going into recess this week and returning only  — briefly — in September before the elections. In addition, Agoa reauthorisation would be competing with other legislation. US sources told Daily Maverick it was highly unlikely that Agoa would be renewed this year. 

Tau said the SA delegation had lobbied not only for an early and longer extension of Agoa to provide greater certainty to investors, but also for improved rules of origin and less frequent eligibility reviews to preserve regional value chains and enhance Africa’s manufacturing capability.

He said SA would continue engaging with the US about complementing Agoa with the African Continental Free Trade Agreement, which is creating a single market for Africa.

He noted that some African countries had been disqualified from Agoa, which raised the question of whether goods which might be produced in say, SA, using components from one of those countries, would qualify for duty-free Agoa entry into the US.  This was important for value-chain integration.

He said that the SA and US governments had agreed to revive the existing trade and investment framework agreement between the two countries to discuss trade issues including Agoa.

Read more: GNU gives SA a honeymoon period for keeping its Agoa status, say analysts

Meanwhile, in Moscow

Tau noted that the other deputy minister of trade, investment and competition, Zuko Godlimpi, last week represented SA at the “pivotal” BRICS-Plus trade ministers’ meeting in Moscow, which had called for “a predictable, fair and equitable” trade environment consistent with the rules of the World Trade Organization (WTO).

It had also expressed concern about “unilateral measures such as the carbon border adjustment mechanism” (CBAM). The European Union regards this purely as a climate control measure, but SA and others insist it is a trade restriction. It would impose levies on some exports to the EU calculated on the amounts of carbon emitted in producing the exports. 

Tau said the BRICS-Plus meeting had called for international rules and standards to address e-commerce and had agreed to share best practices in creating special economic zones to drive economic growth and investment. 

Godlimpi told the press conference that SA had already begun pushing back against the EU over the CBAM but wanted to present a united position of all the BRICS-Plus countries: Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates.

He said bringing the issue to the WTO would re-engage the WTO as a strategic platform to resolve such issues, and “constrain what appears to be an unmitigated move towards unilateralism”. DM