Losing Agoa isn’t a catastrophe — a botched response from Pretoria could be

There is a familiar rhythm to South Africa’s public conversation: a serious development becomes a looming catastrophe before we have even established precisely what is changing, who will be affected and what can be done. 

The confirmation that South Africa’s continued participation in the African Growth and Opportunity Act (Agoa) will end deserves urgent attention, obviously.

Exporters needed clarity, and workers whose livelihoods depend on American orders had every reason to be concerned. But the tone surrounding South Africa’s place in Agoa sounded like a “countdown to disaster” and inadequately described the position of a diversified economy with substantial commercial relationships worldwide.

There is a big difference between concentrated sectoral damage and an economy-wide disaster, and this should be articulated clearly.

Exclusion from Agoa alters the terms on which qualifying South African products enter the United States. It would not prohibit trade, cancel every commercial relationship or automatically render every exporter uncompetitive. 

The United States Trade Representative puts American goods imports from South Africa at $16.5-billion in 2025. That figure describes the wider goods relationship. It is not a measure of exports receiving Agoa preferences, still less an estimate of the losses that exclusion would cause. 

What do we know?

South Africa has made its case. The immediate question is how it should respond now that Washington’s decision is confirmed, and what kind of relationship it should seek to build.

The adverse decision warrants disappointment and a frank assessment of its consequences. Government also has an obligation to explain precisely what has changed. Which preferences have been withdrawn? When does the decision take effect? What additional costs will exporters face, and where are jobs most exposed? These answers should have shaped the public conversation before sweeping predictions of economic collapse take hold.

Several practical steps SA should take:

1. Publish a credible assessment of the actual exposure, developed jointly with industry and labour. The value of goods exported to America cannot simply be presented as the value of trade that will disappear. Some exporters may remain competitive; others may face substantial losses. A useful assessment must distinguish between them and identify the communities where intervention is most urgent.

2. Establish a targeted adjustment programme for viable businesses and affected workers. Depending on demonstrated need, this could include temporary working-capital support, assistance with export certification, help finding new buyers and measures to retain scarce skills. Assistance should have clear conditions, time limits and a realistic prospect of preserving production and employment. Government cannot promise to absorb every commercial loss.

3. Make diversification an operational programme. Telling a citrus grower or component manufacturer to “look elsewhere” is easy. Securing regulatory approval, negotiating supply contracts and getting goods to customers at a competitive price takes work. Government should agree sector-specific plans with exporters, assigning responsibility for removing particular barriers and reporting publicly on progress. African markets deserve sustained investment, alongside opportunities elsewhere, without pretending that any destination can immediately replace American demand.

4. Treat domestic reform as part of the response to the external shock. Every avoidable delay at a port, unreliable rail connection or unnecessary regulatory cost weakens an exporter’s ability to adjust. South Africa has limited control over decisions taken in Washington, but it has direct responsibility for the conditions under which its own firms produce and trade. Commitments on logistics, electricity and administrative efficiency should therefore become measurable components of the adjustment plan.

The longer-term task is to develop a framework for US-South Africa relations that can withstand political disagreement. It is difficult under the current resident on Pennsylvania Avenue, whose preferred style of engagement is vulgarity, threats and demands. He also has trouble concentrating and engaging with the boring, laborious aspects of governance. There is also the headache of the expected midterm election bloodbath. Donald Trump is not going to be in a good mood. Still, South Africa must stay the course.

Agoa has been valuable, but South Africa needs greater predictability than an annual eligibility decision can provide. Pretoria should set out its objectives for a more durable commercial relationship: clearer market-access arrangements, workable processes for resolving disputes and sustained cooperation on investment and productive capacity

Narrower cooperation

There is room to begin with narrower, practical cooperation where both countries see value. Potential areas include energy, agricultural trade, advanced manufacturing, digital infrastructure and research.

Each initiative should identify a concrete commercial or developmental objective, the institutions responsible and a way to measure delivery. Announcing another dialogue will achieve little unless it resolves problems or enables investment.

South Africa should continue engaging American companies, universities, investors and other institutions whose interests extend beyond the dispute of the moment. Those relationships have value in their own right and can sustain cooperation through difficult periods between governments.

None of this requires South Africa to pretend that the two countries possess equal economic power. It requires an accurate understanding of South Africa’s own assets, vulnerabilities and choices. 

Monday’s decision is adverse; the government’s credibility will depend on the quality of its response. It should explain the damage honestly, support those most exposed and give businesses a practical account of what happens next. It should also articulate a future relationship with the United States that recognises mutual commercial interests while allowing space for political differences. DM