Trade Minister Parks Tau confident US will extend South Africa’s Agoa membership

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

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

Some members of Congress threatened to expel South Africa from Agoa because of its alleged friendships with US enemies Russia, China and Iran.

“We received bipartisan support for the reauthorisation of Agoa… We are confident that Agoa will continue to exist and that South Africa will remain in Agoa,” Tau said.

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

Legislation that originally suggested the possible exclusion of South Africa has been withdrawn “and there is currently no Agoa resolution or proposal suggesting the exclusion of South Africa”.

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

“In every confrontation the sentiment was positive, largely 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 felt like our relationship with Agoa is not going anywhere.”

‘Unaligned position’

Tau said the delegation met with staffers of Republican Congressman John James, who proposed controversial legislation which, if passed, would require the U.S. government to conduct a comprehensive review of U.S.-South African relations, including a determination of whether Pretoria has harmed U.S. national security and foreign policy interests through its close relations with Russia, China, and Iran, and its hostility toward Israel. A finding against South Africa could also jeopardize South Africa’s participation in Agoa.

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

“We have indicated that South Africa has consistently taken a non-aligned position. And many of the parties we have been in discussions with have said that they respect a non-aligned position.

“However, they considered that in certain cases South Africa may not have articulated its non-alignment in a demonstrable manner.

“And it is an issue that we have said we are prepared to engage with and we are prepared to discuss to the extent that there are concerns.”

Tau noted that the US presidential election in November created some uncertainty over whether Agoa as a whole would be extended, as Republican candidate Donald Trump had not yet made his position known.

Read more: Minister Tau makes progress in convincing Washington not to drop SA from Agoa

He said South Africa would proceed on the basis of the support for extension it had heard from the Republican Party, but would seek to engage with presidential candidates from both parties.

He said that while there was general agreement among the officials and lawmakers they met that Agoa should be reauthorized quickly, no one could give them a specific timeline because of the approaching elections.

“There are three possible timelines,” he said.

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

Tau noted that Congress was going into recess this week and would not return until — briefly — September for the elections. Moreover, Agoa’s reauthorization would compete with other legislation. U.S. sources told Daily Maverick that it was highly unlikely that Agoa would be renewed this year.

Tau said the South African delegation had not only lobbied for a faster and longer extension of Agoa to provide greater certainty for investors, but also for better rules of origin and less frequent adequacy reviews to preserve regional value chains and increase Africa’s production capacity.

He said South Africa would continue discussions with the US on supplementing Agoa with the African Continental Free Trade Agreement, which would create a common market for Africa.

He noted that some African countries had been disqualified from Agoa, raising the question of whether goods produced in South Africa, for example, using components from one of those countries, would qualify for duty-free Agoa imports into the US. This was important for value chain integration.

He said the governments of South Africa and the US had agreed to revive the existing trade and investment agreement between the two countries to discuss trade issues, including Agoa.

Read more: Analysts say GNU is giving SA a honeymoon period to maintain its Agoa status

Meanwhile, in Moscow

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

It had also expressed concern about “unilateral measures such as the Carbon Border Adjustment Mechanism” (CBAM). The European Union sees this purely as a climate control measure, but South Africa and others insist it is a trade restriction. It would impose tariffs on some exports to the EU, calculated on the amount of carbon emitted in the production of the exports.

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

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

He said that referring the issue to the WTO would reinstate the WTO as a strategic platform to resolve such issues and “put a limit on what appears to be a blatant move towards unilateralism”. DM