South Africa could lose privileged access to US markets – Foreign Policy Analyst Peter Fabricius

Pressure from the West is growing on the South African government because of its close relationship with Russia. President Cyril Ramaphosa is said to be sending an envoy to the US to discuss its relationship with Russia. Foreign Policy Analyst Peter Fabricius told BizNews that the South African government is concerned about losing the benefits of its inclusion in the African Growth and Opportunity Act (AGOA). AGOA allows Sub-Saharan countries to export products to the United States without tariffs. South Africa contributes the majority of AGOA exports at 56%. Fabricius says South Africa and the Russian leader are likely to wriggle out of the sticky situation of being forced to arrest Putin if he sets foot on South African soil for the BRICS summit. The International Criminal Court has issued an arrest warrant for the Russian President for war crimes in Ukraine. – Linda van Tilburg

Some extracts from the interview:

SA envoy to US amid concerns it could lose AGOA benefits

They haven’t been explicit about that yet. I don’t think they’ve even confirmed that trip, but what it probably amounts to more than anything else is the concerns that we could lose our AGOA benefits, The AGOA, the Africa Growth and Opportunity Act, as most people know, is a piece of legislation that has been around since the year 2000, which gives qualified African countries, privileged access to the US market, which has been quite helpful for South Africa. Last year it increased its exports to the US from $2 to 3 billion and there are rumblings in the US Congress about South Africa benefiting from what is a unilateral measure – non-reciprocal privileged access to the US market and yet still opposing US positions on Ukraine and so on. So, that’s complicated relations, and South Africa is, I think, getting concerned that that might be something it could lose.

AGOA has promoted the export of value-added goods to the US

I’m not sure of the stats of what percentage South Africa represents. I know if you included oil, Nigeria was up there as well. One of the things about it has been that it has promoted manufactured goods to some degree, or at least value-added goods.

So, if you look at the relationship – the trade relationship that South Africa has with the US – it has a greater proportion of value-added, manufactured exports in it, than for example South Africa’s trade with China, which is bigger in total volume. Last year, we had a trade surplus with the US of nearly $10 billion which is quite a chunk actually, if you convert that to Rand particularly. Automobiles have been quite a big part of it. South Africa doesn’t produce its own autos, but it assembles German cars, for example – BMWs, Mercedes Benz, and so on, and exports them. Those create jobs, and they create foreign exchange. So, it’s been useful.

Read more: RW Johnson: The coming crunch over South Africa-Russia relations

Pressure to change favoured US trade relations with SA into a reciprocal deal

There’s been some debate about a split from the US side, obviously, not the African side, on whether or not we need a normal reciprocal trade deal. What the Americans are doing, is that they look at South Africa’s case – we have an economic partnership agreement with the EU, for South Africa and some of its neighbours, and that’s reciprocal. So, the EU also gets privileged access to the Southern African market. What the Americans are saying, is that they don’t mind so much giving African countries or South Africa in particular access to their market with no tariffs, no quotas, et cetera but they object to competing with the EU on unfavourable terms in the Southern African market. So, there’s this pressure to equalise. It’s not only therefore in South Africa’s case that they are irritated with our position on Russia, but that aggravates things. It’s just the sort of feeling that South Africa is a special country because it’s got this manufacturing capacity. No other African country has that kind of trade pattern with the US with quite a heavy weighting of manufactured goods and value-added goods.

Read more: FirstRand CEO slams South Africa’s ‘foolhardy’ ties with Russia

Growing US Congress sentiment to review relations with South Africa

You may have seen that a couple of months ago, the House of Representatives, which is now controlled by the Republicans since the elections in December, tabled a resolution which expressed their displeasure about South Africa’s position on Russia. They were talking about the military drills we had with China and Russia and all the things that have been complained about here. The fact that we had those drills and yet we cancelled a drill with the US last year and so on… and with China. They came up with quite a lot of stuff that is still speculative. They said, for example, that there were reports that China operates unofficial police stations in South Africa to monitor its dissidents. That’s never been confirmed, and nobody knows for sure whether it’s true. It’s denied by the South African and Chinese governments.

Anyway, the crunch of that resolution is that it calls upon the US administration to review the relations with South Africa, including the AGOA benefits. The implication is if it doesn’t like what it comes up with, that we should reconsider those relations, including AGOA. Now, look, that resolution hasn’t passed. It may not pass. It was tabled at the time that Lindsey Graham and Chris Coons, the two senators were here, one a Republican, one a Democrat, and they both said that they didn’t think it would pass. But even if it doesn’t pass, and if, for example, it doesn’t get to the Senate, it reflects, as quite a few people have said, the kind of growing sentiment of Congress. So, it’s something South Africa does have to take cognizance of.

Read more: RW Johnson on CR’s myopia; Russian interference in 2024; alternatives to ANC/EFF (IFP anyone?)

US diplomats are worried about the ‘optics’

What I was told is that the Americans might be worried about the optics and I’ll tell you what I mean by that. The BRICS Summit is supposed to happen from the 22nd to 24th of August this year and then in September, at least, there was an AGOA forum summit, it’s probably a ministerial meeting that was due to take place in South Africa, a meeting that alternates between the U.S. and an African country. What has been concerning the US is that if Putin comes here, an indicted ICC wanted fugitive, plus everything that’s been happening in Ukraine and South Africa refusing to condemn Russia and then a few weeks later, you expect all these US senators and congressmen to arrive in this country – a lot of them are just going to cancel. There’s a whole big thing going on about whether or not they want to move it to another country or a different date or whatever. So, it would be, to some degree, the optics that might be a problem more than the substance.

Read more: South Africa rules out ending friendship with Russia

South Africa and Russia likely to wriggle out of Putin arrest

It’s pretty common knowledge that the legal opinion is that it would have to arrest him if he comes. So, the question is what weight would that opinion have in the whole cabinet where there are some pretty hardline members, like the defence minister and so on, who probably wouldn’t be that supportive? Last Wednesday, I think there was supposed to be a cabinet meeting where we were expecting that there might be some announcement about their position on that legal opinion. There are other legal options to try and wriggle out of it, amending our legislation which domesticates the Rome Statute of the ICC, trying to persuade the ICC that things are different now from the way they were when there was this rather infamous case in 2015 when we didn’t arrest the Sudanese president. That got the government is in trouble with its domestic courts as well as the ICC and they don’t want to be condemned by their own courts again. So, what happens with Putin is still very much up in the air, but I suspect that he probably won’t come. There’s some talk they may do online.

It could even be that they have it in Russia because maybe it would be the second-best prize for Putin to be able to welcome all these BRICS leaders. I have a theory, completely untested by reality, that he’s supposed to be at the Russia Africa summit in Petersburg in July. I wondered if he might not just decide to tag on the BRICS at the end of it and then he can be basking in all this attention from Africa, from BRICS, which might not be a bad idea. It might tend to obscure the reality that he just can’t come to South Africa.

Read more: First the Russians now the Chinese … SA a naval destination