Fractures have appeared in the foreign relations between South Africa and the United States following a series of events. These events included accusations from the US ambassador to South Africa that a Russian cargo ship, Lady R, was loaded with supplies for use against Ukraine, and a call between Minister of International Relations and Cooperation, Naledi Pandor, and the Hamas leader Ismail Haniyeh. But after a fairly friendly 20th AGOA Forum over the past week in Johannesburg, relations seem to be on the mend. In an interview with BizNews, Dr Piet Croukamp, political analyst and a senior lecturer at North-West University, said that it would be optimistic to think that South Africa is out of the danger zone because the country’s “foreign policy is so unstable.” However, the idea that South Africa will be removed from the AGOA agreement appears to have dissipated. It appeared, he said, that the Americans were buying the idea that the agreement must be stretched over a longer period than five years, but he had doubts that a new agreement would materialise before 2025. He said that unless the South Africans did something “really stupid” and it is not impossible with Naledi Pandor at DIRCO, he could not see South Africa being removed from AGOA any time soon. The Americans will however not tolerate support for Hamas, he said. Dr Croukamp also warned that South Africa will have to do something about its infrastructure, electricity and roads as it would not be able to compete with American producers and service providers. – Linda van Tilburg
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Relevant timestamps from the interview
- 00:08 – Introductions
- 00:52 – Dr. Piet Croukamp on his assessment of SA’s place in the AGOA pact
- 03:16 – The Biden administration
- 04:29 – On USA trying to counter the influence of China on Africa
- 07:31 – Timeline of early 2020 for renewal – Is that realistic?
- 08:46 – What if Trump becomes president again
- 09:30 – Relations between SA/USA at the conference
- 11:56 – Conclusions
Excerpts from the Interview
South Africa appears to have moderated its foreign policy, US feels it has some influence
You’ll be optimistic if you think South Africa is out of the danger zone because our foreign policy regime is so unstable. There seems to be no coherence. In other words, we are not impartial. We’re not pro-West. We certainly have, I think, in the recent past month, realigned our relationship with Russia. We have re-evaluated our views on what’s happening in Ukraine but I think that has been moderated.
South Africa has recalled all the staff from our South African embassy in Israel. So, it is possible that we could end up in some controversial middle land again, a no man’s land in the next few weeks or next few months, but it seems like the Americans have more or less settled. When I listened to Katherine Tai when she was here, there was no doubt in her mind that South Africa is part and parcel of this African free trade agreement that is being considered by the Americans.
There was no talk about South Africa being marginalised or removed. I think the whole debate has subsided, the anger is out of the debate on AGOA. I think it is because geopolitics is always more important than trade politics. If you remove South Africa from this free trade agreement that we have with America’s AGOA agreement, I think politically there’s just too much that the Americans have to give up.
We will literally hand South Africa’s policy on the plate to the Chinese and the Russians and all sorts of other opportunistic interests. For now, I think the Americans feel they have some influence, they have managed to convince the South Africans to moderate their policy as far as Russia and Ukraine are concerned. So, I think they think they have some influence and there are lots of discussions. Minister Ebrahim Patel has been visiting America quite regularly lately. He’s spoken to several people in Congress, in the White House and in the American trade region. I think there is some sort of agreement that you can build something constructive, regardless of South Africa’s foreign policy, which can sometimes be ambiguous.
Biden administration keen on SA, unlikely that US Congress will turn against SA
Joe Biden has a long history with the liberation movement. He was pro-ANC for as long as I can remember. When I was a young man, he was pro-ANC. His affinity for liberation politics has not subsided. I think that is partially what’s keeping this relationship up. So, he is fighting and the US Secretary of State, Anthony Blinken is also giving South Africa the benefit of the doubt.
There are some individuals within the Congress, for instance, who are a little bit more insecure as far as South Africa is concerned, and who are probably proactive in campaigning for a review of South Africa’s position. But I also think that to argue that eventually Congress will turn against South Africa, I think it is very, very unlikely. Biden does need Congress to support him in this but I think South Africa is not that much of an issue in American politics. I think they may get the majority to continue with the AGOA agreement.
Geopolitics precede trade politics, trade politics come about as a consequence of geopolitics. The Americans will always pursue stability in geopolitics and then seek to consolidate that relationship with preferential trade agreements. It’s much more important to them. In Southern Africa, especially, but in Africa in general, they have the type of foothold which they think serves their interests.
I’m not 100% sure why the Americans and Chinese make such a fuss about Africa in general, except that we export raw commodities to them. We don’t have a middle class, we don’t have purchasing power. There’s not a lot that they can export to South Africa. There’s not a lot that they can import from South Africa except for raw materials but they have the type of foothold which they think can serve their interests in some other way.
If we don’t fix infrastructure, we could lose some of AGOA benefits
The relationship between South Africa and America is a little bit more complicated in the sense that the Americans actually do invest in supply chains and value chains in South Africa. The motor manufacturing and motor assembly plants in South Africa are a significant part of the trade between South Africa and America and it is important. If it wasn’t for those agreements and, of course, the tax rebates that the South African taxpayer gives to these motor manufacturing and assembly plants, then it wouldn’t have existed.
That part of the trade is of incredible importance for both parties, South Africa and the Americans. So, South Africa is one of the 30-34 countries that still belong to the AGOA agreement. South Africa is the only one with supply chains and value chains that can benefit from trade relationships in America. The other countries don’t have that. They are exporting raw commodities or they get a benefit in some small way in precious metals, etc. There’s nothing particularly strong that you get out of any of these other 30 countries. South Africa is the only one with a supply chain and a value chain connection to the American economy and of course, we also export a lot of citrus, fruit, and agricultural products to America.
But what must be remembered is that once we enter the European market or once we enter the American market, we still have to compete with American goods and services that are produced in America and that are imported from other countries and other continents in the world. So, we just get the benefit that we don’t pay additional taxes, but we still have to compete on that side. If we want to embed this trade relationship, we will have to do something about our infrastructure, electricity, roads, and logistics system. Otherwise, we will lose some of these benefits because we cannot compete.
AGOA renewal, early 2024 not realistic
“I’m not 100% sure about the timeline that the South African government is aiming for early 2024. It would be very difficult. It must be remembered that the Americans seek to pursue an African Trade Agreement, and that will take a lot more discussions. It’s a complex network of relationships that have to be established, and it will be industrially related and service-sector related. So, I’m not sure that it can be done next year. I think it’s more likely that it will happen by 2025. We will have concluded much of that and it will be extended.
The Americans seem to buy into the idea that this agreement must stretch over a longer period. They talk about 10 years because if you want real investment in South Africa’s supply lines and value chains, you will need time to benefit those who risk capital and resources in your value chains and your supply chains. Five years is just too short. While 20 years is actually a real advantage of such an investment, I think there’s agreement amongst Americans that 10 years is something that they will pursue in 2025.
What if Donald Trump becomes President again?
Well, Trump was president and he didn’t touch this at all. So, I think many of the people who think that the Republicans will remove South Africa or Trump will remove South Africa have to remember that Trump’s policies on Russia are much more controversial than those of South Africa. Trump’s ideas on what is happening in the Middle East and Israel are much more controversial than in South Africa. I think they can hardly remove us or South Africa from AGOA because of our ambiguous policies and foreign policies. By the way, Trump was President and he didn’t remove South Africa.
SA removal from AGOA is not on the table any more… “unless we do something really stupid”
The devil is always in the details. So, when they sit on the stage and they talk, they say all these nice things to each other. You don’t know what happens behind the scenes. But I did get the sense when you listen to Tai and you listen to Ramaphosa, especially if you listen to Ebrahim Patel, and I think he’s right at the heart of the matter and some of the business people had been at the heart of discussions. I think there was never a discussion that South Africa would be removed. That was not on the table at all. Ukraine was not on the table at all. The Middle East was not on the table at all. What they talked about was the African trade agreement and the likelihood and the time period. They talked about the technical details. Katherine Tai said that they worked from the basis that we would renew it and that we would expand it, that they will develop it and they will think about it in broader African terms. I think that was the honesty of the discussion, the integrity of the discussion that happened at Nasrec. I think that the idea that South Africa can be removed from AGOA has dissipated. I don’t think it is on the table anymore. Unless we do something really stupid, which is not impossible with Naledi Pandor at DIRCO, but unless we do something really stupid, I can’t see that we’ll be removed any time soon.
Minister Naledi Pandor was walking a very, very thin line
If they find that we actually export arms to Russia or we export arms to Hamas, for instance, or we show direct support for Hamas… just remember in terms of American law, Hamas is a terrorist organisation; we are not allowed to trade with them, to export arms to them, to support them in any way unless we do that. The Americans don’t mind if we support the Palestinian cause. There’s a lot of integrity in supporting the Palestinian state because Americans are also in favour of a two-state solution. But the Americans will not tolerate support for Hamas, and I think they wouldn’t support you if you have an affinity or a relationship with Hamas. Naledi Pandor, when she had discussions with Hamas, she was walking a very, very thin line. But still, I don’t think that will lead to us being kicked out of AGOA but I think she really offended the Americans when she started to talk to Hamas, because that’s one of the issues that the Americans feel strongly about. If you entertain the views of what they perceive to be terrorist organisations, your foreign policy is contrary to their interests.
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