🔒 South Africa said to prefer bilateral US trade deal over AGOA

Key topics:

SA plans to propose a bilateral trade deal with the US.
Trade ties could be affected as AGOA is set to expire in September.
South Africa faces job risks if US trade preferences are revoked.

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By Prinesha Naidoo and Paul Vecchiatto ___STEADY_PAYWALL___

South Africa is preparing to pitch a bilateral trade agreement to the US if President Donald Trump’s administration revokes the nation’s preferential access to the world’s biggest economy as relations between them sour, people with knowledge of the matter said.

Africa’s most-industrialized nation plans to have a team ready to discuss a bilateral pact with the US, said the people, who asked not to be identified as they aren’t authorized to discuss the matter publicly.

The South African government considers such an accord better than preferential treatment because it would be a negotiated deal, and it would prefer to transition away from the African Growth and Opportunity Act, the people said. A spokesperson for the minister of trade, industry and competition declined to comment.

The US is South Africa’s largest trading partner after China and many of the nation’s exports qualify for duty-free access under AGOA. Changes to trade agreements may affect thousands of jobs, particularly in the agricultural and automotive sectors, in a country where almost a third of the workforce is unemployed.

Relations have deteriorated since Trump in a Feb. 7 executive order froze US aid to South Africa after falsely claiming that the nation expropriates land from White Afrikaans farmers, and for South Africa’s case in the International Court of Justice alleging Israel’s assault in the Gaza Strip was an act of genocide. His criticism has stoked fears locally over the fate of trade agreements between the countries.

Thousands of South African goods enter the US duty free under AGOA, and the so-called Generalized System of Preferences, America’s oldest and largest trade-preference program for the world’s poorest economies. South Africa shipped goods worth more than $14 billion to the US in 2022, with about 25% cleared under the two accords, government data show.

While AGOA is set to expire in September, senators introduced a bill last year to extend the trade program that includes more than 30 sub-Saharan African nations until 2041. To qualify, countries mustn’t engage in activities purported to undermine US national security or foreign-policy interests, engage in gross violations of internationally recognized human rights or provide support for acts of terror.

Unlike under AGOA or the GSP, a bilateral agreement would give South Africa a chance to negotiate tariffs with the US on key exports and imports. During Trump’s first term in office, his administration sought to pursue bilateral deals with sub-Saharan African nations, and started negotiations with Kenya for a free-trade accord in 2020.

The US hasn’t negotiated a formal comprehensive bilateral trade agreement with any country for many years and the formal authority under which Congress gives presidents the power to negotiate such deals expired in 2021. But Trump has made striking narrower deals – often requiring increased purchases of US goods – a centerpiece of his tariff and trade policy.

In the past, South Africa’s increasingly close ties with China and its refusal to condemn Moscow’s invasion of Ukraine have also raised concern in the US.

The US House in June passed a key annual defense-policy bill with an amendment calling for a review of South Africa’s national-security risks to the US, but former President Joe Biden signed a final version of the law that didn’t contain the proposal.

The US Trade Representative started public hearings, under Trump’s previous administration, to reevaluate South Africa’s inclusion in the the GSP after a private sector group alleged changes to the nation’s copyright and performers’ protection bills failed protect American copyrights. An outcome of that review has yet to be published.

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