SA is expected to respond to a revised trade proposal from the US within the next two weeks though it is still unclear whether the offer includes an extension of the country’s access to the African Growth & Opportunity Act (Agoa), the duty-free programme.
The current access ends on Tuesday.
Business Day understands that because of the 30% tariffs imposed on SA exports to the US, any possible renewal of Agoa is likely to differ from previous iterations since it was introduced in 2000 and renewed in 2015.
The revisions made it easier to become eligible and focused on improving the future business environment in developing African countries.
High-level talks with Washington
This follows a series of high-level engagements between SA and US officials in the past month that culminated in further talks on the sidelines of the UN general assembly last week where SA lobbied for Agoa to be renewed and for a reset of its relations with Washington.
SA is yet to receive formal notice of any Agoa extension or its inclusion in the trade programme, according to department of trade, industry and competition (DTIC) spokesperson Kaamil Alli.
The government, however, remained optimistic that Agoa would be renewed, despite Washington giving no formal indication ahead of the pact’s expiry on Tuesday.
To secure another extension, which was granted for 2025, the legislation will need to win approval in the US Congress, where Republicans hold the majority.
Ramaphosa pushes reciprocity
President Cyril Ramaphosa in his weekly newsletter on Monday said SA had received positive response from the US Chamber of Commerce for the reauthorisation of Agoa. As part of its trade offer to the US, SA has proposed expansion of SA companies operating in the US “thereby creating more jobs for Americans”.
As a country, we will continue to advocate for the principle of reciprocity in investment and trade relations with the US.
— President Cyril Ramaphosa
“As a country, we will continue to advocate for the principle of reciprocity in investment and trade relations with the US,” Ramaphosa said.
“We are also encouraged that the US Chamber of Commerce supports the reauthorisation of the African Growth & Opportunity Act (Agoa), describing it as ‘the cornerstone of US-Africa commerce’. Predictable, preferential access to the US market isn’t just vital to SA’s own exports, but also to US companies that depend on reliable imports. We are also prioritising the African Continental Free Trade Area as a vital tool for strengthening US-SA trade and investment,” Ramaphosa said.
"As the official talks around trade tariffs continue, we take to heart the words of the US Chamber of Commerce representative at the recent dialogue, that expanding commercial partnerships ‘happens one deal, one investment at time’.”
Business voices mounting concern
Business leaders say companies are already feeling the pressure from the uncertainty surrounding the trade pact.
“Those of us in business can’t wait for political breakthroughs. The short-term pain is real. We’ve seen retrenchment announcements as companies freeze production lines when orders halt,” Business Leadership SA CEO Busi Mavuso said on Monday.
“But we must focus on opportunities we can unlock in new markets and through successful structural reforms,” she said.
“Unprecedented trade policy uncertainty is hammering the global economy, with sharply negative consequences for development. The US remains our second-largest trading partner after China. Yet current tariff policies are forcing countries like ours to diversify risk by seeking new markets."
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