SA and US move to seal revised trade deal in October

SA and the US are expected to finalise a revised trade deal in October, with only a few outstanding issues related to Agoa still to be resolved, government officials familiar with the discussions said. 

Trade, industry & competition minister Parks Tau delivered the update during Tuesday’s closed-door cabinet lekgotla, where he briefed executive members of the government of national unity on the progress made after high-level trade discussions last week. 

Agoa forms part of the broader trade relations between Pretoria and Washington. The preferential trade agreement gives SA exporters duty-free access to US markets.

Discussions on its renewal are ultimately decided by the US Congress, however SA has pushed for a multiyear extension of the deal. This is despite the 30% tariffs imposed on SA exports to the US by the Trump administration. 

In a statement released on Monday, Tau said there had been outstanding issues related to the period of renewal, the timing of when Agoa will be renewed, and the legislative vehicle for renewal. He added that there was broad bipartisan support for the renewal of the trade agreement in the US.

“On the period of renewal for Agoa, the consensus suggests that Agoa may be renewed for a short period of between one and three years to allow Congress to introduce changes and improvements to the programme. The timing of the renewal of Agoa will depend on the legislative vehicle that Congress chooses to renew Agoa,” Tau said. 

“Some members of Congress cautioned that Agoa may expire on September 30 2025, but efforts will be made to renew Agoa as soon as possible thereafter. Currently, Congress is seized with a Continuing Resolution (CR) Bill to pass funding for government and avoid the shutdown. 

“Should Agoa not be extended by September 30, SA exports will be subjected to the most favoured nation tariff, as well as the unilateral tariffs. SA will continue to lobby for the extension of Agoa. The major SA exports under Agoa include automotives, ferroalloys, citrus, jewellery, nuts, chemicals, wines, engines and turbines, and ships and boats.”

Recent US tariffs have effectively nullified some Agoa benefits, affecting key SA export sectors such as agriculture and motor manufacturing. This has prompted the SA government to seek alternative markets for its exports in a bid to reduce reliance on the US.

“It should be noted that 36% of SA exports are currently exempted from the unilateral tariffs. The list of products exempted from the unilateral tariffs includes copper, pharmaceuticals, semiconductors, lumber articles, certain critical minerals, stainless steel scrap, and energy and energy products,” Tau said. 

The trade relations between the two countries featured high on the agenda of the government’s biannual strategy meeting, where Tau and finance minister Enoch Godongwana delivered presentations on the country’s economic standing. 

“The presidency overall and the department of finance, the National Treasury, and the department of trade, industry & competition have consolidated proposals across various departments and plans that have been previously adopted,” minister in the presidency Khumbudzo Ntshavheni told reporters. 

“You must follow the US Congress on the renewal. [Some] are advocating for renewal. And the discussion is whether it’s a year or a longer period,” Ntshavheni said. 

“We have indicated even in previous years that Agoa, in terms of the economic impact for SA, is 1.3% of our agricultural economy. So we are looking at the work we’re doing to have an agreement with the US on our trade relations, but we support the initiative.”

maekot@businesslive.co.za