Agoa uncertainty will continue to be a worry for shippers involved in trade with the US – and advocacy group FairPlay has warned that 2024 will be an anxious year.
“Will 2024 bring news of extended or even better benefits to South Africa from the Agoa trade deal that the United States has set up for African countries? Will South Africa be booted out of its Agoa membership while other African countries remain? Or will the whole deal be cancelled by a re-elected President Trump?”
All three scenarios are possible, says FairPlay, as the terms are being finalised for the renewal of the Africa Growth and Opportunities Act. The legislation expires next year and US politicians from both the Republican and Democratic parties are keen for it to be renewed. The process could be completed in early 2024.
Democratic Senator Chris Coons has published draft legislation that would expand Agoa with a long-term extension until 2041.
The organisation however points to two concerns. The first is that the Coons legislation includes a mandatory review of South Africa’s Agoa membership within 30 days of the renewal being approved.
The second is a move in the US Congress to review not just South Africa’s Agoa membership but the entire diplomatic (and presumably also trade) connections between the two countries.
Politicians from both US parties have submitted draft legislation to Congress calling for a “comprehensive review of the bilateral relationship between the United States and South Africa”.
The South African government has said confidently that the legislation will not get anywhere. But the sentiment behind the two pieces of legislation is worrying for South Africa.
The advocacy group explains that the US has set strict conditions for Agoa membership, including that the African country “does not engage in activities that undermine United States national security or foreign policy interests”.
And the draft legislation on bilateral relationships says South Africa’s foreign policy actions favour Russia, China, Hamas and Iran “and thereby undermine United States national security and foreign policy interests”.
That’s likely to be the deciding phrase in any review of South Africa’s continued and extensive preferential access to US markets under Agoa.
Last November, before those two hostile pieces of legislation were published, Fitch Solutions, through its research arm BMI, said it was 65% sure not only that Agoa would be renewed, but that South Africa would get even more favourable terms than at present. That’s the optimistic view, says FairPlay.
And then there’s Donald Trump. If he wins re-election in November, Agoa may be history, regardless of what Congress has decided.
It’s going to be a worrying year for Agoa supporters.
