South Africa: Exclusion from AGOA does not mean end of trade with US

Trade experts and economists say South Africa’s exclusion from AGOA, a preferential tariff agreement with the United States, will not spell doom for the country.

The African Growth and Opportunity Act has been important for agricultural products, manufacturing, and the automotive industry.

But they say only about 10 per cent of South Africa’s exports to the US are currently subject to AGOA , representing about 1 per cent of it total global exports.

The country's largest trade union federation, Cosatu, said that between 3,000 and 10,000 agriculture and manufacturing jobs could be on the line.

“It's not a an economic implosion. It's not the end of life as we know it in an economy of seventy million workers,” said representative Matthew Parks.

But he added that the union was concerned about the impact it would have on some of the companies most at risk, which are based in small towns like the citrus-producing areas of the Western Cape province.

“For those communities who will feel the pinch, for those workers who may lose their jobs, for those farmers who will lose contracts, it will be quite painful,” Parks said.

"We are meeting with government to encourage them to go to the US, use the next 60 days to negotiate a possible package deal," he added.

President Cyril Ramaphosa described the exclusion from AGOA as a setback, but said it also opened the door to negotiating a formal bilateral trade agreement with Washington.

Trade and industry minister Parks Tau, meanwhile, said the imminent expulsion from AGOA did not mark the end of trade with the United States.

He added that Pretoria has 60 days to appeal the decision.

But former diplomat and international relations expert, Dr Kingsley Makhubela, this this is a “a waste of time”.

“South Africa should spend time casting the net widely to look at new trading partners and mutually beneficial,” he said.

“It's a political decision that has been made by the Trump administration, it's not a trade decision," he added.

Pretoria had been prepared for removal from AGOA because of its battered diplomatic ties with Washington over various domestic and international policy differences.

The exclusion goes into effect on 1 January 2027.