South African agricultural and trade experts are calling for stronger bilateral trade agreements with the United States, as fears grow over the country potentially losing its African Growth and Opportunity Act (Agoa) benefits.
This warning follows rising political tensions between South Africa and the Trump administration, culminating in the expulsion of South Africa’s Ambassador to the US, Ebrahim Rasool.
With Agoa providing duty-free access to the US market for thousands of South African products, its potential loss could disrupt key industries and put hundreds of thousands of jobs at risk.
Why Agoa Matters to South Africa
Agoa is crucial for South Africa’s agriculture, manufacturing, and mining sectors. Industries such as citrus, nuts, wine, automobiles, iron and steel, chemicals, and fertilizers have thrived under its preferential trade terms.
Agoa is estimated to have created or sustained around 250,000 jobs in South Africa.
Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber of SA, warns that while South African exports to the US account for only 4% of total agricultural trade, certain industries—particularly citrus, nuts, and wine—are heavily dependent on Agoa’s favorable trade conditions.
If South Africa loses Agoa benefits, these industries could face a 3% tariff hike, reducing their competitiveness in the US market.
What’s Driving the Risk?
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Political Tensions with the Trump Administration
- Rasool’s expulsion signals a breakdown in diplomatic relations, with US Republican elites questioning South Africa’s commitment to strong US ties.
- Some officials believe the South African government has not prioritized repairing relations with Washington.
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South Africa’s Global Trade Shift
- Sihlobo suggests that South Africa’s growing ties with BRICS nations may have led to a de-prioritization of US trade relations.
- While BRICS nations account for 8% of South Africa’s agricultural exports, the US remains an important trade partner.
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The Unilateral Nature of Agoa
- Unlike formal trade agreements, Agoa is a unilateral program, meaning the US can withdraw or amend it without negotiation.
- Experts argue that South Africa needs to push for a formal bilateral trade agreement to secure long-term trade access.
What Needs to Happen?
With Agoa up for renewal later this year, experts are urging South African lawmakers to proactively engage with the US to secure better trade terms.
Sihlobo emphasizes the need to:
- Pursue a formal bilateral trade agreement with the US to replace the unilateral Agoa structure.
- Diversify export markets beyond the US to reduce risk.
- Strengthen diplomatic relations to prevent further trade disruptions.
“We need to hedge against geopolitical unpredictability by expanding our trade reach while also ensuring we maintain strong US ties,” Sihlobo said.
South Africa’s access to the US market under Agoa is under threat, and losing it could have serious economic consequences. While the country continues to explore alternative trade partnerships through BRICS and intra-African trade, securing stable and predictable US trade terms remains essential.
As tensions with the Trump administration escalate, experts are urging South African lawmakers to pivot towards a bilateral trade deal—before it’s too late.
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