After 25 years of Agoa, it’s time for South Africa to chart a new course - BLSA

THE expiry of the African Growth and Opportunity Act at the end of September marks a watershed moment in the US-South Africa relationship. While Agoa had been effectively undermined by the Trump tariffs imposed earlier this year, it nevertheless provided a backstop for our trade relationship - a framework and a reason to work hard towards agreement on new trade terms.

- BUSISIWE MAVUSO

The Trump administration indicated a desire to extend Agoa by one year shortly before its expiry, but Congress has been unable to act on that ambition due to the government shutdown. There remains a possibility that an extension could be included in legislation required to end the shutdown, but even then, it is unclear whether South Africa would be included, given the broader issues that have arisen between our two countries.

Back in April, when new tariffs came into force and the US trade relationship was clearly under threat, I warned that we should expect Agoa to expire. Diplomatic missteps - most notably the Lady R debacle in 2023 - had already damaged relations between our countries even before the Trump administration took office. That loss of goodwill, combined with perceptions about South Africa's stance on Russia, has contributed significantly to the difficult situation we face today. We must be honest about this: foreign policy decisions have direct economic consequences, and ambiguity rarely serves national interests.

For 25 years, from its enactment in May 2000 until its expiry in September 2025, Agoa enabled approximately 17% of South African exports to the US to enter duty-free (some products, particularly raw materials, already enter duty-free under standard trade rules).

Over this quarter-century, Agoa has been critically important for our vehicle manufacturing industry, as well as significant segments of agriculture, apparel, chemicals and equipment sectors.

Crucially, Agoa supported industries with high domestic value-added content, which means they created substantial numbers of quality jobs in South Africa. South Africa accounted for 54% of all Agoa-related exports to the US, making it the scheme’s largest beneficiary over its lifetime.