Rescuing AGOA may be too little too late for South Africa

THE window is very tight and the odds are stacked against a smooth, full restoration of the African Growth and Opportunity Act (Agoa) Agoa benefits for South Africa, says International relations expert Dr Noluthando Phungula.

“Where there is a will, there is a way. As such, it is not necessarily “too late,” but the window is very tight and the odds are stacked against a smooth, full restoration of Agoa benefits for South Africa.

"There will definitely be disruptions but Pretoria is really pushing to save the day. In addition to political will, the 30th is soon and there is a worry about a short window to allow for debate and specifics of the US legislative process,’’ she said.

President Cyril Ramaphosa has made a plea for Agoa to be extended, warning that its expiry threatens to undermine the foundations of US-Africa trade and undo progress made in the past 25 years.

Ramaphosa told the South African-US Trade and Investment Dialogue at the UN General Assembly last week, that in South Africa, Agoa has supported jobs, from auto-assembly plants to high-tech manufacturing hubs. 

Trade, Industry and Competition Minister  Parks Tau continues to negotiate for a trade deal with the US, which includes Agoa, with the current agreement expiring tomorrow and a reduction on steep tariffs. 

Trump imposed a 30% tariff on South African goods in August, citing an imbalance in trade relations, South Africa's "non-reciprocal" policies, and its trade barriers. The move followed a deadline set by the Trump administration for a new trade deal.

The Trump administration specifically criticised South Africa's BEE policy, which requires companies to have at least 30% ownership by historically disadvantaged groups to obtain operating licenses in certain sectors. 

 After Trump announced a potential 30% tariff in April 2025, the US paused implementation for 90 days to allow for bilateral negotiations. Despite South Africa submitting a proposed framework deal in May, negotiations ultimately failed to produce an agreement by the August deadline.

However, Tau at the weekend said that South Africa and the US are edging closer to formal negotiations on a reciprocal trade agreement, following weeks of intensive engagements aimed at resolving long-standing tariff disputes and strengthening bilateral economic ties.

“We measure progress on the basis of the fact that we are now engaged in text,” he said. 

“We’ve had discussions that are beginning to elaborate on what the text means. We’ve agreed to a revised text for consideration, and that’s where we are in terms of what we will be discussing with them.

“I met with the US state representative, and we agreed that on the basis of the discussion that had taken place, the US will send a revised document, which they sent to us in the past week,’’ Tau said.

He said he viewed the response from the US as a step in the right direction — though the negotiations, likely to be held before the end of October, "would not be easy”.

However, economist Dawie Roodt warned that it could be late for the South African government to strike a deal with the US as Trump is still not impressed by what is being offered. 

“I am afraid it is too late. Here we are dealing with Trump and South Africa did not do enough to make him happy,” he said. 

Roodt added that South Africa might be forced to drop its case genocide case against Israel to be able to strike a deal with Trump. 

“You give him something and he also gives you something. Trump has got a lot of issues (with South Africa)," Roodt said.

Global trade expert Thina Nodada, a director at Waymaker Global Trade Solutions, said South Africa has to accept the 30% tariffs and the loss of Agoa. 

"We have to gear ourselves to accepting these tariffs, accepting the loss of Agoa, because Trump seems pretty set in his ways," Nodada said.