(Nov 3): The US announced plans to revoke South Africa and Rwanda’s access to a duty-free trade pact, intensifying pressure on two African nations whose relations with Washington have become increasingly fraught.
The two countries will no longer qualify for benefits under the African Growth and Opportunity Act after US President Donald Trump found their governments “are engaging in practices that are inconsistent with AGOA’s eligibility criteria”, US Trade Representative Ambassador Jamieson Greer said in a statement on Monday.
“These concerning and pervasive practices include, but are not limited to, barriers that undermine American trade and investment that pose a threat to US national security,” Greer said.
South Africa’s government has been bracing for bad news on its continued eligibility as ties between Washington and Pretoria have deteriorated since Trump returned to the White House last year. Relations between Rwanda and the US have been strained by Kigali’s involvement in the conflict in the neighbouring Democratic Republic of Congo.
AGOA grants tariff-free access to the world’s largest economy for more than 1,800 products and has helped to boost trade between the US and the region since its inception in 2000. South Africa — the largest beneficiary of AGOA — exported US$1.63 billion (RM6.64 billion) of goods to America last year under the pact, while Rwanda shipped US$1.48 million, according to US International Trade Commission data.
“Government is working closely with affected industries to assess the implications and will continue to provide appropriate support on a company-to-company basis,” South Africa’s trade minister, Parks Tau, said in a statement. “AGOA remains important to South Africa, but it does not constitute the totality of the economic relationship between South Africa and the United States.”
After returning to power, Trump quickly froze US assistance to South Africa, falsely claiming the government is allowing a genocide of White Afrikaner farmers. Trump has also criticised the country’s Black economic-empowerment laws, which were introduced to address inequalities created by apartheid.
America ranks as South Africa’s third-biggest trading partner, after China and the European Union. Bilateral trade between South Africa and the US last year was US$24.1 billion — less than half the US$55.6 billion of commerce with China, according to data compiled by Bloomberg.
Pretoria has been trying to agree to a broader trade deal with Washington after Trump unveiled harsh tariffs that penalise its automobile sector, potentially putting jobs at risk in a country with one of the highest levels of unemployment in the world.
South Africa’s main exports to the US under AGOA include agricultural products, including citrus fruits and auto parts.
“This will be a loss not just for us, but the US consumer will lose too,” the Citrus Growers’ Association of Southern Africa said in a statement following the news. “Seasonal fresh produce does not threaten US jobs. It helps keep America healthy and also helps contain food inflation,” said CGA CEO Boitshoko Ntshabele.
The Trump administration’s concerns about Rwanda include barriers to trade and investment, the rule of law and political pluralism, according to the statement. In South Africa, it said, the administration is deeply concerned about barriers to US trade and investment, corruption and threats to US national security and foreign-policy interests.
“It’s yet another trade decision grounded in grievance that flies in the face of what responsible policy should be,” Representative Richard Neal of Massachusetts, the ranking Democrat on the US House Ways and Means Committee, said in a statement. “The power of our trade laws shouldn’t be twisted so Trump can further policies based on biased accusations made by those in his orbit looking to settle scores.”
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