Tau insists AGOA does not define broader South Africa-US relationship - IOL

Trade, Industry and Competition Minister Parks Tau says the United States' decision to withdraw South Africa's AGOA benefits does not define the broader relationship between the two countries.

Minister of Trade, Industry and Competition Parks Tau says the United States' decision to move towards excluding South Africa from the African Growth and Opportunity Act (AGOA) does not define the broader relationship between the two countries, but warned that finding a solution will depend on both parties' willingness to engage.

His comments follow US President Donald Trump's notification to Congress of his intention to terminate South Africa's participation in the trade programme from January 1, 2027.

The announcement, made on Monday, represents a major setback for Pretoria's efforts to retain preferential access to the US market amid growing tensions between the two countries.

US Trade Representative Jamieson Greer said the decision followed an annual review of sub-Saharan African countries' eligibility for AGOA.

Greer said Trump had found that South Africa and Rwanda were engaging in practices inconsistent with the programme's eligibility requirements, including barriers to US trade and investment, as well as practices considered threats to US national security and foreign policy interests.

The South African government said it had noted the US decision, which gives the country 60 days' advance notice of its intention to withdraw South Africa's benefits under AGOA, effective from January 1, 2027.

“Government recognises the concern that this decision may create for workers, exporters, businesses and communities linked to AGOA-supported value chains.”

It said the impact would differ across sectors and that it was working closely with affected industries to assess the implications and provide appropriate support on a company-by-company basis.

Government added that South Africa had proactively retained measures introduced in response to the reciprocal tariffs imposed by the US.

“Government will undertake further engagements with social partners to optimise the support measures aimed at improving resilience and sustainability of the productive sectors whilst diversifying exports and protecting jobs.”

It said South Africa had made extensive efforts to respond constructively to US concerns and had tabled additional concessions through the appropriate channels, going beyond those made in 2015.

“These concessions respect due process, safeguard South Africa's biosecurity and constitutional imperatives and its obligations under World Trade Organisation rules. It is, however, unfortunate that the US is now raising new issues that have not been the basis for discussions as part of the negotiations process that commenced in 2025.”

Government said AGOA remained important to South Africa but did not represent the entirety of the country's economic relationship with the US.

“In 2025, approximately 89% of South African exports to the United States entered under ordinary World Trade Organisation most favoured nation terms, while approximately 10% entered under AGOA, down from 28% in 2024.”

It said AGOA exports were valued at approximately US$1.7 billion in 2025, down from US$4 billion in 2024, and accounted for about 1% of South Africa's total global exports.

Bilateral trade between the two countries reached US$28.8 billion in 2025, while more than 600 American companies operate in South Africa, supporting approximately 134,600 jobs.

Government described the trade relationship as complementary and mutually beneficial.

“South Africa supplies 12 of the 50 minerals regarded as critical by the United States, 70% of US isotopes used among others in cancer treatments, sources inputs from the US on goods manufactured for exports to the US under AGOA such as autos and boat building,” it said.

It added that South African companies were also invested in the US economy and warned that the loss of AGOA could undermine these investments and negatively affect existing value chains.

Government said it would continue to accelerate the diversification of South Africa's export markets.

“Through its Cabinet-approved Industrial Development Strategy and Butterfly Strategy, South Africa is pursuing market opportunities across the African Continental Free Trade Area, India, SADC, the European Union, the United Kingdom, ASEAN, MERCOSUR and China. New market opportunities have also been secured for South African citrus, avocados, grapes and apples.”

Meanwhile, Tau said the US remained an important trade and investment partner.

“This decision does not define the broader relationship between South Africa and the United States, however a solution depends on the willingness of both Parties to find solutions.”

He said government would support affected sectors, protect South Africa's national interests and continue pursuing trade, investment and shared economic opportunities with the US.

“South Africa remains committed to a balanced and mutually beneficial partnership with the US that enables preferential trade that supports beneficiation of critical minerals at source and promotes investment.”

Tau added that South Africa would continue to uphold its constitutional responsibilities, transformation objectives and international obligations while pursuing practical solutions to expand trade and investment.

Meanwhile, South African organisations Solidarity and Lex Libertas have blamed President Cyril Ramaphosa and International Relations Minister Ronald Lamola for the US decision to move towards excluding South Africa from AGOA, warning that workers and export industries could bear the consequences of deteriorating diplomatic relations.

Solidarity expressed disappointment at the White House's decision, describing it as a direct consequence of the government's failure to repair its deteriorating relationship with Washington.

The trade union said Ramaphosa and Lamola had repeatedly ignored warnings about the consequences of their foreign policy decisions and public statements, which it argued had further strained relations with one of South Africa's most important trading partners.

Lex Libertas also held the South African government responsible for the AGOA crisis, saying Pretoria knew exclusion from the programme was a possibility but had failed to take reasonable steps to prevent it.

The organisation said the government should have addressed US concerns relating to incitement to violence against minorities, property rights and free-market policies.

Instead, it accused the government of prioritising political ideology over the economic interests of South Africans.