SA is pushing for the relaxation of eligibility requirements for beneficiaries of the African Growth and Opportunity Act (Agoa), including setting aside nontrade-related requirements as part of eligibility criteria.
Pretoria is also pushing for fewer requirements for graduation from the programme, which allows Sub-Saharan African countries preferential access to US markets, to avoid beneficiaries losing out on the lucrative commercial ties with the US.
Agoa requires that beneficiaries be graduated out of the programme once they reach a certain development level.
Beneficiaries are prohibited from engaging in activities or implementing policies that undermine US national security interests. They are also required to be a market-based economy and allow for political pluralism.
“We urge the US administration to refrain from using nontrade considerations in determining Agoa eligibility criteria and to ensure the developmental dimension of the Agoa programme, particularly in relation to infrastructure, industrial development, and technology transfer,” trade, industry & competition minister Parks Tau said at the opening of the ministerial session at the Agoa Forum in Washington.
“We stress the importance of addressing graduation in order not to jeopardise the achieved gains. A review of Agoa conditionalities should ensure the prioritisation of continued mutual benefits,” he added.
Agoa requires US legislators to conduct eligibility reviews of beneficiaries annually. In 2023, Uganda, Niger, Gabon and the Central African Republic were removed from the programme for various reasons including not upholding human rights.
Full review
SA’s participation in Agoa came under threat in 2014 because it is an upper-middle-income country, while the programme’s support measures are aimed at lower-income countries. As a unilateral trade agreement, it is up to the US to decide on SA’s future inclusion or exclusion.
SA recently lobbied against Washington enacting legislation for a full review of relations between the two countries. In May the US House of Representatives passed legislation requiring the Biden administration to undertake a full review of SA relations with the US. The US-SA Bilateral Relations Review Act is not yet law as it needs to pass in the Senate and be signed into law by the US president.
The bill reads: “In contrast to its stated stance of nonalignment, the SA government has a history of siding with malign actors, including Hamas, a US-designated foreign terrorist organisation and a proxy of the Iranian regime, and continues to pursue closer ties with the People’s Republic of China and the Russian Federation.”
US-SA relations have been marked by tension for the past two years, sparked by Russia’s invasion of Ukraine in February 2022. The US and European governments are conducting an intensive campaign to rally African governments to oppose Moscow’s invasion of Ukraine. SA choses to remain nonaligned.
African countries are looking for an early extension of the trade pact before its expiry and for it to be extended by 10 more years.
Its extension requires a bipartisan consensus in the US Congress to secure the necessary backing for its renewal.
“We take note that the annual reviews contribute to uncertainty and unpredictability, and urge the US administration to adjust [the] Agoa eligibility review from the current practice of annual review to a three-year cycle, in alignment with other US preference schemes,” Tau said.
“We call upon the US administration to reassess the impact of annual and out-of-cycle reviews, which reduce investor appetite.”
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