SA is pushing Washington to renew the African Growth & Opportunity Act (Agoa) despite steep tariffs, with President Cyril Ramaphosa warning that trade volatility is driving the country to diversify its partners.
Speaking at the Council on Foreign Relations, a US think-tank, after addressing the UN General Assembly in New York, Ramaphosa said that while SA seeks to maintain its relationship with the US, Pretoria is deepening its outreach to Asia, Latin America and the Gulf, seeking new markets for SA-manufactured goods.
The president’s comments were pertinent to the looming expiration of the Agoa trade agreement at the end of September.
The US has not yet indicated whether the agreement will be renewed. However, the 30% tariff imposed on SA exports effectively nullifies Agoa, which guarantees duty-free access to the US for most goods and services from Africa, including macadamia nuts from SA.
Should the trade pact not be renewed, other hard-hit local exports would include vehicles and vehicle parts, citrus products and wine.
He said the recent actions by the Trump administration with regards to trade were a “wake-up call” for SA, which emphasises the need for the country to de-risk its reliance on a handful of countries for its exports.
“We are now establishing a number of, or setting up a number of, trade relations or free trade agreements with many parts of the world, the Middle East, in Asia and Latin America as well,” said Ramaphosa.
“And that does not mean that we don’t want our relationship with the US to be strengthened. The US is our second-largest trading partner outside China and outside Europe.
“[What] President Trump did was a wake-up call for [us], not so much because we were not trading with other countries, but a wake-up call in saying that we need to upgrade our relations, our trade relations, with many other countries in the world. So we’ve now embarked on an outreach programme.”
SA exports a wide range of commodities, from platinum group metals to agricultural goods. Ramaphosa, however, said the country seeks to shift away from exporting raw materials in favour of value-added production.
“We want the world to buy from us, not just rocks and dust but finished products,” he said, adding that foreign investors have shown strong interest in this strategy.
During an earlier address at the UN General Assembly, Ramaphosa warned against using trade as a geopolitical tool, saying the practice undermines development and hampers economic stability.
“It is concerning that geopolitical shocks and unprecedented trade policy volatility are destabilising the global economy and jeopardising a critical source of development financing.
“We must redouble our efforts to strengthen the link between trade and development,” Ramaphosa said. “Unilateral trade practices and economic coercion have a detrimental impact on many nations.”
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