President Cyril Ramaphosa is reported to have said at an event hosted for investors in Johannesburg on February 26 that “we’ve got to make a deal [with US President Donald Trump] of one sort or another, on trade issues, on diplomatic issues, on political issues, a whole span of issues.”
A day later came the announcement that funding for SA under the US President’s Emergency Plan for Aids Relief (Pepfar, launched in 2003) has been stopped. The local reaction was that the “whole region is now in deep trouble”, and unless the SA government filled the gap more than 500,000 additional deaths could be recorded over the next decade.
Trump’s decision to freeze aid came in response to SA’s new expropriation law and “aggressive positions” vis-à-vis the US and its allies, including accusing Israel of genocide in the International Court of Justice. SA might also be kicked as a beneficiary of the African Growth & Opportunity Act (Agoa).
Ramaphosa’s statement did not reveal any specific aims, nor how to approach negotiations with the US, but it does imply a major policy shift. What we now hear signifies pragmatism, a more realistic approach — a different tone to SA’s previous response that “we are a sovereign nation and will not be bullied”.
Let’s assume SA has not allowed itself to be bullied and that the SA state (governments do not have sovereignty) has lost nothing of its sovereignty since, then what explains the new approach to Trump? SA is the only country against which he issued an executive order for doing “very bad things”.
SA is dependent on US aid and needs access to the US market under Agoa preferences. Yet it is in the same boat as many others; scores of government leaders have booked flights to Washington lately. They want to get on with business with the US and that means getting on with Trump.
Agoa is up for renewal by September and losing preferential access to the enormous US market must clearly be avoided if at all possible. Ramaphosa noted that the US is SA’s second-biggest trading partner. But Agoa is not a trade agreement, it is a unilateral, conditional and non-reciprocal preferential trade arrangement based on US legislation. Its terms or renewal cannot be negotiated. And there is no indication yet of whether Agoa itself will be renewed when it expires in September.
Pretoria apparently no longer sees it as a priority to educate Trump about SA’s fine constitution, nor to correct his “misunderstandings” regarding the Expropriation Act. That approach will not work as a launching pad for a worthwhile deal, however much one may sympathise with Ramaphosa when it comes to the quality of the information conveyed to the US government about SA’s domestic politics.
The potential exodus of some white Afrikaners should best be ignored; if they do want to leave local shores they cannot be prevented from doing so. When they eventually see the Statue of Liberty it will be on terms yet to be announced by the White House. Return tickets to SA are unlikely to be included.
That SA now wants to “make a deal” reflects realism but also the dearth of alternatives. Making a deal with the president of the world’s most powerful state (who considers himself the ultimate dealmaker) means Pretoria will have to be ultra smart. What exactly do we want, and what do we have to offer? Access to more “strategic minerals” (if we still have them) might not be enough. A deal that allows Starlink to operate in SA without having to jump through BEE hoops might be a starting point. And it will be popular among South Africans.
But how does Pretoria get an audience with Trump or his senior officials? According to media reports, Washington has so far shunned all diplomatic efforts by Pretoria to reset its relationship with the US. Pretoria will have to come up with a well-designed and professional initiative to get the ball rolling.
Ramaphosa said he wants Trump to visit SA, after two senior US officials boycotted Group of 20 meetings in SA. His statement that “it’s an interconnected world — we’ve got to deal with each other” is true, but not an indication of a level playing field for future negotiations with Washington.
Relations with America were conducted quite differently under the Joe Biden administration, but that applies to the whole world. Uncle Sam has a different and unpredictable persona now. The Economist wrote in its end-February edition that “Donald Trump has begun a mafia-like struggle for global power”.
What will be on Pretoria’s agenda if and when it gets to negotiate a trade agreement with the US? What would Washington want to discuss? Ramaphosa has hinted at “trade issues, diplomatic issues and political issues”. That sounds as if everything is on the table. This should be narrowed down as much as possible, and priorities worked out. Sensitive political matters and trade liberalisation merit separate negotiations and proper sequencing.
When trade negotiations are eventually launched a comprehensive free trade agreement (FTA) will probably be discussed. Pretoria refused to do so when Washington proposed a comprehensive FTA with the Southern African Customs Union (Sacu) in 2003. The US has only one FTA with an African state, signed with Morocco in 2004 and entering into force in 2006. Sacu’s economic partnership agreements with the EU and UK will be too narrow in focus for Washington’s taste. A new FTA model will have to be worked out.
Timing will be important. We do not yet know Agoa’s fate, nor what trade policies Trump prefers. He is known to love tariffs, but modern trade agreements are complex and deal with many additional matters. When he issued his executive order on January 20 for all US trade agreements to be investigated to develop a new America First trade policy, he requested a detailed report by the beginning of April.
He instructed US agencies and officials to conduct a complete “top-to-bottom” review of America’s trade policy to establish “a robust and reinvigorated trade policy that promotes investment and productivity, enhances our nation’s industrial and technological advantages, defends our economic and national security, and — above all — benefits American workers, manufacturers, farmers, ranches, entrepreneurs and businesses.”
Many things need to be attended to before a new trade agreement can be negotiated. Pretoria has experienced negotiators, but the US under Trump is not the usual counterpart. One of the challenges will be to work out space to get SA’s and Sacu’s offensive and defensive interests recognised. Sacu, which has a common external tariff, is vital for SA’s trade and regional integration agenda. It is also the world’s oldest functioning customs union.
Shifts in policy will have to be worked out, sold to the domestic audience and eventually to international partners as well as the African Continental Free Trade Agreement state parties. Some African states, such as Kenya, might want to conclude their own bilateral deal with the US.
Leadership, hard work, detailed planning and an inclusive approach are required. The government of national unity and all other relevant stakeholders must be on board.
• Prof Erasmus is an associate of the Trade Law Centre.
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