Despite being dogged by controversies, the annual Africa-US trade meeting has gone off relatively smoothly. The host, SA, has to be commended for rolling out the red carpet for the delegates to make the meeting successful.
But the meeting, known as the Africa Growth & Opportunity Act (Agoa) Forum, has also laid bare the challenges that lie ahead in making the trade programme mutually beneficial.
Ahead of the three-day meeting, which took place outside Johannesburg, there were doubts that SA would remain the host of the forum’s deliberations. The doubts stemmed from SA’s controversial position on the Russia-Ukraine war.
Pretoria has refused to condemn Russia let alone call it an aggressor in the war which is now nearing a second anniversary. Earlier this year, it risked being dropped from the beneficiaries of the programme that unilaterally grants thousands of African exports after allegations that Lady R, a Russian vessel, might have picked up arms for Russia’s army.
The vessel, which is under Western sanctions, docked mysteriously at Simon’s Town last December. The government tried and failed to adequately explain the contents of the cargo the ship was carrying. Months later, the government set up an inquiry to investigate the Lady R debacle.
The tensions between Washington and Pretoria have since been defused through intensive lobbying by SA’s civil society, business and labour unions. SA’s preferential access to US markets — which sustain thousands of local jobs — remains in place at least until the end of the 10-year Agoa programme which expires in 2025.
However, the risk of SA’s exclusion remains.
On the eve of the high-profile meeting, the US dropped four African beneficiaries from the 20-year-old programme, citing human rights concerns. Those struck off the list of beneficiaries are Gabon, Uganda, Niger and the Central African Republic. Gabon and Niger are run by military juntas, while Uganda, though still passing off as a democracy, has launched an assault on same-sex relationships.
During the meeting anti-US demonstrations were held to protest against America’s support of Israel in the latter’s war against Hamas in Gaza.
As the meeting was under way, a US legislator called for SA to be excluded from the programme because of its proximity to China. SA is a member of Brics — the bloc that includes Brazil, Russia, India and China — and has strong relations with Iran which is due to be accepted as a Brics+ member next year.
Still, all the controversies failed to collapse the meeting. And positive developments have come out of the deliberations. The Agoa programme, an innovative trade instrument, remains relevant especially now.
Cyril Ramaphosa, SA’s president who addressed the meeting, is correct in calling for a longer extension of the programme which was first introduced by president Bill Clinton. A 20-year extension, with three-year reviews, instead of the current annual ones, would provide investors and African exporters with much more certainty. It would also allow African countries, which are battling to integrate their economies, to build stronger supply chains.
A longer extension would also enable African countries to build industrial capacity to export manufactured products to the lucrative American market. Since its inception, Agoa has largely been used by SA, Africa’s most industrialised economy.
An extension would allow African economies to take advantage of opportunities offered by the African Continental Free Trade Area. The AfCFTA is Africa’s best effort yet to bolster intra-African trade, and to establish economies of scale to tackle export markets.
Calls to expand the products that qualify for duty-free access to the US are unlikely to be heeded. After all, the programme does not require reciprocity from African markets. A reciprocal free trade area is not worth it, besides it would take years to negotiate. Similarly, it is unlikely that Washington will delink the trade programme from its foreign policy goals such as human rights and multiparty democracy.
The world has manifestly changed in the past 20 years. When Agoa was launched China was a developing country with high levels of poverty and inequality. Today, China scarcely qualifies to be called a developing country despite its claim to be one. Its economy has grown to be almost the size of America’s.
The China-US relationship is characterised by rivalry and competition. As happened during the Cold War era, the developing world is being asked to choose between China and the US. This is unhelpful. Africans must trade with whomever advances their economic interests.
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