Ten days before the 30% tariffs by President Donald Trump kick in, our government still has no plan to protect our exporters from these taxes into the US markets.
Instead, the presidency appears happy to engage in an unhelpful spat with the DA. For a week now, the presidency has been embroiled in a war of words with the DA over the status of Mcebisi Jonas as President Cyril Ramaphosa’s special envoy to the US.
It has emerged that Jonas, the businessman and chair of telecom giant MTN, was told he is unacceptable in Washington months ago. His visa was denied soon after his appointment in May. Under pressure from being caught out in a lie, the presidency has attacked the DA with anything under the sun, including misinformation and racism.
When the lie became unsustainable, Pretoria employed diversionary tactics. It fudged Jonas’s mandate to include representing Ramaphosa in North America instead of just the US. Minimally, this is embarrassing to Ramaphosa, his press secretary Vincent Magwenya and Jonas, and, worse, to the country’s economic operators.
As well as his unflattering remarks about Trump in media interviews, Jonas’s association with MTN, which also operates in the US-sanctioned Iran, is a source of irritation to the Oval Office. There doesn’t seem to be any effort expended on making amends with the White House.
Ramaphosa braved humiliation to visit the White House at Trump’s invitation two months ago. Many thought, rather optimistically, he had calmed the storm. Evidence now suggests otherwise. Not only has his special envoy been rejected, it turns out that his bilateral trade offer to the US has been unacceptable. Trump’s administration has threatened 30% tariffs on August 1.
It’s unlikely a substantively new and improved offer can be tabled by the ministry of trade, industry & competition before then. In all likelihood, our exporters should brace themselves for diminished access to the US markets even before the formal expiry of the African Growth & Opportunity Act (Agoa) — the unilateral trade law that grants African exports duty-free and quota-free access to the US market.
Trying to spin Pretoria out of the self-erected corner sounds myopic and unpresidential. Clearly, the most honourable thing to do is to back-pedal on the Jonas deployment to the US. Even him stepping down from chairing the MTN board will not make him acceptable to the US.
SA has good relations with Mexico and Canada. There is no need for a special envoy over and above our normal diplomatic relations with North America. The relationship that requires urgent attention is one with the US.
It’s hard to think how this could be fixed with Band-Aid treatment such as appointing special envoys. What we need is a thoughtful appointment of a permanent ambassador to one of our key markets. There are many credible South Africans who would be acceptable. The search, however, has to go beyond the data base of the ANC’s deployment committee.
On trade, our new ambassador and their staff would play a supportive role to the department of trade, industry & competition team of negotiators. It’s evident that the department was caught napping by Trump’s election. All efforts were spent on securing the continuation of Agoa despite the rapidly deteriorating bilateral relationship.
The change in the political heads of the department didn’t help. Ebrahim Patel, Parks Tau’s predecessor, did well to save SA’s place in Agoa. But he and his successor lacked the foresight to formulate a modern reciprocal trade agreement.
Over time, like other state departments, the department of trade, industry & competition has lost critical skills such as trade negotiations. Much of these are now in the private sector.
More concerning is not involving the private sector — the sector most affected by tariffs — in strategies to put together a deal that doesn’t blunt our exporters’ competitiveness.
Ramaphosa needs to show us that he cares about our exporters’ pain — threats of market share losses and jobs. This means, among others, involving — and listening to inputs from — the private sector.
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