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Thu May 25 18:20:53 SAST 2017

Trump likely to be indifferent to Africa

KATHARINE CHILD | 2016-11-10 06:12:05.0
Donald Trump. File photo.
Image by: ANDREW KELLY / REUTERS

US president-elect Donald Trump is likely to be as indifferent to Africa as he was when he made his first foreign policy campaign speech in April - when he barely mentioned the continent.

But the South African wine, fruit and luxury-car businesses that trade with the US and benefit from the provisions of the African Growth and Opportunity Act (Agoa) are unlikely to be adversely affected until 2025, when the trade agreement ends.

The act improves access to the US market for many South African goods and allows fruit and wine from Western Cape to be exported duty-free to America.

"This law is enacted by Congress. It will not be directly affected by the presidential election," said SA Poultry Association head Kevin Lovell.

Trump has promised to put "America first", raising concerns about changes in US foreign policy.

But even with Trump's insular attitude, the head of the Western Cape Investment and Trade and Promotion Agency, Tim Harris, said he did not foresee a cancellation of the agreement, but the agency would "keep its eye on the ball".

"The real risk is after 2025, when the Agoa agreement ends."

If Trump is re-elected after a four-year term, his second term will end in 2024.

Harris said that between 2001 and 2014 South Africa's exports of Agoa products to the US increased by an annual average of 44% - from R3.9-billion to R16.6-billion.

Although South Africa's Agoa benefits are not immediately under threat, some analysts are concerned about the long-term effect of Trump's inward-looking attitude on world trade.

"South Africa must also assess what new geopolitical risks may arise in the event of a more confrontational Trump foreign policy towards countries like China or Russia, with which South Africa has important economic commitments," said North West University School of Business and Governance professor Raymond Parsons.

Other analysts have said it is too early to predict the effects of a Trump presidency outside the US.

The rand weakened yesterday as expected.

"The markets will react to almost any changes in political leadership," said Ismail Lagardien, executive dean of the faculty of business at the Nelson Mandela Metropolitan University.

"We have to wait for the dust to settle and for clarity on Donald Trump's actual policies.

"Remember, until last night it was all about electioneering, which is accompanied by a lot of noise and rhetoric."

Wits economics professor Tinashe Chuchu said: "If we are to take him at his word during campaigning, Trump proposed much higher tariffs on goods from outside the country - up to 15% increases in tax, which could affect South African businesses exporting into America [not under Agoa], which are already paying 20%."

In that event, South Africa might have to look at doing more business with China, he said.

Trump had promised to boost jobs in US manufacturing, including the car industry, which was gutted by the 2008 financial markets crash. He is expected to push for tougher immigration laws, as promised in the now infamous speech in which he threatened to erect a wall along the US-Mexico border.

Chuchu said it might become harder for South Africans to get work visas or emigrate to the US.

Countries such as Malawi, which rely heavily on US aid, could face major setbacks, University of Johannesburg humanities professor Peter Vale writes in The Conversation.

"As a businessman, Trump will want something in return and it's unlikely he will get his sort of returns on investments in most African countries. His response might be that of a reality-show host - eject errant contestants."

The US President's Emergency Plan for Aids Relief has been central to South Africa's efforts to stem the spread of HIV/Aids and treat those who have contracted the HI virus. The fund committed to giving $500-million for South Africa's Aids response in 2012. It will provide $250-million next year.

New York HIV/Aids activist Mitchell Warren said Trump's relative silence on global HIV/Aids research and treatment has left the health community with "understandable anxiety".

"[The emergency plan] has strong bipartisan support in the US and we have to hope that President Trump does not derail these precious resources."

The US embassy said the US had bi-partisan support for US-Africa policy for years. - Additional reporting by Shaun Gillham

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