Anticipation over US President Donald Trump's first 100 days in office was short-lived when just hours after his inauguration he set the ball in motion, signing several executive orders which would have implications on geopolitics.
Among these was his decision to pull the US out of the World Health Organisation and the Paris Climate Agreement.
South Africans and the media have been speculating on whether or not President Cyril Ramaphosa's government will suffer any punitive action by the US, one of its largest trade partners, for its position on geopolitical matters — none more so than the position the ANC and government have taken to get into a legal wrangle with Benjamin Netanyahu's government, taking bold action against nuclear-powered Israel, a US ally, at the International Court of Justice.
Even before Trump was in office, Pretoria was at risk of losing its status as a beneficiary of the hugely beneficial African Growth and Opportunities Act (Agoa), which brings in millions of dollars to the country.
Agoa ensures that South Africa's trade exports dock in the US customs duty-free. This takes a heavy financial burden off of many of South Africa's small to medium-sized companies to export agricultural produce (among other products) to the US.
One way the Trump administration could frustrate Ramaphosa is the debate over reciprocal access to duty-free. This would mean that imports from the US would enjoy the same duty-free access, costing South Africa millions of dollars and reversing the benefits to Agoa.
In 2023 the then US deputy assistant secretary of state in the Bureau of African Affairs, Joy Basu, told the Mail & Guardian the conversation over reciprocal duty-free access to South Africa was taking shape in the US.
“I think that reciprocal access will continue to be a conversation. We are very proud of Agoa. It is an incredibly generous programme, it is unilateral, and we want to find ways to increase two-way trade,” she said.
“Maybe through Agoa, maybe through other trade programmes. I think conversations will continue. We need to think about the right channels for all of them.”
The African Union has also caught wind of this debate, with the commissioner for trade and industry, Albert Muchanga, arguing it would not be possible. He said his engagements with the US Congress and administration had revealed some misunderstanding on how to exploit the African Continental Free Trade Area, with a number of them thinking “they can produce goods in the USA and export them duty-free across the African Continental Free Trade Area”.
There have been legitimate concerns on whether or not South Africa is upholding its end of the bargain as agreed to under Agoa to continue to maintain access for this unprecedented trade benefits that it enjoys with the US
— Reuben Brigety, former US ambassador to SA in December interview
“I told them very very frankly that that is not possible,” he said.
As part of his executive orders, Trump stated he was seeking to address unfair and unbalanced trade. He said the US trade representative will review its existing trade agreements and sectoral trade agreements and recommend any revisions that may be necessary or appropriate to achieve or maintain the general level of reciprocal and mutually advantageous concessions for free trade agreement partner countries.
In a December interview with the Sunday Times, former US ambassador Reuben Brigety said there were concerns from the US's agricultural sector regarding undue restriction to the South African economy for US exports as it relates to poultry, pork and dairy.
"There have been legitimate concerns on whether South Africa is upholding its end of the bargain as agreed to under Agoa to continue to maintain access for this unprecedented trade benefits that it enjoys with the US. I suspect those are the sort of things that are going to be discussed as we figure out if Agoa is going to be extended and what South Africa's role is going to be," he said.
With Trump having already taken a stern position on Brics nations over a possible abandonment of the dollar as a trade currency, Ramaphosa's government will need to tread carefully when navigating the Trump era.
Despite having received reassurances from the Biden administration that South Africa will be part of the countries who receive an extension on Agoa, it's not easy to predict what lies in wait for Ramaphosa with the new Trump administration.
For opinion and analysis consideration, e-mail Opinions@timeslive.co.za
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.