President Cyril Ramaphosa's office has again taken umbrage with DA federal council chair Helen Zille after she said South Africa's position in the African Growth and Opportunity Act (Agoa) was under threat.
Speaking to TimesLIVE Premium on Wednesday, presidency spokesperson Vincent Magwenya said Zille's sentiments “demonstrates a lack of understanding of how trade relationships and agreements are formulated and how they are managed”.
“Zille is creating unnecessary hype and uncertainty around a very key and important trade relationship,” he said.
Zille appeared on SABC's Face the Nation on Tuesday night where she rationalised why the DA would not pull out of the GNU.
“If we go out of the GNU you will have either a minority government which will be totally unstable, or you will have an ANC/EFF/MK coalition, which is what Paul Mashatile wants, which will destroy South Africa's economy within a week. The amount of disinvestment, the amount of international revision of the approach to South Africa. We would be kicked out of Agoa as well. We must understand what the stakes are ...”
Zille said she believed South Africa would be kicked out of Agoa anyway. This is despite statements by the US Chamber of Commerce this week expressing its intention for a continued partnership with South Africa as it assumes the G20 presidency.
“President [Donald] Trump is not playing,” Zille said.
But Magwenya dismissed this as a “right-wing unprogressive tendency”.
Magwenya said Zille and her ilk had a tendency to seek to undermine South Africa's sovereignty by using trade agreements such as Agoa as a stick to beat the country into submission.
“That agenda misrepresents the true nature of trade agreements as if they are one-sided and they only benefit one side of the bilateral relationship. It is rather unfortunate that politicians, particularly from the DA, will threaten South Africa about Agoa in a way that comes across as somebody who wants to cut off their nose to spite their face.
“However, in our interactions with US officials at various levels, there has never been a time when we picked up a sense that our participation in Agoa may be under threat. It's a trade agreement that gets reviewed from time to time like all other trade agreements.”
The US Congress is expected to review Agoa in 2025 when the agreement lapses. African countries that benefit from Agoa are pushing for a 10-year extension of the agreement.
South Africa hosted the Agoa summit in 2023. There was a view by US lawmakers that South Africa's economy was developed to a point where the exemption should no longer apply.
The criteria to qualify for Agoa include market-based economies, the rule of law and political pluralism.
The total two-way investment in 2021 came in at just over $11.9bn between the two countries, with $7.4 bn in US investment in South Africa while local firms invested $4.5bn in the US.
The US is a significant market for South African goods and a key source of investment, being its second-largest national trading partner after China. South Africa is also the largest single exporter to the US from the African continent.
The US Congress has in the past called for American businesses to get reciprocal duty-free access to Africa.
Recently some US Congress representatives called for a review of its trade deal with the country owing to Pretoria's non-aligned stance in the Russia/Ukraine war and its position on Israel's war on Gaza.
There was nothing threatening about reviewing an existing trade agreement, Magwenya said.
He said the review in part was attributed to the evolving economic dynamics in the participating countries.
“So there is no evidence to point to our Agoa participation being under any threat under a Trump administration. There was no threat to Agoa when President Trump was in the White House for his first term. We don't believe that there is a threat now because this is a two-way relationship. It's a mutually beneficial relationship.
Therefore what happens in Agoa as a key feature or element of our bilateral trade relationship is something that cannot be decided at a stroke of a pen. It's something that cannot be decided unilaterally. It's something that will be discussed and negotiated
— Presidency spokesperson Vincent Magwenya
“It's not a one-sided relationship. If the US decided to terminate South Africa's participation in Agoa, the US will be affected as much as we would be affected. It's false to purport that a unilateral action or rather a punitive unilateral action against South Africa will only impact South Africa.”
Magwenya motivated his argument pointing to the significance of US economic interests including its minerals imports and its more than 600 companies operating in the country.
The US has very clear economic interests in South Africa, he said.
“Therefore what happens in Agoa as a key feature or element of our bilateral trade relationship is something that cannot be decided at a stroke of a pen. It's something that cannot be decided unilaterally. It's something that will be discussed and negotiated,” he said.
Meanwhile president of the US-Africa Business Centre at the US Chamber of Commerce, Kendra Gaither, said it would support South Africa’s efforts to join the B20 troika, alongside Business Unity South Africa, to champion policies that encourage economic inclusion and expand opportunities for innovation and investment. The B20 troika refers to the group of three countries that consists of the current, previous and incoming presidents of the G20.
Gaither said the US chamber will work closely with its partners to ensure continuity as the US prepares to assume the G20 presidency in 12 months.
“Through advocacy for pro-business policies and trade facilitation, the US chamber will engage with policymakers and private sector leaders during South Africa’s G20 presidency to ensure the voice of American business continues to contribute to advancing global prosperity and job creation.”
Magwenya said Ramaphosa looked forward to engaging Trump once in office, in the context of South Africa's strategic bilateral relationship with the US and the country's participation in the B20 Troika. He said Ramaphosa remained confident South Africa will continue to maintain this strategic partnership with the US under a Trump administration.
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