Could ANC attack on US derail trade relationships?

South Africa’s tenuous inclusion in the newly extended United States’ African Growth and Opportunity Act (Agoa) – which is still subject to restrictions – could once again be in jeopardy following a strongly worded critique against US foreign policy by the African National Congress (ANC).

Last week, ahead of the 14th Agoa Forum in Gabon, the ANC released its policy discussion document for the National General Council meeting noting that the US “does not appreciate the resurgence of China and Russia as dominant factors in the arena of international power relations”. The document went on to say that instead, the US had “declared a cold war against these two emerging powers”.

Frans Cronje, CEO of the Institute for International Race Relations (IRR), described the “attack” on the US as “unfortunate and damaging”, telling FTW Online that this could result in South Africa being sidelined in trade and diplomatic relations with Western economies such as the United States and Europe, including Agoa negotiations.

He added that this was particularly short-sighted from an economic perspective at a time when the economic prospects for China were in doubt and Russia waws also experiencing economic trouble. “We are placing all our foreign policy eggs in the Sino/Russia economic basket when what South Africa actually needs is a multipolar approach to foreign policy – as is the case for the majority of other emerging markets.”

Cronje said the IRR encouraged expansion of economic and diplomatic relationships with China and Russia, amongst other emerging markets, but that this did not have to be at the cost of impairing relations with the West.

He pointed out, however, that Western powers also shared part of the blame due to their complacency and “astute lack of diplomacy” in dealing with South Africa in the past. “China has invested heavily in infrastructure and other development projects and has been wooing trade partners over the past decade while, to a large extent, our traditional Western trade partners have simply assumed the trade relationship would continue,” said Cronje.

In response, US Embassy spokesperson Cynthia Harvey said: “The United States invests in the people of South Africa.  We work with South Africa in response to health and environmental crises, and we continue to seek to work together to increase trade and security, create new jobs, improve infrastructure, promote human rights, and integrate markets across the continent.”

She told FTW Online that the US welcomed the attention that Africa received from other countries. “The more trade interest Africa receives, the more tools and mechanisms we have to further incorporate Africa into the global economy,” said Harvey, adding that competition was good for the world’s economy.

But, according to her, so is making sure there is a fair and level playing field and that the country’s people are the ones who benefit from its economic activities.

Harvey concluded that there were approximately 600 US companies active in South Africa – with an annual turnover of roughly 10% of South Africa’s annual gross domestic product.