A Trump presidency could threaten the future of the African Growth and Opportunity Act (Agoa), while a Harris presidency may lead to a bigger emphasis on human rights and governance standards, as well as green energy.
Agoa, which has brought significant benefits for bilateral trade between the US and South Africa, expires next year, but “current and future US policy trends could affect Agoa’s trajectory, potentially damaging African economies”, says Ronak Gopaldas, director at Signal Risk and former head of country risk at Rand Merchant Bank.
Gopaldas points out in a report for the Institute for Security Studies that both the Trump and Biden presidencies have been dominated by economic nationalism and a preference for bilateral trade agreements, “which could undermine regional programmes like Agoa”.
“The strategic trade and investment partnership with Kenya is a case in point, aimed at strengthening ties with nations where the US feels it can exercise more meaningful influence.”
The act has allowed certain goods from African countries duty-free access to the US market since 2000.
“Given Trump's scepticism of multilateral frameworks, Agoa’s continuation could be legitimately under threat. Although Africa might not feature prominently on his agenda, Trump’s first administration did push for trade deals with select African countries, suggesting a preference for bilateral engagement. He’s also explicitly linked trade to strategic partnerships, so countries not aligned with US security goals could face reduced support under Agoa,” says Gopaldas.
Harris, on the other hand, may incentivise investments in sustainable energy and digital infrastructure, or even expand trade with Africa in order to counter extremism, instability and “economic fragility” in areas strategic to the US.
“Whether Agoa is renewed or replaced will depend on how Africa fits into the US’s geopolitical and geo-economic strategy.”
Gopaldas outlines a few possible scenarios:
- The status quo may be maintained, but with minor changes. This seems unlikely in light of senior congressmen flagging South Africa’s ties with Russia and China.
- A new Agoa may come with stricter conditions on governance, which could result in the withdrawal of preferential access for countries aligning too closely with China.
- Agoa may be replaced by bilateral trade agreements, especially with those seen as strategic partners, which could fragment the US’s trade relationship with Africa.
- Agoa could be reassessed due to a perception of growing Chinese influence on the continent.
A substantial Agoa reform, rather than dismantling, seems the most likely outcome
On the positive side, an updated and modernised approach may strengthen US-Africa ties. A new framework focusing on sustainability, innovation and inclusive development is arguably overdue,” Gopaldas concludes, adding that an investment component may offer “a more compelling counterweight to Beijing’s influence, tying into Washington’s broader industrial policy”.
“Ensuring that smaller or less-developed African nations can take better advantage of trade preferences would address criticisms of the programme.”
