There is no denying South Africa is on the United States’ radar. First, US Secretary of State Antony Blinken arrived for strategic dialogue, and then President Cyril Ramaphosa jetted off to Washington for a tête-à-tête with President Joe Biden, who delivered the personal invitation via Blinken. The Department of International Relations and Cooperation’s (Dirco’s) Minister Naledi Pandor says the President’s visit to the US provides the government with an opportunity to strengthen bilateral relations – and strengthen them he must.For years now South Africa has been looking the US gift horse of the African Growth and Opportunity Act (Agoa) in the mouth. Even though the country is sanctioned to export some 6 500 products duty-free to the US under this legislation, more than 50% of South African exports to the US last year were focused on five tariff codes – automotive and four precious metals.“These five tariff lines completely dominate our exports to the US,” says economist Francois Fouche from Growth Diagnostics and the Centre for African Management and Markets at GIBS. “The automotive industry is by far doing the most. About 35 products in total account for more than 55% of our Agoa exports, but if you exclude the automotive sector, then the bulk of exports is in precious metals, like platinum for automotive catalysts. The problem with that is precious metals and minerals don’t require trade agreements as they hardly attract import duties anywhere.”Speaking to Freight News, Fouche said the fact that South Africa, after 22 years of Agoa, was focused only on automotive and precious metals, was concerning. “The reality is that South Africa is just not competitive for most other exports into the US. Nobody in that market, which is large and attractive, cares about our lack of competitiveness at an industrial level or about the unemployment rate or our deteriorating infrastructure. No one cares about the corruption or the requirements we are placing on businesses around who can be employed and what they must earn. The only thing this market is concerned about is if we offer value. If we don’t, they find it elsewhere.”Fouche said it was imperative that South Africa looked at improving relationships with the US as its size alone made it an exceptionally attractive market for exporters. In 2015, South Africa lost its access to Agoa over a dispute about US chicken imports. The Agoa status was reinstated after the country capitulated on chicken import tariffs via rebates for certain quotas. Despite this, the chicken dilemma has dragged on, with no real progress made by South Africa to date.“We should be doing everything in our power not to lose our preferential access to the US market,” said Fouche. “I think we are running a real risk at present of letting our beneficiary status slip through our fingers.”He said South Africa’s unwillingness to take a stand after President Vladimir Putin invaded Ukraine was just one example. “This is a foolish trade and investment strategy at the international level. We don’t trade much with Russia but we do trade extensively with the US.”
