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Economy
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SA-US affairs secure despite differences

26 Jan 2024 - by Staff reporter
US Secretary of State, Antony Blinken. Source: File photo by Andrew Harnik, POOL/AFP.
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US Secretary of State Antony Blinken has refuted claims that he is snubbing South Africa during his current visit to the continent, stating that the US has a deep and special relationship with the country.

This he said despite the Biden Administration’s differences with the government of Cyril Ramaphosa and its case of genocide against Israel at the International Court of Justice (ICJ).

Blinken's assurances that trade between the US and South Africa is on track and unaffected by differences in foreign policy came on the eve of the ICJ's ruling on January 26, over instituting emergency or provisional procedures against Israel for military attacks against Hamas in Gaza.

If the ICJ rules in favour of South Africa, it might entail efforts to stop the US from supplying arms to Israel.

After Israel's rebuttal at the ICJ two weeks ago, it emerged that Blinken was about to embark on a State visit tour of Cape Verde, Ivory Coast, Nigeria, Angola, and the Democratic Republic of the Congo (DRC).

Not including South Africa, the US's biggest trading partner on the continent after Nigeria, seemed to support notions that relations between Pretoria and Washington had become strained.

It added to a pattern of suspected South African support for Russia due to its dithering over the war in Ukraine and who it should align with, the mysterious visit of a blacklisted Russian cargo ship, Lady R, to Simon's Town Naval Base in December 2022, and added to fears that South African trade with the US could be compromised.

Last year, several senators in Washington, and not just right-of-centre Republicans, lobbied for South Africa to be excluded from the African Growth and Opportunity Act (Agoa), citing the country's refusal to adhere to sanctions against Russia.

The ICJ matter and Blinken's subsequent exclusion of South Africa from his State visits to leading nations on the continent, only added fuel to the fire that relations with the US are heading south.

However, Donald MacKay, CEO of XA Global Trade Advisors, said affairs between the US and South Africa are more complicated than an apparent snub by Blinken.

He said: "Just under half of our exports are minerals and precious metals, and those will be purchased no matter what politics may be.

"The challenge then is to grow the balance of our trade so we send more manufactured goods to the US, but here we require a stable electrical grid and functioning ports.

"These are both disasters, making us uncompetitive anywhere in the world."

Where goodwill with the US does come into play, MacKay said, challenges can be overcome.

"But the degree of the infrastructure mess is so serious, that even having preferential market access under Agoa can't overcome the negative impact on our export competitiveness."

MacKay added that it must also be kept in mind that we don't only rely on the US for trade, but also for capital.

"Our stance on both Russia and Israel does place us in a vulnerable position.

“South Africa needs to hold on to the investments it already has and has to find new foreign direct investment.

“I believe this will become increasingly difficult over time."

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