Team Trump’s Agoa threat not righteous

Joel Pollak, Donald Trump’s slavish South African-born mbongi, thinks the US president “may be able to help” bring the Zuptacracy to heel.

“As he wrestles with the swamp creatures of Washington, Trump has some leverage to drain the swamps in Pretoria and Cape Town as well,” the would-be ambassador to Pretoria recently posted on Breitbart.

And that leverage would be? No, not a promise to Trumpify Nkandla if Zuma would agree to retire there quietly. Something even wackier: “President Trump could use his discretion to suspend SA’s Agoa [African Growth and Opportunity Act] eligibility until the country can reliably hold its elected officials accountable to the law. That might prompt Zuma to clean up his administration, or embolden voices for reform within the ANC.”

It’s not obvious Tony Leon’s one-time speechwriter has much grasp of SA’s political dynamics. Were I Zuma or a Gupta, I’d tell the orange mountebank to bring it on. I’d want him as an enemy. Kleptocrats love it when popular anger is distracted by foreign devils. Pockets at home become easier to pick. Besides, there are comrades who dismiss Agoa as heartily as they dislike Zuma.

Pollak’s suggestion is probably stillborn. The law does not give Trump the power to suspend SA’s Agoa benefits simply because many South Africans are convinced their president is a crook. The requirement is for beneficiaries to have in place, or be “making continual progress” towards, “a system to combat corruption and bribery”. No one would deny SA has such a system. It’s under strain, but it’s there nonetheless.

None of which is to say SA’s enjoyment of Agoa between now and the act’s expiry in 2025 is a done deal. Trump’s commerce secretary, Wilbur Ross, made that very plain when he addressed the Corporate Council Africa’s annual business summit here earlier this month.

He said the Trump administration wanted to move from Agoa’s unilaterally extended trade preferences to “two-way trade agreements”. Nothing particularly new in that.

More interesting — and Trumpian — was what Ross chose to emphasise next: “In the meantime, we must ensure countries currently benefiting from … Agoa continue complying with the eligibility requirements established in US law. The administration takes these congressional requirements very seriously…. We will vigorously protect the rights of US companies and workers in the global arena.”

Deliberately or serendipitously, the Office of the US Trade Representative showed Ross to be in earnest three days later when it launched an “out-of-cycle” Agoa eligibility review of three members of the East African Community — Uganda, Rwanda and Tanzania — and warned a fourth, Kenya, to keep its nose clean.

In 2016, East African Community leaders announced they were raising tariffs on imports of cast-off clothing and shoes they said were stifling domestic manufacturers. In March, Smart, the Washington trade association that represents the “secondary materials and recycled textiles industry”, petitioned the US Trade Representative for retaliation. About 40,000 US jobs and exports valued at $124m were at stake, the lobby claimed.

If the tariff increases are consistent with World Trade Organisation rules, and it looks as though they are, what had the East African Community done to violate Agoa? The Smart answer: they were not making “continual progress” on “the elimination of barriers to US trade and investment” and “economic policies to reduce poverty”.

Here is the reality of Agoa. The US can make whatever demands and arbitrary determinations it likes in return for duty-free access to its market. Under previous administrations, there was a tacit understanding that the act’s purpose was primarily developmental, to help African nations grow by encouraging their integration into global value chains. That was then.

If Ross is to be taken at his word, Team Trump means to use Agoa eligibility aggressively in pursuit of its America First objectives.

The only way African governments will be able to avoid arbitrary Trumpist interpretations of Agoa conditions will be to negotiate bilateral deals. Does that rule out agreements with regional communities such as the one the Obama administration was working towards with the East African Community? That’s unclear.

More predictable is that SA will come under pressure to do a bilateral deal to level the playing field for US exporters with their EU competitors. That’s where the administration will play the Agoa eligibility card, not as a lever to end the Zuptacracy.

PREVIOUSLY, THERE WAS A TACIT UNDERSTANDING THAT THE ACT’S PURPOSE WAS TO HELP AFRICAN NATIONS GROW. THAT WAS THEN.