Shoring up Agoa as trade wind blows

SA relies on Brics for emerging-economy clout amid Trump’s global treaty trashing

● As global trade tensions continue to mount, Naledi Pandor, SA’s minister of international relations, said she was hopeful the country would continue to benefit from the African Growth and Opportunity Act (Agoa).

US President Donald Trump began extricating the world’s largest economy from various multilateral agreements ahead of the G20 summit this week.

Pandor, speaking to the media on the sidelines of the summit in Japan, said the implementation of Agoa — a preferential trade deal with the US — had been “agreed in its continued existence” and a new round of negotiations would be due.

“What we hope we will arrive at is that there will be a framework that continues to offer market opportunities for our continent. That enhances the progress that we’ve been able to achieve through Agoa through the years.”

Her comments come as India became the latest economy to experience tension in its trade relationship with the US. Though large, diversified economies such as India and China can still to some extent stand up to the US, smaller countries find it more difficult.

Agoa was enacted in the US in 2000 and has been renewed to 2025. The programme provides duty-free access to the US for SubSaharan African countries on 6,500 tariff lines in clothing and footwear, motor vehicle components and wine, among others.

It has been most beneficial to South African fruit, wine and vehicle exporters.

Pandor said that though “I don’t think there’s an exit from multilateral bodies, what you’re seeing is almost a development of rules outside of the agreed system, and this is the real worry”.

“We are not saying the organisations are totally fair, we’re not saying we agree with all the rules that are currently in motion. There are many that we challenge, which we believe don’t fully address the needs of developing economies … But having such bodies and knowing what we operate from on a day-to-day basis is very important.”

She said if any country could, because of its economic power or world status, “rejig the system without seeking consensus, without operating in a manner that we will be used to, then that poses a danger to what we have achieved, that’s what we’re really challenging”.

The US has threatened further tariffs on China should the ongoing trade spat remain unresolved. It has also demanded that India withdraw tariffs imposed in response to US tariffs.

Pandor said: “We’re just wondering whether this [trade war] is directed at developing countries and, given that we form an extremely significant forum as Brics [the emerging economies of Brazil, Russia, India, China and SA], we must articulate our perspectives clearly.

“I think what would emerge from the Brics leaders in the next two days is that we stand together, because we believe that what has been achieved in terms of world trade arrangements has begun to accommodate the needs and interests of the developing world and we must uphold that.”

Brics contributes at least 20% to the global economy.

Pandor added: “Africa is on a roll. Many African countries are active in building new infrastructure, creating new opportunities. I think Africa is open for business.”

She said interest in the continent created a “recognition that you are dealing with an emerging Africa and one that is increasingly serious about itself, serious about the natural resources that lie within it”.

Pandor said these resources are not only for extraction and export. SA wants a larger share of the value chain by beneficiating raw materials. She said the government wants to deliberate with Japan, for example, about innovation and technology transfer that will enable SA to add more value to its natural resources before exporting them.

World trade arrangements [have] begun to accommodate the needs … of the developing world and we must uphold that