The writing has been on the wall that Agoa would expire and South Africa must now hurry up and explore other markets.
After 25 years of Agoa, it is time for South Africa to find new markets as the US risks ceding African influence to China which announced duty-free access for all African nations.
South Africa must aggressively pursue alternative trade partnerships through Brics and the African Continental Free Trade Agreement.
Busi Mavuso, CEO of Business Leadership South Africa (BLSA) says in her weekly newsletter the expiry of the African Growth and Opportunity Act (Agoa) at the end of September marks a watershed moment in the US-South Africa relationship.
“While Agoa was effectively undermined by the Trump tariffs imposed earlier this year, it nevertheless provided a backstop for our trade relationship, a framework and a reason to work hard towards agreement on new trade terms.
“The Trump administration indicated a desire to extend Agoa by one year shortly before its expiry, but Congress has been unable to act on that ambition due to the government shutdown.
The possibility remains that an extension could be included in legislation required to end the shutdown, but even then, it is unclear whether South Africa would be included, given the broader issues between our two countries.”
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Warnings that Agoa was going to expire
She points out that back in April, when new tariffs came into force and the US trade relationship was clearly under threat, she warned that we should expect Agoa to expire.
“Diplomatic missteps and most notably the Lady R debacle in 2023 already damaged relations between our countries even before the Trump administration took office.
“That loss of goodwill, combined with perceptions about South Africa’s stance on Russia, contributed significantly to the difficult situation we face today.
“We must be honest about this: foreign policy decisions have direct economic consequences and ambiguity rarely serves national interests.”
For 25 years, from its enactment in May 2000 until its expiry in September 2025, Agoa enabled approximately 17% of South African exports to the US to enter duty-free (some products, particularly raw materials, already enter duty-free under standard trade rules).
Over this quarter-century, Agoa was critically important for our vehicle manufacturing industry, as well as significant segments of agriculture, apparel, chemicals and equipment sectors.
Crucially, Agoa supported industries with high domestic value-added content, which means they created substantial numbers of quality jobs in South Africa.
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SA was Agoa’s biggest beneficiary
South Africa accounted for 54% of all Agoa-related exports to the US, making it the scheme’s largest beneficiary over its lifetime. Mavuso says that is why Agoa’s expiry is also sharply negative for other African countries.
Nations like Eswatini, Kenya, Lesotho and Madagascar built competitive apparel and textile industries that could challenge Chinese manufacturers in supplying the US market.
In Lesotho, for instance, approximately one-third of exports were tied to Agoa, predominantly in the apparel sector, employing between 30 000 and 40 000 workers, primarily women.
“The human cost across the continent will be severe,” she says.
Looking forward, Mavuso says Washington will need to consider how long-term US interests are best served. Agoa was a cornerstone of America’s relationship with many sub-Saharan African countries. That matters profoundly, given the clear intentions of China and others, including Russia, to secure their own influence on the continent.
“Combined with the sudden shuttering of USAID, American soft power dramatically weakened on the continent. The prize for maintaining good relationships is smooth access to African resources. Many of them, from rare earth minerals to manganese and chromium, are critical for American industrial and technological ambitions.
“By allowing Agoa to lapse, the US risks ceding strategic ground to competitors at a time when African nations are actively seeking reliable trade partners.”
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Agoa probably permanently consigned to history
Mavuso warns that while trade negotiations with the US are ongoing and Agoa renewal should remain an objective, we must confront the reality that Agoa may be permanently consigned to history.
“Nevertheless, we should continue pressing for success in the Washington negotiations. Although these talks have been difficult, I know that government remains intensely focused on achieving a breakthrough.
“Business stands firmly behind these efforts, working directly with American customers and partners towards mutually beneficial trade arrangements.
“Jobs in both countries depend on getting this right. There are many US companies, particularly those integrated into supply chains with South African manufacturers, which will be harmed by Agoa’s expiry as well.”
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SA must pivot to focus on relationships with wider world and not worry about Agoa
In the meantime, she says South Africa must pivot to focus on delivering results in its strategic relationships with the wider world.
China is moving in precisely the opposite direction to the US, having announced duty-free access for all African nations it wants to maintain diplomatic ties with.
She points out that this represents a fundamental realignment of trade patterns that could reshape Africa’s global orientation for decades to come.
“The Brics structure also promises several trade opportunities, as does the African Continental Free Trade Agreement, although the latter faces significant implementation challenges around infrastructure and regulatory harmonisation.
“Our businesses will, of course, actively pursue these new opportunities, but government can dramatically accelerate progress through trade deals that facilitate duty-free or preferential access to major markets.
“Indeed, there has perhaps never been a time when it has been more critical for our trade and international diplomacy efforts to work in lockstep with business to open new markets. We are ready to work alongside government to achieve this success.
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SA must engage now while window of opportunity is open for new trade partners
“The US-created trade policy uncertainty means many countries share our ambition to build new, more reliable trade relationships. We must engage now, while this window of opportunity is open.”
However, Mavuso says, while managing international trade relationships, we must simultaneously focus on what lies entirely within our control: domestic reforms.
“An accelerated reform agenda can significantly lessen the negative effects of Agoa’s end, compounded by the Trump tariffs. Certain regions, particularly the Eastern Cape with its concentration of automotive manufacturing, are seriously affected by these developments.
“We need to drive reform as rapidly as possible to create new opportunities and strengthen our competitive position.”
She says the steady improvements achieved in logistics, from port efficiency to freight rail performance, must be dramatically accelerated.
“This is the most obvious pathway to increasing our international competitiveness, and it is entirely within our power to deliver.
“When South African products can reach global markets more reliably and cost-effectively, we become more attractive trade partners regardless of tariff regimes.”
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End of Agoa undoubtedly a setback
Mavuso says the end of Agoa is undoubtedly a setback, but we remain the architects of our future.
“Our engagements with potential trade partners are important, and business and government need to work in a focused partnership to ensure we capitalise on every opportunity, whether with the US, China, India, the EU, or African neighbours.
“We can build forward momentum by focusing relentlessly on domestic reforms and ensuring the world can efficiently access our high-quality products. Then we can work systematically to ensure those international markets are open to us with minimal tariff barriers.
“The path forward requires clarity of purpose, diplomatic skill and unwavering commitment to economic reform. All of these are within our grasp.”
