South Africa still negotiating for Agoa inclusion

South Africa is still negotiating Agoa inclusion after the United States (US) House Committee voted for a three-year extension for this important part of legislation that gives African countries duty-free access to US markets for 1 800 products.

Even before the beginning of the current US administration under President Donald Trump, lawmakers in the US were calling for kicking South Africa out of the African Growth and Opportunity Act (Agoa), and after the quite disastrous meeting with President Cyril Ramaphosa in the White House, experts were quite sure that the country would lose this privilege.

Agoa expired on 30 September this year but received a last-minute reprieve on 10 November, after the US House Committee on Ways and Means voted in favour of a three-year extension. However, South Africa is likely to be excluded amid ongoing tensions with the Trump administration, Brendon Verster, senior economist at Oxford Economics Africa, says.

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Tariffs paid could be refunded if Agoa extension is approved

Committee chairman Jason Smith of Missouri said the proposed Agoa Extension Act would set 31 December 2028 as the new expiration date and “retroactively liquidate tariffs incurred after 30 September”, meaning that US importers might receive refunds on imports that face higher tariffs after this date, Verster says.

He points out that Smith emphasised that the US remains committed to working closely with African markets, describing the relationship as mutually beneficial. The draft includes all members from the previous Agoa text, but South Africa’s inclusion remains uncertain amid tensions with Washington.

Ahead of the Ways and Means Committee’s vote, US Trade Representative Jamieson Greer noted the Trump administration was open to a one-year extension but might exclude South Africa, calling it a “unique problem.” South Africa’s trade ministry said it is committed to ensuring inclusion if Agoa is extended.

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Only some African countries had success under Agoa

Although sub-Saharan Africa’s overall exports to the US have dwindled since an initial surge between 2002 and 2008, some countries had specific successes under Agoa, which they would hope to build upon with the extension, Verster says.

“Agoa provided major benefits to textile and apparel exporters in Lesotho, Madagascar, Kenya, Ethiopia (before its suspension) and Mauritius. In addition, South Africa’s citrus and passenger vehicle exports to the US rapidly grew under the Act.

“Despite the success of the Agoa in specific areas, total exports to the US remained largely commodities-driven. For South Africa, Nigeria and Ghana, exports mainly consist of oil, metals and precious stones. Consequently, the Act broadly failed to support African-made manufactured goods and drive long-term industrialisation evenly across the region.”

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Approval of Agoa extension marks first step in US legislative process

He says while the Ways and Means Committee approved a three-year extension of Agoa, this is just the first step in the US legislative process. The bill must next be debated and voted on by the full House of Representatives. If approved, it moves to the Senate, the upper chamber of Congress, where it can be passed, amended, or rejected.

If the House and Senate versions differ, a conference committee resolves the differences, and both chambers must approve the final text. Only after that does the bill go to the president, who can sign it into law or veto it. Committee approval signals support for Agoa, but the extension is not yet law and still faces multiple steps before it can take effect, Verster warns.

“Trump’s sweeping ‘Liberation Day’ tariffs announced in April effectively nullified Agoa, despite the Act being in effect at the time. If those tariffs on African nations are not revoked, there might not be a real difference between scrapping and extending the Act. In addition, given President Trump’s ‘America First’ stance, a key consideration for extending the Agoa would be whether the Act actually benefits US companies.”

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Agoa’s official extension far from foregone conclusion

While the Ways and Means Committee vote marks a step in the right direction, Agoa’s official extension is far from a foregone conclusion. Verster says the persistent trade deficit with sub-Saharan Africa is likely to be a thorn in Trump’s side, but he could be swayed by the sought-after critical minerals the region offers.

“Should the US Congress decide not to pursue an Agoa extension, we think it is likely that the US will seek individual, country-specific trade deals with nations that are tailored to its own ambitions. Still, Agoa remains a vital tool for countering the US adversaries’ ambitions on the continent (including Russia and China), as several committee members noted during the session.”

Verster says that although this is only the first step in extending Agoa, it is a positive sign and a political win for the countries that hope to benefit from the Act. “It also underscores that the US still retains some interest in Africa, albeit less than under previous administrations.

“South Africa’s possible exclusion highlights just how strained relations with Washington have become, arguably the worst with any African country. Pretoria will likely work hard to secure any inclusion in Agoa, given the economic benefits, but we think progress will be limited under the current US administration.”

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SA has not given up on Agoa yet, still negotiating

Kaamil Alli, spokesperson for Trade, Industry and Competition Minister Parks Tau, reminded the media last week that the Bill will have to go to the House and follow the US legislative process.

“We are tracking its progress closely, and we continue to lobby for South Africa’s inclusion in any extension of Agoa legislation.”