Tariffs and Agoa: How Parks Tau summarised US-SA trade talks

Minister of Trade and Industry, Parks Tau, provided a brief outline of his team’s engagements with officials from the United States.

Tau addressed the media on Wednesday evening as the dust settled on a frenetic meeting between Presidents Donald Trump and Cyril Ramaphosa in a packed Oval Office.

Trade relations were identified as a key objective of the trip to the US, with Tau discussing tariffs, minerals, and the African Growth and Opportunity Act (Agoa).

Framework agreement submitted

Tau, along with Agricultural Minister John Steenhuisen, said the two had been in talks with their US counterparts since Monday.

At the first meeting of trade representatives, US officials provided feedback on areas where the nations may not have aligned.

Tau said the SA delegation relayed this feedback back home, resulting in a revised proposal submitted on Wednesday.

“We have submitted a proposal to the United States with regards to a framework agreement, focusing on issues related to trade and investment,” said Tau.

The proposal identified areas for increased trade and access to each party’s markets, while illustrating the benefits of keeping channels as open as possible.

Agoa still before Congress

On Agoa, Tau said that South African officials were informed that the agreement was still before Congress and would be settled later.

“Having met with the trade ministers in Africa at the recent African Continental Free Trade Area Council of Ministers, we have agreed to develop a collective approach with regard to Agoa,” said Tau.

He added that a US-Africa trade forum, at which the African leaders would present this collective agreement, was in the pipeline.

“As South Africa, we have it in our document that the reauthorisation of Agoa is important,” Tau said.

The minister highlighted the role of South Africa’s neighbours in negotiations through the Southern African Customs Union (Sacu).

“The context of discussing Sacu is because we negotiate tariffs as a customs union, and this is one of the areas that the US required a bit more elaboration.

“We agreed that we would have the issues on tariffs and non-tariff barriers added, which are the issues we added yesterday,” Tau explained.

Tariff implications

Tau insisted that South Africa was a positive contributor to the US’s interests.

The minister claimed that 77% of the products that the US accessed in South African markets were done so tariff-free.

“When we talk tariffs, we are only relating to them in relation to the products that are not listed in the 77%.

“We also indicated the reality that with regards to the main products we sell into the US, these would include some of our minerals, minerals even under the reciprocal tariffs have been excluded,” he explained.

Tau said South Africa supplied 12 of the US’ priority minerals, and it was the primary supplier of nine of them.

Other trade avenues mentioned were the establishment of digital opportunities and South Africa gaining access to US liquefied natural gas.

Equity equivalent

Concerns about employment equity hampering potential US investment were addressed, with Tau stating that at least 10 US companies were benefiting from an existing accommodation.

Tau explained that South Africa had a programme to help bridge employment equity gaps called the Equity Equivalent Programmes for Multinationals.

These equity equivalent programmes allow foreign companies to offset their black economic empowerment requirements against skills development or socio-economic programmes.

“They are participating in a manner that enables supply and enterprise development. So, they are building the capacity of their own suppliers in our region, which increases their ability to produce in the country,” stated Tau.

This may open the door for any of Elon Musk’s enterprises, with the minister saying Ramaphosa had already met with the South African-born businessman last year.

“We are continuing to pursue Tesla with regards to investing in South Africa as part of the original equipment manufacturers, and we intend to pursue that discussion with them,” Tau concluded.

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