Although Agoa passed another hurdle on its path to becoming law, not everybody believes that South Africa’s name will appear in the final version.
The African Growth and Opportunity Act (Agoa), a United States (US) legislation that gives African countries access to US markets, has passed another hurdle when the US Senate passed it on Monday and sent it on to the desk of President Donald Trump, who now has to sign it into law for another year.
Although many experts believe that Agoa benefits are over for South Africa and that Trump will remove South Africa from the list, the Trade, Industry and Competition Minister Parks Tau says this extension of Agoa will provide some relief for South African products exported under the scheme.
“However, we are concerned by the short nature of the extension, and we hope the United States will use this opportunity provided by the short extension towards a programme that will provide certainty around investment and purchasing decisions. Agoa was designed to promote export diversification and encourage investment.”
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Agoa extension at time when SA is engaging with US on tariffs
The Agoa extension comes at a time when South Africa continues to engage constructively with the US on an Agreement on Reciprocal Tariffs (ART), which seeks to reduce the 30% tariff imposed by the US on goods exported from South Africa.
“We continue to engage constructively with the US administration and believe that a healthy trade relationship benefits both our countries,” Tau says.
The previous version of Agoa ended on 30 September last year.
According to Agoa’s official website, the African Growth and Opportunity Act was enacted in 2000 and has since been at the core of US economic policy and commercial engagement with Africa.
Agoa provides eligible sub-Saharan African countries with duty-free access to the US market for more than 1 800 products, in addition to the more than 5 000 products eligible for duty-free access under the Generalized System of Preferences programme.
Countries must establish, or make continual progress toward establishing, a market-based economy, the rule of law, political pluralism, and the right to due process to meet Agoa’s rigorous eligibility requirements.
In addition, countries must eliminate barriers to US trade and investment, enact policies to reduce poverty, combat corruption and protect human rights. In 2024, 32 countries were eligible for Agoa.
ALSO READ: Agoa clears hurdle, but probably not good news for SA
Dr Ernst van Biljon, head lecturer for supply chain management at the IMM Graduate School, says the possible extension of Agoa for South Africa comes at a moment of extraordinary geopolitical strain, where traditional allies are openly divided, global trade is being weaponised, and countries are forced to choose sides.
“The US’ increasingly protectionist posture, combined with its growing strategic rivalry with China, Russia, South America and Iran, places South Africa in a particularly sensitive position given its Brics membership and diplomatic relationships with these nations.
“For South Africa, Agoa has long represented preferential access to the US market, but its uncertain future now exposes deeper strategic questions about trade dependency, competitiveness and supply chain agility.
“Agoa is therefore no longer merely a trade preference. It has become entangled in a broader geopolitical contest over influence, loyalty and economic alignment, making its future far more uncertain and politically charged than at any point in its history.”
ALSO READ: South Africa still negotiating for Agoa inclusion
US Senate not the expected roadblock to Agoa
Brendon Verster, senior economist at Oxford Economics Africa, said earlier that while the US House of Representatives passed Agoa, the approval marks a step in the right direction, but the bill, in its current form, will face resistance from hardline Republicans in the Senate.
Now we know that the Senate was not the roadblock. Let’s see if the South African delegation can get it past the next hurdle: the resolute desk.
Ultimately, Verster points out, President Trump has the power to sign the bill into law, meaning that he will want to ensure that the bill speaks to his ‘America First’ agenda if it stands a chance to become law.