Agoa extension puts SA in diplomatic crosshairs as trade benefits hang in the balance

Banele Ginindza

South Africa is walking a diplomatic and economic tightrope as the proposed extension of the African Growth and Opportunity Act (Agoa) moves from the US House of Representatives to the Senate, with analysts warning that the country’s full participation in the trade pact is far from guaranteed.

The US House this week overwhelmingly approved a bill extending Agoa to 2028, a move welcomed by African exporters but clouded by lingering political tensions between Washington and Pretoria.

At the heart of the uncertainty is South Africa’s insistence on maintaining an independent foreign policy, even as it faces growing pressure from the US over its geopolitical positioning and strategic partnerships.

Relations have been strained by South Africa’s engagement with BRICS partners, including recent naval exercises involving South Africa, China and other BRICS countries, which some in the US have interpreted as provocative.

These concerns have resurfaced as the Agoa extension heads to the Senate, where Republicans hold the majority.

International relations expert, Dr Oscar van Heerden, on Tuesday said the House vote sent a clear signal of broad support for Agoa’s renewal, but warned that the Senate process could be more politically fraught for South Africa.

“There are some senators who have concerns about South Africa. I suspect, given the fact that the Republicans are in the majority in the Senate, they might approve it without South Africa being part of it,” he said.

Van Heerden cautioned strongly against allowing US pressure to dictate South Africa’s foreign policy choices.

“We also need to be very clear about the fact that we cannot be held at ransom diplomatically, because this is at the heart of the issue,” he said.

“The United States wants to dictate how South Africa should conduct its foreign policy, who our international partners should be, with whom we should have friendly relations, and with whom we should trade. Otherwise, supposedly, they will take punitive action against us.”

The geopolitical backdrop has been further complicated by US President Donald Trump’s announcement on Tuesday of additional 25% tariffs on countries dealing with Iran, with whom Washington is currently at odds.

While South Africa’s trade with Iran is minimal, the development has added to concerns about the broader direction of US trade policy.

Latest trade data shows South Africa exported goods worth just R2.5 million to Iran in October last year, down 16% from R3.0 million in October 2024, underlining the limited direct exposure but heightened symbolic sensitivity.

From an economic perspective, the uncertainty around Agoa is already being felt across key sectors.

Dr Ernst van Biljon, head lecturer in supply chain management at the IMM Graduate School, said Agoa’s scheduled expiry in September 2025 has injected significant uncertainty into export-oriented industries, particularly automotive manufacturing and agriculture.

He said looking ahead, even if Agoa is extended, it is unlikely to return in its original, long-term form. He said from a supply chain management perspective, the implications are immediate and material.

Van Biljon said preferential trade agreements are not just diplomatic instruments but they underpin long-term sourcing strategies, capital investment decisions and network design.

He said the lack of clarity around Agoa is already disrupting cost structures, raising landed prices through the reintroduction of tariffs, and weakening the predictability global buyers need before committing to African suppliers.

"Strategically, Agoa’s fragility reinforces the need for South Africa to accelerate trade diversification. Deepening integration within the African Continental Free Trade Area (AfCFTA), strengthening BRICS trade linkages, and expanding South–South supply chain partnerships are no longer optional - they are risk mitigation imperatives.

A resilient trade strategy must be built on multiple market access pathways rather than reliance on a single preferential regime.

Matthew Parks, parliamentary spokesperson for Cosatu, said Agoa has helped boost trade and investment between the United States and Africa, and in particular South Africa.

"More discussions would need to take place in terms of how the new tariff regime would co-exist with an extension of Agoa. It’s important that South Africa have mutually beneficial and respectful relations with the US and that trade and investment between them be increased," Parks said.

Trade union Solidarity said the unions had on Tuesday submitted a formal request to the White House to allow South Africa to participate in Agoa under certain conditions.

Solidarity spokesperson, Jaco Kleynhan, they have also called on the government to deal with the dispute with the US more responsibly and to stop attacking and provoking the Trump administration.

 "The government must now act with greater wisdom." Kleynhans said.

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