SA and US flags around the Union Buildings.
Image: GCIS / File
Repairing the fractured relationship between South Africa and the US hinges on balanced trade, according to business and labour leaders who met with American politicians in Washington.
That would mean narrowing South Africa’s trade surplus with the US of more than $4 billion (R72bn), mainly from its exports of cars and agricultural products, said Johann Kotze, the CEO of the country’s biggest farm lobby. Inclusion in the African Growth and Opportunity Act - which allows duty-free access for many goods into the world’s largest market - may end, he said.
“There was a sense that it’s freebie and there’s not something back for America,” Kotze, the head of AgriSA, said of the perception of Agoa by US senators and members of Congress that the group met. “Reciprocal trade is for America a big thing.”
Kotze declined to identify which US politicians the group met, other than to say they were from both the Republican and Democratic parties.
A political spat has complicated South Africa’s $23bn trade relationship with the US, its biggest commercial partner after China. US President Donald Trump has accused South Africa of seizing privately owned land from Whites, even though the government hasn’t confiscated any since apartheid ended in 1994. He has offered members of the Afrikaner ethnic minority refugee status.
The US leader also canceled aid to South Africa, crippling programs key to the fight against HIV/AIDS and expelled its ambassador to Washington after he described Trump and his supporters as a “supremacist” movement.
“We wanted to go to the US for a temperature check to see what the points of irritation are” and whether there is a chance of a reset, said Matthew Parks, the parliamentary coordinator for Cosatu and a member of the group that traveled to the US. “We need to address the political turbulence.”
The group intends to brief the government about the talks, Parks said.
Other members of the group included Neal Froneman, the CEO of precious-metals miner Sibanye Stillwater, and Adrian Enthoven, the chairman of Hollard Insurance.
The US could either extend, change or scrap the Agoa agreement - which benefits many African countries - when it expires in September.
“The top administration are very protective regarding their own economy,” Kotze said of the US. “Trade is a big tool for them.”
South Africa could possibly address US trade concerns by encouraging purchases of more American agricultural technology and equipment, he said. It could also enable more US access to its critical minerals, he added.
South Africa’s Department of International Relations and Cooperation on Tuesday said its director general led a separate delegation that met with US officials. President Cyril Ramaphosa has previously said he is considering sending envoys to the US to try to improve ties.
BLOOMBERG