Key Takeaways
- The US’s retreat from free trade has led South Africa to seek new trade partners, with the Brics group being a crucial part of the government’s efforts to help farmers avoid losses.
- The expiration of the African Growth & Opportunity Act (Agoa) and Trump’s tariffs have increased uncertainty for South Africa’s agricultural sector, while the mining industry benefits from US tariff exceptions.
- China has offered duty-free access to all African nations, positioning itself as the continent’s most welcoming major partner, and has signed a landmark trade agreement with South Africa to grant access for various fruits.
- South Africa is deepening trade ties with the Brics network, including China, Indonesia, Malaysia, and Vietnam, to diversify export markets and reduce dependence on the West.
- The government of national unity (GNU) appears committed to implementing a trade diversification strategy to boost South Africa’s agricultural exports and maintain economic stability.
Introduction to the US’s Protectionist Policies
The Trump administration’s protectionist policies have severely disrupted the global trade order, which has driven remarkable economic growth since the end of World War 2. For South Africa and many other African countries, this policy shift from Washington could prove particularly economically challenging. The African Growth & Opportunity Act (Agoa) had underpinned the post-apartheid relationship between Pretoria and Washington, opening the US market to South African goods on preferential terms. However, the expiration of Agoa and the introduction of Trump’s tariffs have increased uncertainty for South Africa’s agricultural sector.
The Impact of Agoa’s Expiration
Agoa had allowed about 20% of South Africa’s exports to enter the US duty-free, playing an essential role in sustaining the nation’s manufacturing base and supporting thousands of jobs in the agricultural sector. The program had also enabled smaller African economies, such as Eswatini, Lesotho, and Madagascar, to develop competitive textile industries that could rival Chinese suppliers. The expiration of Agoa has left many African nations searching for new trade partners, with the Brics group being a crucial part of the government’s efforts to help farmers avoid losses. The US Senate has introduced a bill to extend Agoa for two years, but South Africa is explicitly excluded as a beneficiary.
China’s Growing Influence
While the US tears up agreements, China is signing deals. Beijing has announced duty-free access for all African nations, positioning itself as the continent’s most welcoming major partner. For South Africa, this policy shift arrives at a crucial moment, with China offering a lifeline to SA farmers by granting access for prunes, plums, peaches, apricots, and cherries. The breakthrough stems from a landmark trade agreement signed in Shanghai between South African agriculture minister John Steenhuisen and China’s general administration of customs minister, Sun Meijun. This agreement marks the first time China has approved multiple fruit types from a single country under one agreement.
South Africa’s Diversification Strategy
South Africa is deepening trade ties with the Brics network, including China, Indonesia, Malaysia, and Vietnam, to diversify export markets and reduce dependence on the West. President Cyril Ramaphosa’s recent visit to Malaysia highlighted the government’s post-Agoa strategy of broadening export markets and reducing dependence on the West. Earlier this year, Steenhuisen and deputy president Paul Mashatile jointly visited Japan to promote citrus, avocados, and wine. Attention has now turned to Brics member Indonesia and Brics partners Malaysia and Vietnam as new frontiers for trade and investment. These deals are expected to boost agricultural export revenue, diversify markets, and create greater resilience against external economic shocks.
The Future of South Africa’s Trade Relations
The trade agreements and engagements suggest Brics could prove a crucial lifeline for SA agricultural producers facing increased uncertainty from Trump’s tariffs and the expiration of Agoa. South Africa appears intent on building closer ties with its Brics partners in Asia, with recent trade agreements suggesting the GNU is fully aligned in the implementation of this trade diversification strategy to boost South Africa’s agricultural exports. As the US continues to pursue protectionist policies, South Africa’s ability to diversify its trade relations and reduce its dependence on the West will be crucial to maintaining economic stability and promoting growth. The government’s commitment to implementing a trade diversification strategy and deepening ties with the Brics network is a positive step towards achieving this goal.
