Africa commerce deal AGOA key for some South African exports
20 February 2025
3 minute learn
Donald Trump’s axing of assist to South Africa, in response to land reform insurance policies he says will hurt its white minority, has raised fears a commerce deal could also be subsequent, although any such transfer would harm the identical farmers the US president says he desires to assist, reported Reuters.Â
Below the Africa Development and Alternatives Act, South Africa will get tariff-free quotas on agricultural exports together with wine, citrus, soybeans, sugar cane and beef. The Act makes up a few quarter of its $15 billion annual commerce with america. That compares with underneath $440 million in U.S. assist, in 2023.
“It isn’t clear whether or not the exporters are Black or white; we do not file such knowledge,” mentioned Wandile Sihlobo, chief economist of the Agricultural Enterprise Chamber of South Africa, however solely a tenth of farm output is from Black farmers.
“Nearly all of white farmers (are) doubtless have a big publicity into the US market,” he mentioned.
Sihlobo mentioned produce shipped to america makes up 4% of agricultural exports, equal to about $450 million a yr, in contrast with 19% for the European Union and 38% to the remainder of Africa.
However some producers, like these for citrus fruit and wine, are extra uncovered – the previous made $134 million in 2022, 7% of the nation’s complete, whereas the U.S. is its fourth largest wine market, Sihlobo mentioned.
“It isn’t industry-ending … nevertheless it’s very unlucky,” mentioned Justin Chadwick, Citrus Growers Affiliation president, estimating US-bound exports at 120,000 tonnes.
“We (would have) … to seek out one other dwelling for that fruit … and our different markets are fairly full.”
‘Unwise’
The Africa Development and Alternatives Act (AGOA) is up for evaluation in September. Some Republicans need to punish South Africa for land reform, its genocide case in opposition to Israel and different actions corresponding to naval workout routines with Russia and China.
The US State Division didn’t reply to a request for remark.
“We urge you to revoke South Africa’s desire advantages, underneath the Act, 4 congressmen wrote to Trump on Feb. 11, CNBC information reported.
“There’s an actual probability that South Africa just isn’t going to be included in a renewed AGOA,” Chatham Home senior analysis fellow Chris Vandome, mentioned. “Its place is actually fragile”.
Trump singled out a regulation that President Cyril Ramaphosa signed final month enabling land expropriation – in uncommon circumstances with out compensation – after a long time of voluntary purchases barely dented inequalities between a white minority who personal 75% of freehold land and majority Blacks with 4%.
Some farmers say the regulation violates property rights. Teams defending Afrikaners, descendents of Dutch settlers who make up the biggest white ethnic group and personal a lot of privately held land, have lobbied Republican politicians for years.
“It was unwise. They’re taking pictures themselves within the foot,” International Minister Ronald Lamola instructed Reuters in an interview on Monday. “If AGOA is reduce, it is a slicing of white farmers.”
However Ernst Roets, then-lobbyist for Afrikaner group Afriforum, who travelled to the States in 2018 and introduced the land challenge to Fox Information and a few Republican officers – the yr Trump first took an curiosity in it – mentioned he had “no regrets.”
“We’re hoping for strain on the South African authorities to rethink its harmful coverage concepts,” Roets, now a part of a special foyer group, mentioned.
Not all agribusiness will lose if the Act will get chopped.
Poultry farmers struggling to “compete with dumping” of subsidised USS hen imports underneath the Act would profit, mentioned Marthinus Stander, a board member of the South African Poultry Affiliation.
