TLU SA warns that the US government’s decision to terminate South Africa’s preferential access under the African Growth and Opportunity Act (AGOA) could have far-reaching consequences for the country’s economy, agriculture and employment.
The loss of preferential access to the US market will seriously undermine the competitiveness of South African exporters. Products previously exported under AGOA at more favourable tariff rates could now become more expensive and less competitive. This places existing export markets in the US, as well as South African businesses and jobs, under pressure.
According to Bennie van Zyl, General Manager of TLU SA, the automotive industry will be among those affected, but agricultural producers and exporters will also have to deal with the consequences.
“What does the ANC government not understand? You cannot repeatedly alienate an important trading partner through your policy choices and actions and then expect there to be no consequences. The US government has made its concerns clear. Yet the government continues to pursue policies and positions that undermine South Africa’s international relations and economic interests,” says Van Zyl.
The US government has, among other things, raised concerns about South Africa’s trade and investment barriers, corruption, and issues relating to national security and foreign policy. Tensions between the two countries have been further fuelled by South Africa’s international actions, including its case against Israel at the International Court of Justice.
TLU SA believes that the handling of the five requests made by the US government highlights the differences between South Africa and the United States. While President Cyril Ramaphosa’s special adviser, Alistair Ruiters, maintains that two of the requests have been addressed and that discussions are ongoing regarding the remaining three, US Ambassador Leo Brent Bozell believes that South Africa has not responded adequately to Washington’s requests. “This difference in approach places further strain on a trading relationship that is already under considerable pressure,” says Van Zyl.
TLU SA believes that the ANC government’s ideological approach is placing South Africa’s economic interests second. Investor confidence, policy certainty and a safe operating environment for businesses are essential for economic growth. Yet the government’s actions increasingly create the impression that political ideology, the retention of power and self-enrichment have become more important than the prosperity of South Africans.
“The ANC cannot continue to damage the country’s economy through poor policy choices and irresponsible actions without being held accountable. The consequences of decisions made by politicians and diplomats are borne by South Africa, not by them. These decisions affect the farmer who exports, the business that creates jobs and the employee who depends on that job. The ANC must be held accountable for the consequences of its decisions, but it is ordinary South Africans who ultimately pay the price,” says Van Zyl.
According to TLU SA, the government’s reference to further diplomatic engagement and the 60-day notification period must not become an excuse for further delays. The question is whether the government is prepared to urgently and practically address the real issues undermining the trading relationship, or whether it will simply continue with the same approach.
For agriculture, the challenge is now twofold: South Africa must restore its existing trade relationships where possible, while urgently developing alternative export markets. Market diversification is essential, but it cannot happen overnight and does not replace the value of established trading relationships.
“The question South Africans should be asking is simple: Whose interests does the ANC serve? A government’s first responsibility is to protect the country’s people, economy and future. When political ideology and self-interest take precedence over the national interest, it is not ANC leaders who pay the price first. It is the people of South Africa,” concludes Van Zyl.
