SA moves closer to trade cliff with the US

SA moves closer to trade cliff with the US

June 14, 2023

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A bipartisan group of American lawmakers have asked the US administration of President Joe Biden to punish South Africa for what it sees as the country’s support for Russia’s war in Ukraine.

This has emerged following a report in The New York Times, and comes in the wake of several recent ‘anti-US’ developments: naval exercises between South Africa, Russia, and China off the Richards Bay coast; a high-ranking military visit by SA National Defence Force generals to Moscow; the secretive docking of the sanctioned Russian vessel, Lady R, at Simon’s Town Naval Base in the Western Cape; and the subsequent controversial proclamations by US ambassador to SA, Reuben Brigety, about South Africa’s supposed support for the government of Russian President Vladimir Putin.

At the same time, the government of President Cyril Ramaphosa is trying to prevent a possible visit by Putin to South Africa in August to avoid adhering to an International Criminal Court warrant for his arrest on charges of war crimes.

According to a paper drafted by the lawmakers, it is recommended that a conference for the African Growth and Opportunity Act (Agoa) be moved to another country instead of South Africa, the designated host for the 2023 Agoa conference.

The New York Times says the request was made in a letter sent by the group of politicians last week.

Local business leaders and opposition parties such as the Democratic Alliance have warned that the potential ramifications of the ANC government’s ideological alignment with Russia could be disastrous for South African trade with the US.

At least 30% of local exports, ranging from food to furniture and automotive parts, could lose tariff-free benefits under Agoa if the Biden administration moved against the Union Buildings in Pretoria for refusing to unequivocally express its opposition to the war in Ukraine.

Ramaphosa’s government claims that it is non-aligned and is in the process of sending high-level envoys to Ukraine and Russia to lobby for a cessation of hostilities.

Actions and statements by several government ministers in South Africa have, however, made it clear that Ramaphosa’s Cabinet is unwilling to alienate Russia for the sake of US trade relations.

While trade benefits with the US through Agoa amount to tens of billions, South Africa’s trade balance with Russia is negligible.

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