Donald Trump’s unexpected victory yesterday in the US presidential election could jeopardise the key Africa Growth and Opportunity Act (Agoa) agreement – and general relations between South Africa and the US.
Political analysts Dr Somadoda Fikeni and Dr Tom Wheeler said Africa was not top of Trump’s agenda, something he made clear during his election campaign.
Fikeni warned that under Trump, the US may want to renegotiate Agoa or even kill it off completely. “America may go through a period of trade wars with some of its allies. It’s not a good situation we are headed for under his administration,” Fikeni said.
“What you may see is a revisit of all these trade deals, not only in Africa but in Europe as well.” According to Wheeler, Trump may want to terminate Agoa in order to strengthen his relations with America’s Western allies.
Fikeni added that South Africa may be further isolated by the Trump administration if SA appeared to side with China and Russia over issues due to their memberships of Brics.
Political analyst professor Andre Duvenhage said Trump’s victory would undoubtedly lead to a certain level of trade conflict between the US and South Africa, as Trump once said South Africa was a corrupt nation and, while he liked the late president Nelson Mandela, the country was a “crime-ridden mess waiting to explode”.
Gabriela Mackay, an analyst of politics in governance at the Institute of Race Relations, said it was difficult to say what the country could expect from Trump’s presidency because of his contradictory behaviour.
“Judging from his speech, he is going to want to stimulate the US economy and put up trade barriers,” said Mackay.
“Under his presidency, Trump is also likely to work with countries where the US can make more money.” Political analyst professor Lesiba Teffo agreed. “Trump said he would put America first. Africa is not going to feature a lot under his radar,” he said. Political analyst Daniel Silke said it would take some time before SA fully understood the implication of Trump’s victory.
“The big issue is SA’s trade relations … depending on how Trump conducts trade aspects or foreign policy could prove difficult for us to negotiate the Agoa agreement.” Trump was also more inward-looking, protective and less inclined to offer favours to the outside and developing world, said Silke.
“He would want to protect his own industries and agricultural business sectors. This might make negotiations quite tough in future.”
US exports of goods and services to South Africa supported an estimated 50 000 jobs in 2014 (latest data available) of which 30 000 were supported by goods exports and nearly 19 000 by services exports, making the US South Africa’s second-biggest partner for imports and exports, with China topping the list.
US goods and services trade with SA totalled an estimated $17.5 billion (about R237 billion) in 2015 while exports were $8.4 billion and imports $9.1 billion.
SA is currently the US’s 39th-largest goods trading partner with $13 billion in total (two-way) goods trade during 2015.
Meanwhile, the South African department of trade and industry yesterday said it cannot pre-empt what the US would do under President Donald Trump.
“As South Africa, the status quo is continuing as usual until we are notified otherwise by America,” department spokesperson Sidwell Medupe said.
According to Medupe, the Agoa agreement has been endorsed by the US Congress for the next 10 years. “So until 2025 we are still of the view that everything is intact.”