‘Nothing new’ – Experts say the US is ‘merely trying to bully South Africa’

A failure to renew South Africa’s participation in the African Growth and Opportunity Act (Agoa) by the US government could have serious repercussions for the economy, according to an economics expert.

However, political and diplomatic analysts say Washington is trying to bully SA over its nonaligned stand on Russia and the Ukraine war.

Agoa

University of Johannesburg associate economics professor Peter Baur warned that losing Agoa may translate into “quite a hard-hitting economic impact”.

“SA exports approximately $9.8 billion (about R189.3 billion) – translating to almost $2 billion in trade with the US. With the low economic growth of under 1%, it can translate into quite a hard-hitting economic impact, especially on the many SA businesses who rely on this trade relationship.

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“Through the multiplier effect, this bodes badly for job creation, persistent unemployment, and high inequality.”

He added that he was concerned about “the possible contagion effect as other countries across the world, especially members of the EU may follow a similar line.

“We risk even greater isolation – or worse – possible sanctions.”

National Association of Automobile Manufacturers of South Africa (Naamsa) chief executive Mike Mabasa said he and Naamsa members were discussing the impact on the local vehicle manufacturing industry should the US remove South Africa from Agoa.

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Enacted in 2000, Agoa has significantly enhanced duty-free market access and exports to the US for qualifying sub-Saharan African countries.

US’s threats ‘nothing new’

For independent political analyst Sandile Swana and University of SA political science Professor Dirk Kotze, the latest US claims were “nothing new”.

“The US has broken diplomatic protocols before by declaring there was a credible terrorist threat in Sandton – this, before discussing it with the South African government,” said Swana.

“Since the days of the Iraq War under Mbeki, the US has never taken cognisance of any ideas or advice put forward by SA as regards war and security. When SA opposed the invasion, it was ignored by both the US and UK – with disastrous consequences.

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“The US has threatened SA for at least seven years about removing it from Agoa. It is merely trying to bully SA.”

Said Kotze: “This came out of an engagement between a US ambassador and the SA media – not a major announcement made by the US state department, the department of defence or the White House.

“This is a matter the US embassy has been in communication with the SA government about a year ago, when the Russian ship docked at our harbour.”

Why South Africa?

Also coming to SA’s defence in a Cape Talk interview, Prof André Thomashausen, Unisa professor emeritus of international law, said: “Switzerland and Austria have observed strict neutrality and nobody has come down on them with a ton of bricks. Nobody has started devaluing their currency. So why South Africa?”