The Congress of South African Trade Unions (COSATU) has expressed concern over the United States' decision to remove South Africa from the African Growth and Opportunity Act (AGOA), a trade program that provides eligible African countries with preferential access to the US market. COSATU parliamentary coordinator Matthew Parks stated that the program has played a crucial role in boosting South African exports to the US, including vehicle exports that comprise components manufactured in neighboring countries. The loss of AGOA access may result in significant job losses in the agricultural and manufacturing sectors.
According to Parks, AGOA has benefited the US through the supply of African goods, including critical minerals, while creating an estimated 200,000 direct jobs in the US. He emphasized that the US decision to terminate South Africa's participation in AGOA, set to take effect on January 1, 2027, represents a major setback for Pretoria's efforts to retain preferential access to the US market. The decision was made following an annual review of sub-Saharan African countries' eligibility for AGOA, with US Trade Representative Jamieson Greer citing barriers to US trade and investment, as well as practices considered threats to US national security and foreign policy interests.
COSATU has called on the South African government to utilize the 60-day period before the proposed termination takes effect to negotiate solutions that would protect the country's economy and jobs. Parks urged the government to prioritize the interests of South Africans and respect the country's transformation journey during negotiations with the US. He also emphasized the need for support measures to be introduced for workers, businesses, industries, and communities at risk, including subsidies, incentives, tax rebates, and holidays.
Parks criticized lobby groups AfriForum and Solidarity, accusing them of contributing to strained relations between South Africa and the US through their lobbying efforts. He argued that their efforts to undermine the country's international standing have resulted in the loss of AGOA access, which will negatively impact thousands of workers and farmers. Parks called on AfriForum and Solidarity to explain the consequences of their actions to those who will be affected.
Minister of Trade, Industry and Competition Parks Tau stated that the US decision to move towards excluding South Africa from AGOA does not define the broader relationship between the two countries. However, he warned that finding a solution will depend on both parties' willingness to engage. Tau described the US as an important trade and investment partner and emphasized South Africa's commitment to pursuing a mutually beneficial relationship.
COSATU has vowed to continue working with the government and industry to ensure support measures are introduced for those affected by the loss of AGOA access. The federation will also engage with the US labor movement to protect workers' jobs. Parks expressed confidence that South Africa will navigate these challenging times, citing the country's resilience in the face of adversity.
The US decision to remove South Africa from AGOA has significant implications for the country's economy, which is grappling with a high unemployment rate of 43.8% and weak economic growth. The government faces a pressing need to mitigate the impact of the loss of AGOA access and negotiate a favorable set of solutions to avert a potential blow to the economy and jobs.
Key points
- COSATU blames AfriForum and Solidarity for contributing to the US decision to remove South Africa from AGOA.
- The loss of AGOA access may result in significant job losses in the agricultural and manufacturing sectors.
- The South African government has been urged to negotiate with the US to find solutions that would protect the country's economy and jobs.
