Lhe fruits are among 1,800 products from 32 African countries benefiting from tariff preferences thanks to the African Growth and Opportunity Act (Agoa). South African, Kenyan, Nigerian and Ghanaian companies benefit the most from these provisions.
Donald Trump having promised to impose customs duties of at least 10% on all imports into the United States, the renewal of Agoa – which is due to expire in 2025 – by the Republican Congress remains uncertain.
“We need this competitive advantage”, Justin Chadwick, head of the South African Citrus Growers Association (CGA), told AFP. “If South Africa were excluded from Agoa, thousands of rural jobs could be affected and more than a billion rand (EUR 52.3 million) in export earnings could be lost”, he believes.
A producer located in the Eastern Cape province judges that if Agoa was not renewed, it would “would kill” his activity. This South African company, wishing to remain anonymous, says it employs more than 3,000 people and exports an average of 350 containers of sorbets per year to the United States.
Automotive is another sector that could be affected by the abandonment of Agoa, although some companies are betting that American consumers will accept higher prices.
“I don’t foresee any major changes in Americans’ purchasing habits when it comes to our products.”, says Ken Manners, managing director of SP Metal Forgings Group, a South African company exporting automobile parts to the United States. Even if customs duties were imposed, “this would not make much difference to our ability to remain a competitive supplier”, he assures. “The type of products we supply in the United States are very difficult to find elsewhere.”
Whether Agoa is renewed or not, its impact is limited nationally in South Africa, analysts say. “We’re not even talking about one percent” of the South African economy concerned, judges economist Dawie Roodt, based in Johannesburg. But “in an environment where the economy grows practically not or very little, everything counts and adds up”, he observes.
“Trump and his economic policies are unpredictable, volatile and erratic. We don’t know how far he will go”, notes Ronak Gopaldas of London-based consultancy Signal Risk. “An effective strategy is to expect the worst and hope for the best”, he summarizes.
Kenyan and Ghanaian companies also benefit from Agoa, particularly in the textile industry.
Mukhisa Kituyi, a Kenyan politician who served as secretary-general of the United Nations Conference on Trade and Development, believes that the next US administration could lean towards a renegotiation of AGOA rather than a withdrawal. “What America wants (…) is to tighten what it calls third country of origin rules”, MKituyi told AFP. This would, for example, prevent companies from importing textiles from China or India, sewing them in Africa, and then selling them in the United States as African clothing.
Another question mark concerns mineral exports from the Democratic Republic of Congo, Zambia and Angola. Although these products are not eligible for Agoa, Central African countries have received special attention and investment under the presidency of Joe Biden.
“Will these relationships continue or will we see a step backwards, a radical overhaul of some of the advances made?”, asked Ronak Gopaldas. Trumpwill probably ignore Africa”, according to Dawie Roodt, unless countries “do not attract his attention for good or bad reasons”.
Geopolitical positions could be a determining and damaging factor for a number of African governments that have shown support for Russia and China or criticized Israel.
South Africa, in particular with its proceedings brought against Israel before the International Court of Justice (ICJ) for genocide, will work “on a thread”, Ronak Gopaldas’s analysis, especially “whether the United States makes a clarification as with us or against us”.
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