How Agoa renewal impacts the SA-US economic relationship

Source: Trevor Hill/Audi South Africa.

Agoa provides eligible sub-Saharan African countries with duty-free access to the US market.

“The renewal of Agoa will complement and support the implementation of the Africa Continental Free Trade Area and creation of regional value chains, as well as support American businesses that depend on inputs and products imported into the US market under Agoa.

“This will provide certainty and predictability for African and American businesses that rely on the programme,” the department said.

The US is the third largest export destination for South African goods and remains one of South Africa’s most important trade partners.

In 2024, SA-US total bilateral trade stood at some $15bn, with South Africa’s exports totalling $8bn and imports standing at $7bn, resulting in a “trade surplus of $1bn”.

Trade ties endure

“Minister Tau emphasised that South Africa values its longstanding trade and investment relationship with the US…[which is] a critical partner in driving mutually beneficial economic growth, industrialisation, and job creation.

“Agoa has been important in this partnership for over two decades, supporting thousands of jobs in both countries and contributing to stable supply chains across key sectors, notably in automotive, shipbuilding, agriculture, chemicals, and apparel,” the DTIC highlighted.

Over the past year, the relationship between the two countries has come under increasing strain; however, the department emphasised that South Africa remains committed to “mature engagement regarding matters of mutual concern, ensuring that we are able to reach our shared economic goals”.

“SA…is the largest sub-Saharan African importer of goods from the US and the biggest source of foreign direct investment to the US from the African continent and a crucial supplier of raw materials to many US supply chains.

“South Africa and the United States continue to engage with each other in the negotiation of an Agreement on Reciprocal Tariffs aimed at promoting mutually beneficial trade and investment relations and address trade barriers that affect bilateral trade,” the department said.