Could South Africa be excluded from a potential Agoa extension?

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JIMMY MOYAHA: South Africa continues to be in a precarious position with the United States – and the latest developments stem around the Agoa [African Growth and Opportunity Act] agreement.

That agreement, of course, came to an end at the end of September this year. At that time, the US government was in shutdown and so there was no reasonable expectation that it would be extended or renegotiated.

It seems as though that is coming back into focus, and a lot of that conversation is centred around whether or not the United States would like South Africa to continue to benefit from that arrangement, or if we should have our own arrangement.

Read:
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We’re going to be taking a look at this in the context of the South Africa-US relationship with economist and founder of Pan-African Investment and Research Services, Dr Iraj Abedian. He joins me on the line now to see what we make of it.

Dr Iraj, thanks as always for the time. Lovely having you on the show. I think we’ve all reached our limit around the tensions between South Africa and the United States, particularly given that the tensions stem from issues that we have struggled to make sense of. Agoa, on the other hand, is an agreement we knew was coming to an end and needed to be discussed and reviewed.

I want to get your thoughts initially around whether or not this is still a relevant conversation for South Africa.

IRAJ ABEDIAN: Thank you very much, Jimmy. We’re talking again, and greetings to our listeners. I think it is very important that, even if it’s not Agoa as we know it, the trade relationship and the broader diplomatic relationship with the United States is of absolutely supreme importance for South Africa because the United States is the largest trading partner as regards value-added products – not minerals, not low wages, low value, and un-beneficiated basic commodities.

But when it comes to manufactured products, you notice these are by far the [most important], and of course when it comes to the financial markets, as you would know, even more important.

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So I think we need to put it in the context of the significance of United States trade and investment, within which both diplomatic and trade relationships need to be structured.

So it is important; we need to pay attention to it. There is real concern. As you said, we are all tired of it. We have been going around this rollercoaster for a while.

A lot of facts and fictions are mixed up, but the reality is that on our side we have been, in my view, a lot less proactive than we should have been and we could have been.

For example, as we speak we don’t have an ambassador in the Unites States, we don’t have a credible trade mission, et cetera – and all of these count against us.

JIMMY MOYAHA: Dr Iraj, how much of that is us being flat-footed and reactive, and how much of it is just a lack of willingness from the United States to participate in the conversation?

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We’ve heard time and time again that the United States, regardless of what they are told by South Africa, come up with their own conclusions and formulate their own opinions on what is taking place here, even without consulting South Africa on the matter.

How much of it is really up to us to influence at this stage, or what could we be doing more?

IRAJ ABEDIAN: I think the important emphasis you mentioned. At this stage, remember, this flat-footed status that we find ourselves in began not with President Trump; It began at the time of Joe Biden in the last couple of months of backfootedness already at that time. Since then we have had to move to not be behind the curve.

So the answer to your question, depending on where you’re sitting, is your perspective will differ. My view is that we were already pushed back before Trump came in.

We were betting that Trump would not come in. He did. And therefore ever since we’ve been doing catch-up work. And that’s a political issue.

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But from an economic point of view, both for the United States and for South Africa, it’s a significant trade and investment relationship.

And unfortunately we’ve – South Africans and South African economies – been caught ‘hostage’ to this cross-Atlantic ideological perspective that Trump has taken a particular position and we’re playing a different game; and therefore that gap needs to be bridged.

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We are on the back foot, so we need to put a lot more into it to catch up and find a smart solution to get back on the same page because we cannot wait for Trump, because Trump knows and his administration knows that we are on the back foot.

It’s not about some of the stuff that catches the [attention], the so-called ‘white genocide’ and all those things which are hypes. But there are real issues of a geopolitical and economic nature that we should deal with. If we don’t deal with them expeditiously we’re going to be left out again and remain on the back foot.

JIMMY MOYAHA: Dr Iraj, what do we have left in our arsenal if we are to look at the Agoa extension, as an example, in the event that we do not get afforded an extension – or we get afforded a new agreement that isn’t in South Africa’s favour necessarily, or is less lucrative than the Agoa agreement?

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We’ve already started expanding or exploring other markets, but from a trade and economic relationship perspective what else do we have left that we can bring to the table to perhaps re-balance the negotiations and perhaps give ourselves a better fighting chance at resolving this.

IRAJ ABEDIAN: I think, as I understand it, the major concern that Americans have is about what they call ‘non-trade barriers’. That is something that we have to address. America has a huge interest in, from an investment point of view and from a technological point of view, to partner with South Africa.

What we have are three things in my view.

One is from a geopolitical point of view, we need to really reset a neutral position, a non-dependent nationalistic as opposed to ideological position. We need to focus exclusively on what is good for South Africa, not what is good for other nations and other ideologies and other paradigms that may have historically been relevant but today, in the 21st century they are not.

One benefit we have, which is you’re [inaudible] politically very important.

We need to put that on the table and neutralise it, so that Americans don’t feel fear.

Secondly, we have a lot of minerals, rare minerals and the futuristic kind of input into the modern economy, all AI-driven. All of that we need to put into context.

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And thirdly, we need to look at purely investment opportunities that Americans are looking for in a whole lot of areas – not South Africa alone, but Southern Africa, and not only in the African continent.

South Africa is an important diversified industrial economy, but in the SADC even more so.

And American investments – particularly in the energy sector in Namibia, in Mozambique – these are important future prospects for making wealth, creating opportunities and positioning; from a geopolitical point of view positioning the big cars in the hub of a global unfolding economy.

Listen/read: Should SA pitch a PGM trade exchange to Trump?

Those are in our favour. We need to play it not in favour of one group as opposed to the other, but rather in terms of what’s best for the South African economy.

JIMMY MOYAHA: We need to think about what is best for the South African economy and make proactive decisions to protect that.

That is the message from the economist and founder at Pan-African Investments, Dr Iraj Abedian, who joined me to take a look at the strained relationships between South Africa and the US, and how those could potentially impact South Africa’s inclusion in the amended Agoa agreement.

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