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2023-05-03 at 15:24 #402915Nat QuinnKeymaster
Last week a high-powered official South African delegation rushed to Washington to try and persuade the US that we have not gone over to the other side. With South Africa leaning toward Russia and China, its future eligibility for trade benefits under the Africa Growth and Opportunity Act (AGOA) is now uncertain, if not about to end.
If South Africa’s AGOA benefits are cancelled, that will mark the end of an era in which the country had easy foreign policy options.
AGOA, which grants duty- and quota-free access to the US market for eligible African countries for a range of products, is up for renewal in two years’ time. But should President Joe Biden’s administration wish to send a message, it could rescind South Africa’s AGOA benefits at any time.
Our exports under AGOA were valued at R2.7 billion in 2021 and amounted to about seven percent of South Africa’s total exports to the US. But apart from the loss of these benefits, what would really hurt South Africa if it were kicked out of AGOA is that our isolation would rise. With 34 countries eligible for benefits under AGOA, we would be out of a club to which most African countries belong. This would not look good, coming so soon after our greylisting earlier this year by the international Financial Action Task Force, due to worries about crime and terrorist financing in South Africa.
South African exports to the US have more than doubled, to R14.6 billion since 2019, helped by a combination of higher commodity prices and increased demand. Last year South Africa had a surplus of $8 billion in its trade with the US. South Africa’s exports to China, the European Union, and Japan are larger, but the basic calculation that South Africa should be making in its foreign policy is that our trade with the West will continue to outstrip that with other countries for many years.
If this country had a better investment climate, far greater advantage might have been taken of the enhanced access to the US market. And had South Africa played its cards right, we could have gained manufacturing investment due to the rising US anxiety over its reliance on China.
Another fundamental calculation in our relationship with the US, is that we have been a large recipient of the US President’s Emergency Plan for AIDS Relief (PEPFAR). This contributed to HIV prevention, care, and treatment. While the US may drop South Africa from AGOA, it is unlikely to cut PEPFAR funding. The US will be reluctant to overplay its hand with a tough policy toward South Africa, as this might finally push Pretoria into the arms of Russia and China.
South Africa is of growing concern to the US for a number of reasons, some of which might be used to rescind our AGOA membership. Governance and corruption problems and barriers to investment might be used as a reason to kick South Africa out of AGOA.
There is also pressure on the Biden administration from a resolution introduced in the House of Representatives in February calling on South Africa to stop favouring Russia and China. The resolution called on South Africa to cancel naval manoeuvres with China and Russia, hold military exercises with the US, publicly oppose the Russian invasion of Ukraine, and reduce its reliance on Chinese IT companies. It also called on the Biden administration to review the US-South Africa relationship, including the benefits of our inclusion in AGOA.
For some time, South Africa has distanced itself from the US. South Africa increasingly sees the Brazil, South Africa, India, China, South Africa group – BRICS – as its foreign policy lodestar. Of great prestige value to Pretoria is that it will host a BRICS Summit in August in Durban. But having Russian President Vladimir Putin there is virtually impossible, as South Africa would have to arrest him to fulfil its legal obligations to the International Criminal Court.
Clearly South Africa has been looking for a solution to this problem. Last week, President Cyril Ramaphosa said South Africa would withdraw from the Court. But a few hours later, he was forced to backtrack and said the country would remain a signatory. A withdrawal from the Court was just too obvious, and a desperate ruse to protect Putin and the Summit. It could have caused serious diplomatic fallout for it even to have been considered.
A solution of sorts has emerged – the Sunday Times has reported that Putin will attend the BRICS Summit virtually. And City Press reported that South Africa will soon pass an act saying that visiting heads of state would not be arrested in South Africa. That is unlikely to hold up before our own Constitutional Court. What about equality before the law?
For the time being, this may protect South Africa’s AGOA membership. An AGOA Summit is to be held in September, a month after Putin’s scheduled visit. The sight of President Cyril Ramaphosa welcoming Putin would mean that the US would have to reschedule and relocate the AGOA summit.
But in a bizarre turn of events, South Africa’s membership of the ICC could be saving it from annoying the US with a welcome to Putin. The US is not even a member of the ICC.
Putin’s absence at the BRICS Summit will be a big let-down for the group and its big ambitions, and for South Africa as the host. It shows that BRICS cannot always hold a summit with all the family members present.
While a virtual meeting will allow Putin to engage in the meeting of the BRICS leaders as a group, summits are also about holding one-on-one talks and developing personal rapport. That is often the real reason why leaders attend, and these one-on-ones help in exploring new initiatives and dealing with unfinished business. The big symbol of a summit is what diplomats call the family photo. The photo is to show that all leaders got on famously and will be part of an album to show continuity. Much will be missing from the BRICS 2023 Summit in Durban.
South Africa’s foreign policy options are fast closing. It no longer has the choice of both saying yes to Russia and China and saying no to America. During the Mandela era and beyond, South Africa was given a free pass by the US even with its close ties with countries like Cuba, Libya, and Venezuela and its policy of quiet diplomacy toward Zimbabwe.
South African membership of AGOA was a case of indulgence by Washington. The access under AGOA was always meant to be targeted at low-income countries. South Africa is a middle-income country and there never has been a compelling case for this sort of benefit. It was the Mandela legacy and the hope in the US that the ANC would see the benefits of close ties with Washington, that gave us the benefit of the doubt.
That meant South Africa had easy diplomatic solutions. Now, as in mathematics, some problems are simply intractable. That means South Africa will have to pay the price in real benefits and prestige.
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