South African envoy sees positive signs in key US trade talks

South Africa is likely to maintain preferential trade access to the US market despite strained relations between the nations, according to an executive who represented the country at a forum in Washington this week. 

“The signals were positive,” Stavros Nicolaou, the head of strategic trade at Aspen Pharmacare Holdings Ltd., said in an interview Friday. “The Americans understand South Africa has got to keep its sovereignty and independence, but there’s also a partnership that needs to be nurtured. It’s a longstanding partnership where both sides gain.”

While President Joe Biden’s administration has sought to build ties in South Africa to counter Russia and China, US lawmakers have been highly critical of the country after it took Israel to the International Court of Justice over accusations of genocide amid the war in Gaza. As a result, the US House last month passed a key annual defense policy bill with an amendment calling for a review of South Africa’s national security risks to the US. The bill still needs approval from the Senate and the White House.

If passed, it could complicate the status of thousands of South African products. They enter the world’s biggest market duty free under the African Growth and Opportunity Act, and the so-called Generalized System of Preferences. 

South Africa shipped goods worth more than $14 billion to the US in 2022, with about 25% cleared under the two accords, government data show.

The US Trade Representative didn’t respond to requests seeking comment outside office hours. USTR officials will host a briefing on Monday.

The US is South Africa’s second-largest trading partner after China. Maintaining favorable commerce ties between the two countries is key to the newly formed South African coalition government’s efforts to bolster an economy that’s barely grown over the past decade.

The country’s Government of National Unity and commerce delegation led by Parks Tau, the new minister of trade, industry and competition, were well received at an AGOA forum, according to Nicolaou, who is also a board member of lobby group Business Unity South Africa. “I detected an improved tone from delegates vis-à-vis last year,” he said. 

AGOA is set to expire in 2025. While senators, in April, introduced a bill to extend the trade program with about 40 sub-Saharan African nations until 2041, beneficiaries of the agreement are still awaiting formal guidance about its future. 

“I call on Congress to quickly reauthorize and modernize this landmark Act,” Biden said in a statement Tuesday on the eve of the forum. “As I’ve said before, America is all in on Africa.”

African Trade Ministers separately called for a quick renewal of the agreement for at least 16 years with minimal changes, to stabilize commerce and investment relations and preserve regional value chains, according to an African Union statement issued via WhatsApp Thursday.