22/10/2023 | By Busiswe Mavuso
I am relieved that early next month we are hosting the AGOA Private Sector Forum. Several American lawmakers had called for the Forum to be moved elsewhere. They have also questioned our preferential trade terms with the United States under the African Growth and Opportunity Act, given that such preferential access to the US markets is open only to African countries that do not threaten American security interests. But the Forum provides an opportunity for us in South African business to show how important the business relationships between the two countries are.
Understandably, the Americans have watched with alarm as we’ve conducted joint naval exercises with the Russian and Chinese militaries, allowed a sanctioned Russian ship to land at Simon’s Town and then a sanctioned aircraft land at Waterkloof. Along with that our officials have made contradictory statements about our position on Russia, while our president met with Vladimir Putin in St Petersburg in July. The anger was palpable in a House of Representatives hearing on the South Africa-United States bilateral relationship last month.
To try and repair the relationship, several delegations have travelled to Washington, including political and business leaders, to engage the Americans about their concerns. There is much we have in common with the US, especially from a private sector perspective. We are both constitutional democracies who believe in the rule of law. Our businesses work in competitive market economies. The relationship between the two countries’ private sectors is deep – some 600 American companies operate here and the US is a major export market for our goods and services, one that consistently shows a large trade surplus in our favour. It is an important market for our manufactured goods like vehicles, as well as agricultural exports like citrus. AGOA eligibility is key to the export of those goods among others.
Clearly these efforts have had some success, given that the Summit is going ahead. I take it as a positive indicator that our relationship is healing, helped by the inquiry into the Lady R matter which found no evidence the ship had taken on board arms destined for Russia’s war effort. There has also been better communication of South Africa’s non-aligned position, one that aptly recognises the importance of the West as an established market for our goods, even while the East represents a growing set of new markets with which we must also engage.
South African business can fully engage with the Summit, and I suggest BLSA members do so. The US side of the engagement is being led by the Corporate Council on Africa, which consists of most large US businesses that are active on the continent. The hosting is being coordinated by the Department of Trade, Industry and Competition, in collaboration with BLSA, BUSA and the American Chamber of Commerce. The Forum is being held under the theme “Partnering to build a resilient, sustainable, and inclusive AGOA to support economic development, industrialisation and quality job creation.” This clearly resonates, given that the US import basket has high value added, supporting deep supply chains that create extensive employment in our economy.
The Forum will draw together 450 representatives from AGOA eligible countries across the continent, but the fact that it is being hosted here gives South Africa a particular opportunity to advance our relationship with the US. We should demonstrate how AGOA benefits the US economy, providing inputs to US supply chains and high-quality goods, from vehicles to wines, for US consumers. This relationship is vastly more important to us in trade volumes than our relationship with Russia. From tourism to support for our film industry, the US provides a critical market. AGOA helps protect the close relationship between our private sectors. Putting aside our foreign policy missteps, the relationship between our two business sectors is important to both and we must nurture it.
BLSA is a business organisation that believes in South Africa’s future and shares the values set out in the Constitution. BLSA is committed to playing its part in creating a South Africa of increasing prosperity for all by harnessing the resources and capabilities of business in partnership with government and civil society to deliver economic growth, transformation and inclusion.
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