South African lobby group makes urgent appeal to Trump to let businesses keep US trade benefits even if countries lose AGOA access

A South African business organisation has proposed a major overhaul of the United States’ flagship African trade programme, seeking to protect qualifying companies from losing preferential market access because of disputes involving their national governments.

• A South African business group, Sakeliga, has proposed changes to the US AGOA program to let individual companies or regions retain trade benefits, even if their national governments lose eligibility.
• The proposal comes amid US threats to impose tariffs on goods from several African countries, including South Africa, due to concerns about forced labour.
• Currently, AGOA eligibility is decided at the national level, which can punish businesses for government policies beyond their control.
• Sakeliga's plan suggests 'subnational differentiation,' allowing firms, provinces, or special zones to qualify independently by meeting US standards.

Sakeliga said the plan would allow individual companies, provinces, municipalities and special economic zones to qualify for US trade benefits even when their countries fail AGOA’s national eligibility requirements.

The proposal would mark a major departure from the programme’s current structure, under which Washington grants or withdraws benefits at country level.

According to BusinessTech, Sakeliga submitted the plan to the Office of the United States Trade Representative on May 15 as Washington reviews the African Growth and Opportunity Act, known as AGOA.

The Pretoria-based lobby group, founded in 2011 and rooted in South Africa’s Afrikaans-speaking business community, is led by Piet le Roux, with Russell Lamberti as executive director.

US Tariff Threat Raises Stakes

The proposal has gained urgency after the US trade agency recommended additional tariffs on imports from 60 economies over what it described as inadequate action against goods produced using forced labour.

Seven African countries were included in the investigations: Algeria, Angola, Egypt, Libya, Morocco, Nigeria and South Africa.

Although the US has not suspended trade with the countries, it has proposed additional duties of between 10% and 12.5% on most imports from the affected economies.

The tariffs would operate separately from AGOA and could reduce the benefits of duty-free access for African exporter.

How the AGOA Proposal Would Work

AGOA allows eligible sub-Saharan African countries to export qualifying products to the US without paying import duties.

However, eligibility is determined at national level. A country can therefore lose its benefits over concerns about governance, human rights, trade barriers or government policy.

The consequences can be severe for export-dependent businesses.

After Ethiopia lost AGOA eligibility in 2022, its industrial parks recorded an estimated $45 million in lost revenue, while 18 foreign companies withdrew and more than 11,500 jobs disappeared, according to a National Bank of Ethiopia report.

Ethiopia’s exports to the US later fell by 31.7% in 2023.

Sakeliga argues that this approach punishes businesses for decisions beyond their control.

Instead, its proposal would introduce what it calls “subnational differentiation”. This would allow individual companies, municipalities, provinces and special economic zones to qualify independently by meeting agreed standards.

Russell Lamberti, Sakeliga’s executive director, said eligibility would depend on business practices rather than ownership demographics.

“The beauty of this is that this is strictly non-racial. The requirement for these benefits is not a race requirement. It is a principle requirement,” he said.

South Africa-US Tensions Deepen

Meanwhile, South Africa faces added risks because its dispute with Washington extends beyond labour standards.

Relations between the two countries have deteriorated over Pretoria’s land policies, Black Economic Empowerment rules, ties with Iran and positions on international conflicts.

US Ambassador Leo Brent Bozell III said Washington had presented five requests to Pretoria.

They included demands that South Africa distance itself from Iran, revise empowerment policies affecting US companies, prohibit land expropriation without compensation, prioritise rural crime and condemn the “Kill the Boer” chant.

Bozell warned that Washington was running out of patience, suggesting that unresolved disputes could lead to further economic pressure.

For South Africa, losing AGOA benefits would likely affect vehicles, agriculture and manufacturing most.

A Brookings Institution estimate found that AGOA withdrawal alone could reduce the country’s gross domestic product by about 0.06%, although affected exporters and workers could face steeper losses.

Proposal faces a long road

Around 130 submissions were made during the AGOA consultation, Lamberti said, adding that Sakeliga believed its proposal was receiving serious consideration.

“We think ours is near the top of the pile,” he said.

However, he acknowledged that reforming AGOA would be a “long, slow, complex” process requiring congressional approval.