Parks Tau, South Africa's minister of trade, industry, and competition, has welcomed the approval of the African Growth and Opportunity Act Extension Bill by the United States House of Representatives. The bill was passed with a 340 to 54 vote and proposes the reauthorisation of AGOA for three years, until 2028, with all current beneficiary countries included.
AGOA was first enacted in 2000 and provides duty-free access to the United States market for eligible sub-Saharan African countries and products. According to Tau's department, the bill will now proceed to the United States Senate for consideration before being sent to Donald Trump for approval.
Tau noted that South Africa, together with other AGOA-eligible countries, has advocated for a longer renewal period. He said the proposed extension offers temporary relief for companies affected by tariffs imposed by the United States. "This will provide certainty and predictability for African and American businesses that rely on the program," Tau said. He added that the renewal would complement the African Continental Free Trade Area and support regional value chains, as well as U.S. businesses that rely on imports under Agoa.
Agoa has supported bilateral trade between South Africa and the United States for more than two decades, with impacts across sectors including automotive, agriculture, chemicals, and apparel. Under the program, South Africa exports automotives, ferro alloys, citrus, jewellery, nuts, chemicals, wines, engines, and turbines, as well as ships and boats. The United States is South Africa's third largest export destination after China and the European Union, accounting for about 8 per cent of total exports.
According to data from the South African Revenue Service, total bilateral trade between South Africa and the United States amounted to US$15 billion in 2024, with exports valued at US$8 billion and imports at US$7 billion, resulting in a trade surplus of US$1 billion. In the first three quarters of the previous year, South African exports to the United States reached US$5.9 billion.
Uncertainty remains as the bill moves to the Senate. The Senate Foreign Relations Committee has publicly criticised South Africa's foreign policy, suggesting that relations with U.S. adversaries could affect the process. President Trump has also stated that countries doing business with Iran could face additional tariffs of 25 per cent.
James Booth, head of revenue at Verto, said the Senate vote comes at a sensitive time for African exporters. "The House vote is a necessary milestone, but for the thousands of African SMEs that rely on these trade corridors, 'almost' is not enough," he said, pointing to currency volatility and payment liquidity risks linked to political uncertainty.
Source 1: Food for Mzansi
Source 2: Inside Politics
