Some economists fear SA runs the risk of being excluded from AGOA

JOHANNESBURG - Some economists fear South Africa runs the risk of being excluded from the African Growth and Opportunity Act (AGOA) as US President Donald Trump takes a swipe at Pretoria on some of its domestic policies.

Trump and his US Secretary of State Marco Rubio recently made inflammatory comments on South Africa’s Expropriation Act falsely accusing the country of land grabs.

The criticism sparked concerns about what appears to be deepening tensions between the two countries.

This comes with concerns of political, diplomatic and economic consequences.

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During the previous US administration led by Joe Biden, South Africa’s participation in AGOA appeared to be safe.

However, with the change in power – some economists have warned that Trump could punish SA for some of its foreign policies by pulling Pretoria’s participation from AGOA.

The legislation established in the year 2000, gives 35 eligible African countries exemption from taxes on their exports to the US.

While economist Dale McKinley says the cost of booting SA out of AGOA is too high on both sides – he believes Trump is likely to use it as a bargaining chip.

“I think you’re going to see in the period up to the renewal period in September increasing pressure from the trump administration for South Africa to change its diplomatic stance on Palestine.”

AGOA is set to expire in September this year as its renewal and extension are still up for debate before US lawmakers.