South Africa did too little too late to renegotiate new trade deals with the United States to minimise the impact of the African Growth and Opportunity Act (AGOA) which is set to expire tomorrow.
Martlé Keyter, Chief Executive Officer: Operations of the Motor Industry Staff Association (MISA), says this is a bleak outlook for the retail motor industry where retrenchments have increased significantly since the start of the whole Trump debacle.
“As majority trade union in the retail motor industry we believe Government underestimated the seriousness of the situation and the devastating impact thereof on the South African economy for too long.
“The damage was done when Ebrahim Rasool, South Africa’s Ambassador in the US, was expelled by the Trump Administration in March. President Cyril Ramaphosa appointed Mcebisi Jonas as special envoy to the US, but he was rejected by Washington in May this year unable to get a visa. This should have alerted us that we have a crisis,” says Keyter.
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Dawie Roodt, founder, Director and Chief Economist of the Efficient Group; blames deterioration of Pretoria-Washington relations on the ANC’s inability to move away from some of its policies and views.
“President Ramaphosa and Trade, Industry and Competition Minister, Parks Tau, has been at the forefront of these negotiations, exerting significant effort to secure a deal that would not only endorse South Africa’s participation in AGOA but also seeking to reduced prohibitive tariffs on its exports and it failed,” says Roodt.
AGOA expires on 30 September and companies that benefit from it have warned that any delay in renewing it risked significant job losses and factory closures.
Political analyst Dr Piet Croucamp says South Africa is not entirely to blame.
“Yes we missed the bus, our problem was that we did not foresee how destructive the Trump Administration could be and the situation became too unpredictable. In the same situation Lesotho managed to extend their textile and apparel benefits under AGOA for another year.
“It is sad, and it will have devastating economic consequences for South Africa, but our only option is to look at other markets. The boat with the US has sailed,” says Croucamp.
