US Trade Representative Jamieson Greer has announced that President Donald Trump intends to terminate South Africa’s eligibility for the African Growth and Opportunity Act (AGOA) from 1 January 2027, citing barriers to American trade and investment, corruption, and threats to US national security and foreign policy interests.

Greer said South Africa was engaging in practices inconsistent with AGOA’s eligibility requirements, including “barriers to US trade and investment, corruption, and threats to US national security and foreign policy interests.”

Bheki Mahlobo told The Common Sense that “the economic impact of South Africa’s exclusion should not be overstated. AGOA is essentially an aid programme for early-stage developing economies and is not really appropriate for an economy of South Africa’s sophistication. Exports under AGOA account for just over 2.0% of South Africa’s total exports, and modest fluctuations in the rand exchange rate will have a greater effect on the country's economy than the loss of AGOA. Well-prepared industries will also have anticipated this outcome and developed workarounds.”

The real loss to South Africa is the failure of its government to conclude the much broader trade and investment agreement that the United States has sought. Such an agreement could have opened significant new opportunities for South African exporters, attracted American investment capital, and strengthened commercial relations between the two countries. Instead, the South African government has obstructed and undermined efforts to reach such an agreement at almost every turn.

Two issues lie at the centre of that obstruction.

The first is reciprocity. Washington regards South Africa’s broad-based black economic empowerment (BEE) requirements as a non-tariff barrier to American trade and investment. South Africa has refused to acknowledge the problem, despite allowing equity-equivalent arrangements for numerous other foreign investors.

The second is the extent to which South Africa’s foreign policy threatens American national security interests, particularly through its relationship with Iran. Here, too, Pretoria has refused to take seriously the concerns Washington has raised.

US Ambassador to South Africa Leo Brent Bozell III said:

"It is regrettable that South African policies led to the termination of AGOA for South Africa. This was a predictable and preventable outcome resulting from the rejection by South Africa’s government of real concerns raised by the US Government. I remain hopeful that we can find a path forward to address our larger bilateral concerns, but the South African government must understand the gravity of the situation. We know that if America succeeds, so too will South Africa. This is the partnership I will continue to pursue as expeditiously as possible."

For people who understand the minor role played by AGOA in South Africa’s economy, and appreciate the real issues at stake, the impact of the AGOA exclusion is therefore more symbolic than material. As with the visa restrictions announced just over a month ago, the intention is to increase pressure on South Africa to address American concerns and show up at the negotiating table in good faith to conclude a substantive trade and investment agreement. Such an agreement would be of considerably greater economic value to South Africa than the retention of AGOA preferences.