Trade union Solidarity has submitted a proposed settlement to the South African and United States (US) governments aimed at resolving parts of the diplomatic dispute between the two countries and protecting South Africa’s access to preferential US trade arrangements.

At the centre of the proposal is South Africa’s continued participation in the African Growth and Opportunity Act (AGOA), which gives qualifying African countries preferential access to the US market. Although AGOA has recently been extended until the end of 2028, individual countries must continue to meet eligibility requirements and can be removed from the programme.

Solidarity said its proposal would provide a route for South Africa to gradually move away from race-based economic policies by 2030 while addressing concerns raised by Washington about restrictions facing American companies investing in the country.

One proposal would expand the use of equity equivalent programmes as an alternative to ownership requirements. These programmes already allow qualifying multinational companies to make investments in areas such as skills and enterprise development instead of selling part of their South African operations to black shareholders. Solidarity wants such arrangements to be available more broadly and ultimately applied on a non-racial basis.

The proposal also calls for non-racial employee share ownership programmes to be considered as an alternative ownership mechanism. Solidarity further wants regulations allowing the employment and labour minister to impose racial employment targets across sectors to be suspended while legal challenges against them are decided.

It proposes widening the definition of people eligible for affirmative action measures so that all South Africans born after 1994, as well as people below a specified income threshold, could qualify regardless of race.

Solidarity chief executive Dirk Hermann said the organisation had discussed South Africa’s race-based policies extensively with both governments.

“Our view is that race-based laws no longer have a place in South Africa. However, based on what we have learned through these discussions, we believe that our settlement proposals are something both governments could accept,” Hermann said.