JOHANNESBURG - South Africa maintains a trade surplus with the United States, a position that is not unique but is unusual for a developing country.
The benefits South Africa enjoys under the US African Growth and Opportunity Act (AGOA) are particularly significant for the agricultural sector, including processed fruit, nuts, wine and other commodities.
READ: SA citrus and nut industries resilient amid AGOA uncertainty
Agricultural economist Wandile Sihlobo says the country’s citrus and nut industries are relatively resilient as South Africa awaits a US decision on its continued eligibility for AGOA.
South Africa is expected to find out on Monday whether it will retain preferential access to the American market under the Act.
Trade and Industry Minister Parks Tau says the government remains hopeful of a favourable outcome, following engagements with US officials over the past year.
Bilateral trade between the two countries reached $28.8 billion last year, with more than 600 American companies operating in South Africa.
If the eligibility review goes against South Africa, Tau says the country will have 60 days to address US concerns before any suspension of benefits takes effect.
The US is also heading to midterm elections on Tuesday, with Republicans fighting to retain control of the House of Representatives and the Senate.
Analyst Brooke Spector says a Democratic victory in both chambers could create an opportunity for renewed scrutiny of the Trump administration’s foreign and economic policies, potentially including its position on South Africa’s AGOA membership.
“There would undoubtedly be hearings, testimonies, subpoenas, summonses on the full range of American foreign policy and international economic policy issues,” he said.
Spector says South Africa’s membership of AGOA could be among the issues considered, although it would not necessarily be the most significant.
“Once a determination is made, it does not mean that it is written in stone and can never be changed,” he said, adding that sufficient pressure in Congress could lead to a reconsideration.
However, if Democrats fail to gain control of both chambers, Spector believes President Donald Trump and his economic policy team could have greater leverage to remove South Africa from the list of eligible countries.