Trump cancels trade benefits for South Africa and Rwanda

The Trump administration says it will eject South Africa and Rwanda from a long-standing U.S. trade preference program, signalling that it will continue to use its trade policies as a weapon against politically recalcitrant countries.

The two African countries have annoyed President Donald Trump by defying his pressure on some of their key national policies. Rwanda has refused to withdraw thousands of its troops from lucrative mining zones in eastern Congo, while South Africa has declined to abandon its land expropriation and affirmative action programs.

The U.S. decision is expected to trigger the loss of thousands of jobs, especially in South Africa, where the agricultural and automotive sectors will be hurt.

U.S. Trade Representative Jamieson Greer made the announcement Monday, saying Mr. Trump had notified Congress that the two countries will be terminated from the African Growth and Opportunity Act on Jan. 1.

The AGOA trade deal has been the central U.S. economic policy in Africa for 26 years, supporting about US$10-billion in annual trade in thousands of products and sustaining hundreds of thousands of jobs in 32 African countries.

Trump’s attacks on South Africa are a gift to the ruling ANC ahead of an election

After an annual review, Mr. Trump found that the governments of Rwanda and South Africa were “engaging in practices that are inconsistent with AGOA’s eligibility criteria,” Mr. Greer said in a statement.

“In South Africa, the Trump Administration is deeply concerned by barriers to U.S. trade and investment, corruption, and threats to U.S. national security and foreign policy interests,” he said.

Brent Bozell, the U.S. ambassador to South Africa, made clear that the U.S. decision was based on grievances Mr. Trump has repeatedly voiced since last year, including the false allegation that South Africa is arbitrarily seizing the farmland of white farmers and perpetrating “genocide” against them.

The trade decision was “a predictable and preventable outcome resulting from the rejection by South Africa’s government of real concerns raised by the U.S. government,” Mr. Bozell said in a social media post.

In a late-night response to the U.S. announcement, the South African government said it had offered fresh concessions to U.S. officials during their latest trade negotiations, but the Trump administration was now raising “new issues” that were never tabled in earlier talks. It said it will take measures to support South African companies affected by the termination of AGOA benefits.

U.S. hits South Africa with new sanctions over alleged discrimination against whites

South Africa and Rwanda have both been the target of U.S. sanctions in recent weeks. Rwanda has angered Washington by deploying thousands of its troops in the Democratic Republic of the Congo, sabotaging a peace agreement Mr. Trump had trumpeted in December as a bonanza for U.S. mining companies.

The program has been in turmoil under Mr. Trump. It was allowed to expire last year, then was retroactively reinstated in February and was extended again in September – with the eligibility question postponed until this week.

South Africa was the biggest beneficiary of AGOA, exporting US$1.7-billion in goods to the United States under the program last year, and will be hurt more than Rwanda by its termination. But because of other U.S. tariffs that were imposed on South Africa last year, the loss of AGOA status will add only 3.4 per cent to the cost of goods that had entered the U.S. under the trade preference deal, analysts say.

The cancellation of the AGOA benefits “may not mean a catastrophe” because it might only slightly reduce the competitiveness of South African products in the U.S. market, according to Wandile Sihlobo, an economist and South African presidential envoy on agriculture and land.

Trade unions, however, have warned the consequences could be significant. Estimates of the expected job losses in South Africa have ranged from 3,000 to as many as 125,000.