US threatens South Africa with loss of trade privileges over Russia ties

In the latest escalation between Washington and Pretoria, leading foreign policy voices from both the Democratic and Republican parties wrote to the Joe Biden administration on 9 June to request that US officials find another venue for this year’s forum of the African Growth and Opportunity Act (AGOA). The annual gathering of trade ministers from across the continent is expected to be held in South Africa later this year.

“We are seriously concerned that hosting the 2023 AGOA Forum in South Africa would serve as an implicit endorsement of South Africa’s damaging support for Russia’s invasion of Ukraine and possible violation of US sanctions law,” says the letter signed by Democrats Chris Coons and Gregory Meeks and Republicans Jim Risch and Michael McCaul.

The letter to Secretary of State Antony Blinken, US Trade Representative Katherine Tai and national security adviser Jacob Sullivan, first reported by The New York Times, hints that Washington should rethink South Africa’s participation in the program when its eligibility comes under review next year.

This coincides with the US Commerce Department’s prohibition of exports to three South African flight schools accused of training Chinese military pilots.

“It’s interesting that the US is taking a much more aggressive stance now,” says Alex Veit, a policy analyst who specialises on Southern and East Africa with the European Council on Foreign Relations.

“Previously, I had the impression that the US was kind of trying to embrace South Africa much more on the whole Ukraine-Russia question, bringing them on all kinds of committees and meetings and stuff to kind of lure them on the American side,” Veit tells The Africa Report. “And now they’ve probably given up on that and would rather do it with a more aggressive strategy.”

Running out of patience

Congress, in particular, has run out of patience.

Back in February, the new chairman of the House Foreign Affairs panel on Africa, Republican John James of Michigan, introduced a resolution calling on the Biden administration to conduct a “thorough review” of bilateral relations.

The resolution was prompted by Pretoria’s joint naval exercises with the Russian and Chinese navies. Since then, relations have only deteriorated, with US Ambassador Reuben Brigety accusing South Africa, in May, of allowing weapons and ammunition to be loaded onto a US-sanctioned Russian cargo vessel when it was allowed to dock at Simon’s Town naval base in December last year.

In their letter to US officials, the lawmakers also denounce the April landing of a US-sanctioned Russian military cargo plane at a South African air base as well as efforts to invite President Vladimir Putin to this summer’s summit of the BRICS economic group in Johannesburg.

[Government officials] share congressional concerns about South Africa’s security relationship with Russia

“These actions by South Africa call into question its eligibility for trade benefits under AGOA due to the statutory requirement that beneficiary countries not engage in activities that undermine US national security or foreign policy interests,” the lawmakers said.

“While we understand that the AGOA eligibility review process for 2024 is underway and that decisions have not yet been made, we question whether a country in danger of losing AGOA benefits should have the privilege of hosting the 2023 AGOA Forum. Our concerns are shared by many South African citizens and businesses, who are increasingly vocal about deteriorating conditions in the country.”

A State Department spokesperson tells The Africa Report that government officials “share congressional concerns about South Africa’s security relationship with Russia” and are preparing a response to the letter.

“AGOA is an important component of the US economic partnership with Africa,” the spokesperson says. “The AGOA forum is an invaluable opportunity to promote trade with more than 30 African countries in ways that benefit both African and American businesses and consumers.”

Crisis point

Losing access to AGOA would be a bitter blow for South Africa’s already struggling economy.

Not counting oil exports, South Africa is the biggest beneficiary from the 23-year-old program, exporting $2.7bn worth of goods in 2021, according to the US Commerce Department. The country also exports the widest array of products under AGOA, “ranging from passenger vehicles to citrus products, yachts, and frozen sorbets”.

Worse still, exclusion from the program would be a huge red flag for an array of manufacturers, such as automobile companies that have set up operations in the country for export to the US market. After Ambassador Brigety levied his accusations, the value of South African rand dropped to an all-time low of R19.27 per dollar.

“Losing AGOA would bring the business community, the liberal press [and the] the liberal opposition onto the barricades,” says analyst Veit.

It’s not just South Africa’s Russian entanglements that have the US worried. This week, the Commerce Department blacklisted three South African flight schools – the Test Flying Academy of SA (TFSA), Pearl Coral 1173 CC and AVIC International Flight Training Academy – for their alleged ties to China.

“These entities are added for providing training to Chinese military pilots using Western and NATO sources,” the department says. “This activity is contrary to US national security and foreign policy interests.”

As a result, export licence applications for the three entities “will be reviewed under a presumption of denial.”

De-escalation

Veit sees two main reasons for South Africa’s dalliance with Russia.

First is the government’s decision to largely cede foreign policy to the ruling African National Congress, which has longtime ties to Moscow dating from the struggle against apartheid. With elections next year, Veit says, President Cyril Ramaphosa is in no hurry to provoke another intra-party fight.

Secondly, he says, South Africa is keen to retain the economic and political clout it gained when it joined Brazil, Russia, India and China in 2010 in the BRICS group of nations.

“South Africa [is] very conscious that non-alignment gives them the ability to have greater political impact on the global level, rather than being more closely aligned to one side or the other,” he says.

“This gives them kind of the leadership in Africa…since many African countries would also like to be part of the BRICS arrangement.”

I think their going to Kyiv now is actually signalling that they are trying to rebalance the whole perspective on the Ukraine-Russian war

Despite its resentment toward the US, Veit sees evidence that South Africa is taking Washington’s threats seriously.

Even as it denied Brigety’s allegations, Ramaphosa’s government announced an independent probe into the charges. The president has also been giving more credence to the Ukrainian side of the conflict, and is now planning on leading a delegation of African leaders to both Moscow and Kyiv later this month.

“I think their going to Kyiv now is actually signalling that they are trying to rebalance the whole perspective on the Ukraine-Russian war,” says Veit.

At the same time, he says, the US also has a lot to lose if relations continue to spiral downwards.

“It’s the most important country [in which] to have influence in the southern part of Africa, which is important to the US regarding minerals and other [priorities].”