by Ndumiso Mlilo
JOHANNESBURG, Nov. 3 (Xinhua) -- The potential withdrawal of South Africa's preferential access to the U.S. market under the African Growth and Opportunity Act (AGOA) would put pressure on several export-oriented sectors, although the overall impact on the country's economy may be limited, a South African business insider has said.
Wolfe Braude, manager of the fruit desk at the Agricultural Business Chamber of South Africa (Agbiz), told Xinhua that losing AGOA benefits would affect a range of industries, particularly those that have developed established export relationships with the United States.
The U.S. government on Monday announced that President Donald Trump had notified Congress and the governments of South Africa and Rwanda of his intention to terminate their AGOA eligibility effective Jan. 1, 2027.
U.S. Trade Representative Jamieson Greer said the decision followed an annual review of the eligibility of sub-Saharan African countries for the trade preference program. Washington cited what it described as barriers undermining U.S. trade and investment, as well as practices posing threats to U.S. national security and foreign policy interests in the region. It also raised concerns about corruption in South Africa.
The announcement gives South Africa 60 days' notice before the proposed termination takes effect, leaving room for further diplomatic engagement.
Braude said that although AGOA-related exports account for a relatively small proportion of South Africa's overall exports, the loss of preferential access could have significant consequences for particular industries.
According to figures released by the South African government, approximately 10 percent of South Africa's exports to the United States entered under AGOA in 2025, down from 28 percent in 2024. The value of these exports stood at about 1.7 billion U.S. dollars, compared with 4 billion dollars in the previous year, accounting for roughly 1 percent of South Africa's total global exports.
"The U.S. market remains important even if the proportion of our exports going there is relatively small," Braude said, adding that sectors such as citrus, automotive and textiles could face particular challenges.
Braude said that rising production costs, particularly higher fertilizer and fuel prices linked to Middle East tensions, would further compound the challenges for exporters if AGOA benefits are withdrawn. "We are hoping that South Africa and the U.S. will reach an agreement," he added.
Braude noted that South Africa's agricultural exporters would face increased competition from countries such as Peru and Chile, which have free trade agreements with the United States. Without AGOA preferences, South African products could become less competitive in the U.S. market because of additional import duties.
He said that agricultural exporters often tailor their products to the preferences of specific markets, including fruit varieties with particular colors and shapes. Establishing relationships with suppliers, importers and distributors can take one to two years, making it difficult for exporters to switch markets at short notice.
Braude said Agbiz was prepared to provide the South African government with industry information to support its negotiations with Washington.
He expressed hope that the two governments would use the 60-day notification period to seek a solution, saying that an agreement could potentially involve alternative tariff arrangements or a reconsideration of the proposed withdrawal.
At the same time, Braude stressed the importance of diversifying South Africa's export destinations.
"We are very happy with zero duty with China. Our members are excited about that. Some are already using it," he said, referring to China's zero-tariff treatment for South African exports, which took effect on May 1, 2026, as a temporary arrangement pending a broader trade agreement.
He said South Africa was also looking to expand trade opportunities in other markets, including India, Indonesia, the Philippines, Vietnam and the United Arab Emirates.
For agricultural exporters, however, diversification would take time, as developing new markets requires investment, regulatory approvals and the establishment of reliable commercial relationships.
South Africa has reiterated its commitment to diversifying export markets, including through trade opportunities in China, India, the European Union, the United Kingdom, the African Continental Free Trade Area and other emerging markets.
The AGOA decision comes amid strained bilateral relations over a range of domestic and international issues. The Trump administration has repeatedly made allegations of discrimination against South Africa's white minority, including claims of a so-called "white genocide," which the South African government has rejected as unfounded.
The Trump administration has also criticized South Africa's foreign policy positions, including its decision to file a case before the International Court of Justice (ICJ) against Israel over alleged acts of genocide in Gaza.
