SA-US trade relations – from chicken wars to Trump and beyond

South Africa - 30 October 2017

The United States of America is a longstanding and important trading partner of South Africa, not only because it absorbs large volumes of South Africa’s metal, mineral, manufactured and agricultural exports but also because it is a major source of foreign direct investment (FDI) and official development assistance (ODA). South Africa, in turn, imports sizeable quantities of technology-rich machinery, equipment and other value-added products from the US, which supports South Africa’s economic growth and development efforts. About 600 US companies operate in South Africa (which is the largest market for the US in Africa), together employing about 120,000 people. Traditionally, the two countries enjoyed a cordial relationship, with each viewing the other as a strategically significant gateway into a potentially vast and important market on the other side of the world. But in recent years the relationship between South Africa and the United States has become somewhat fractious. South Africa has been crying foul over what it perceives to be the United States’ heavy-handedness in trying to secure greater access into the South African market. A particular bone of contention for South Africa has been the alleged dumping of US chicken products on the local market, with costly consequences for South African chicken farmers. The United States, in turn, has become increasingly vocal about the need for South Africa ‒ which currently enjoys duty- and quota-free access for a large proportion of its US-bound exports under the Generalised System of Preferences (GSP) and African Growth and Opportunity Act (AGOA) scheme combined ‒ to commit to a more reciprocal trade partnership. Indeed, a number of US Congressmen have over the years stated that South Africa is ‘too developed’ to still be benefiting from the raft of benefits under AGOA which were intended as a temporary measure to encourage beneficiary countries to improve their export competitiveness across various industry sectors.

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