By Lehlohonolo Lehana.
Minister of Agriculture John Steenhuisen has expressed concern over the impact of Donald Trump’s adminstration tariffs on several sectors in South Africa.
South Africa is on the long list of countries dubbed the “worst offenders”, which also includes China, Japan and the European Union. These now face higher US rates – payback for unfair trade policies.
Steenhuisen was responding to questions from MPs in the National Assembly on Thursday afternoon as part of the cabinet’s economic cluster oral question and answer sessions.
He acknowledged that the US was a strategically important trade partner for South Africa and that his department was working hard to keep the relationship intact.
“The department of agriculture seeks to continuously strengthen its relationship with the US department of agriculture by holding regular discussion on a variety of matters relating to maintaining existing market access conditions between the two countries,” he said.
He said his department prioritised this by appointing an agricultural attaché to the US for the first time in many years. Steenhuisen said he planned to engage with his US counterpart, Brooke Rollins, in due course.
He said while the American Growth and Opportunity Act (Agoa) provided African goods with tariff-free access to the US market, it was unlikely that the act would be extended beyond its expiration in September or that South Africa would be allowed to continue participating in it if it is extended.
In 2022, South Africa exported goods worth R60-billion to the US under Agoa’s duty-free access agreement. This was about a quarter of all SA-US trade, according to the South African Revenue Service. The agreement supports hundreds of thousands of jobs in the automotive, agricultural and manufacturing sectors, among others.
Agoa, enacted in 2000, was designed to boost African exports by granting duty-free access to the US market. For South Africa, it has had beneficial but not extraordinary results. Primarily, Agoa has underpinned growth in high-value exports such as vehicles, citrus, wine and some apparel.
But the geopolitical calculus has changed with Trump’s ascendance to the US presidency for a second time, in part spurred on by waves of disinformation from both South Africa and the technocrats close to his inner circle such as Elon Musk, Peter Thiel and David Sacks, among others.
Alternatives exist, but none has the same scale or immediacy as Agoa. South Africa already exports the majority of its vehicles to the EU under the Economic Partnership Agreement. An agreement between the UK and the Southern African Customs Union (Sacu) offers a similar backstop. India and Sacu are in renewed negotiations too.
Government of National Unity (GNU)
Steenhuisen hit back at members of Parliament who questioned his presence in the National Assembly on Thursday afternoon.
His party’s federal executive has been grappling whether to stay or wait to possibly be pushed out in the GNU, after weeks of budget wrangling pushed the blue party’s relationship with the African National Congress (ANC) to the brink.
The Patriotic Alliance’s Marlon Daniels took a pot shot at the DA amid the heckling from its members.
“Can those people who are busy clearing their offices for the next GNU to come in, can you please take control of them so we can have order in this house?”
But Steenhuisen told Daniels to hold his horses.
“I know they are desperate to get into the offices, but ther’s no absence of presence yet, you will have to wait a little bit.”
SRD Grants
Finance minister Enoch Godongwana told MPs the National Treasury and the department of labour and employment were working on a review of the SRD grant to determine its long-term fate, with a possible conversion to a job seekers’ grant.
This was the first time the minister appeared in the House since his contentious budget, which includes a 0.5 percentage point VAT hike, was passed, prompting government of national unity partner the DA to take legal action.
“The future, form and nature of the Covid-19 SRD grant will be informed by the outcome of the review of the labour policies. Long-term economic participation is a critical objective and the solution must consider long-term benefits, affordability, complementarity with basic services and employment promotion effort.”
He acknowledged unemployment was a problem, adding it was a result of stagnant growth. He said it is incorrect to say there is no attempt at growth and jobs in his budget.
Godongwana said there was no intention to terminate the SRD grant and while the review process may see the grant re-emerge as a job seeker’s grant he could not give a definitive answer yet, as the review was still ongoing.
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Video Courtesy of Parliament.