Deepening Trade and Investment Relations post-AGOA – Three Options for South Africa

The document analyzes the economic relationship between South Africa and the US, noting that while trade and investment have grown, South Africa underutilizes AGOA's duty-free preferences. It proposes three post-2025 paths: allowing AGOA to expire (Simple), negotiating a Partial Scope Agreement (Moderate), or pursuing a comprehensive Free Trade Agreement (Comprehensive).

• The United States has become a critical economic partner for South Africa, with total trade growing from under $3.3 billion in 1985 to a peak of $16.8 billion in 2011. By 2015, the US was South Africa's second largest single trading partner after China, and US foreign direct investment (FDI) into South Africa nearly doubled over the 15 years preceding the report.
• South Africa significantly underutilizes the duty-free tariff preferences provided by AGOA and the Generalized System of Preferences (GSP). In 2015, South Africa used only 110 of 1,835 AGOA duty-free lines (6%) and 459 of 3,400 GSP lines (13.5%).
• The US Trade Representative's March 2016 report identified several barriers to US business in South Africa, including technical barriers to trade, sanitary and phytosanitary barriers, high tariff barriers compared to the EU, non-tariff bureaucratic measures, inadequate intellectual property rights protection, and investment barriers such as black economic empowerment requirements.
• A 'simple' post-AGOA approach—allowing the act to expire without a replacement—would reduce South Africa's duty-free access to the US market from 85% (combined AGOA, GSP, and MFN) to 69%, and potentially as low as 36% if GSP benefits are also lost. This could risk over 60,000 jobs in the agriculture, metals, and automotive sectors.
• A Partial Scope Agreement (PSA) is proposed as a moderate option to create a tailored reciprocal agreement on selected products or sectors. While it could address specific production realities and provide a 'building block' for future expansion, its viability is challenged by potential US dissatisfaction with its limited scope and WTO compliance issues, as PSAs are generally reserved for 'developing' countries.
• A comprehensive Free Trade Agreement (FTA) is the most ambitious option and could increase market access and diversification. Although a 2003-2007 attempt by the Southern African Customs Union (SACU) and the US failed due to US inflexibility on 'new generation' issues like intellectual property and services, the report argues that current economic stagnation and a focus on export-led growth justify reconsidering this path.

APA

Prinsloo, C., & Ncube, C. (2016). Deepening Trade and Investment Relations post-AGOA – Three Options for South Africa. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2016/09/Policy-Insights-36.pdf

Chicago

Prinsloo, Cyril, and Charisma Ncube. Deepening Trade and Investment Relations post-AGOA – Three Options for South Africa. South African Institute of International Affairs, 2016. https://saiia.org.za/wp-content/uploads/2016/09/Policy-Insights-36.pdf.

Wikipedia

{{cite report |last1=Prinsloo |first1=Cyril |last2=Ncube |first2=Charisma |title=Deepening Trade and Investment Relations post-AGOA – Three Options for South Africa |publisher=South African Institute of International Affairs |date=September 2016 |url=https://saiia.org.za/wp-content/uploads/2016/09/Policy-Insights-36.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{prinsloo2016deepening, author = {Prinsloo, Cyril and Ncube, Charisma}, title = {{Deepening Trade and Investment Relations post-AGOA – Three Options for South Africa}}, institution = {South African Institute of International Affairs}, year = {2016}, month = sep, url = {https://saiia.org.za/wp-content/uploads/2016/09/Policy-Insights-36.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }