Cosatu welcomes SA’s work to secure Agoa deal

Solly Phetoe is general secretary of Cosatu. File image / Independent Newspapers

Solly Phetoe is general secretary of Cosatu. File image / Independent Newspapers

Published Apr 15, 2024


By Solly Phetoe

THE Congress of South African Trade Unions (Cosatu) commends the government’s efforts and progress to boost trade opportunities with the US through the African Growth and Opportunities Act (Agoa).

Our number one challenge is our 41% unemployment rate. While we have made progress in reducing unemployment by 5% in 2023, we cannot afford to lose a single job.

Cosatu has a vested interest in protecting and creating jobs and growing the economy. We ignore unemployment at our own peril.

Agoa provides preferential access for African, including South African, exports to the US. The US is not only the world’s largest economy, but one of our major trading partners.

South African sectors benefit from this preferential access include minerals, motor vehicles, clothing, jewellery, chemicals and agriculture.

Agoa has helped boost Africa’s economic integration. Botswana’s exports to the US are relatively small at $1 million (R19m) per annum. However, Botswana exports wire harnesses valued at more than $120m to South Africa each year for cars assembled here and then exported to the US.

Similar stories of Africa’s increasing linkages feature in South Africa’s vehicle exports to the US with steering wheel components made in Tunisia, tyre rubber grown in Cote D’Ivoire and car seat covers produced by Lesotho.

The world has experienced significant geo-political turbulence with the tragic wars in Ukraine and Palestine. Few countries have escaped the resulting instability.

South Africa is not immune to these choppy waters. Our foreign policy since 1994 under successive administrations led by the ANC has correctly been anchored upon the principles of non-alignment, promoting South Africa and Africa’s development and the peaceful resolution to conflicts.

At times this desire to remain non-aligned and support the peaceful resolutions of conflicts has not been easy, but we are proud of the progressive role South Africa has played in helping to resolve difficult situations, from Lesotho to Mozambique, from the Democratic Republic of Congo to Burundi, from Sudan to the Comoros and even as far afield as Northern Ireland.

The conflict in Ukraine and the occupation of Palestine and onslaught against the Palestinian people have exacerbated geo-political tensions.

In 2023 calls were made in the US Congress for South Africa’s removal from Agoa. This would have threatened thousands of jobs in South Africa. It would have had a similarly dire impact on African countries whose exports are included in finished South African products sent to the US.

In 2023, as South Africa was preparing to host the Agoa Forum, calls were made for it to be shifted elsewhere. More recently a bill was passed in the US House Foreign Relations Committee censoring South Africa’s foreign policy.

These developments naturally raised concerns within South Africa given the challenges our economy faces and our high levels of unemployment. Cosatu will always remain alarmed by any threats to South African jobs.

President Cyril Ramaphosa mandated the Trade, Industry and Competition Minister, Ebrahim Patel, with the ministers for international relations and co-operation, finance and the Presidency, to co-ordinate a response to these developments.

A common national position had already been developed between government and organised labour and business at Nedlac over many years of engagements.

Patel alongside his Cabinet colleagues and labour and business leadership went to Washington, DC, to meet key figures in the US administration, Congress, business, labour and think tanks to address these headwinds, to ensure that they do not undermine South Africa’s trade relations, and to accelerate momentum towards an extension of Agoa.

While such engagements are never easy, we have seen remarkable progress.

The Agoa Forum was held in Johannesburg on behalf of the African continent and for the first time included a dedicated labour component. Not only was it a resounding success but it received positive endorsements from across the aisle in the US Congress.

We received welcome news this week of a bill introduced in the US Senate with bipartisan support proposing that Agoa, which is due to be expire in 2025, be expedited for renewal.

It has proposed countries reaching the middle-income threshold that currently sees their graduation out of Agoa be amended to cover a five-year, not a one- year period. This will help countries avoid premature exits due to commodity price fluctuations.

Much has been said about the criteria for countries to be admitted to or exited from Agoa and how these hurt their economic development and workers’ jobs.

A more nuanced approach has been proposed providing for less extreme options. This is critical as workers should not be punished for the failures of politicians, let alone those they have no say on in their election to office.

What we have seen over the past 18 months is South Africa experiencing very choppy waters on the geo-political front and a calm, measured and progressive response by the South African government.

It has been an approach inclusive of organised labour and business and has defended South African jobs and our economic interests as well as the continent’s.

This has been a remarkable story and a success. We have moved from a discussion about expelling South Africa from Agoa to one of how Agoa can be strengthened to accelerate economic development in South Africa and Africa.

During elections in a very noisy democracy, it is natural to forget our wins. But we should be balanced and commend the government when it does well, more so when workers and society are better for it.

While we commend the government on the work being done, we need equally to expand trade with other key partners, be it the EU, China, Japan, India or Brazil and, most importantly, with the African continent. This is critical not only to creating jobs and stemming the tides of migration but also to anchoring our non-aligned stance.

Cosatu will continue to work with the government, led by the ANC, to ensure that not only is an enhanced Agoa put in place but that it champions the jobs and economic development of South Africa and Africa.

Cosatu general secretary Solly Phetoe.