The South African government has put forward a spirited defence of its eligibility for the African Growth & Opportunity Act (Agoa) despite its upper-middle-income country status, with Pretoria pushing for a 15-year extension of the duty-free pact. The Parks Tau-led department of trade, industry & competition said in its submission to the office of the US trade representative on the modernisation of Agoa that a longer agreement would benefit the US and investors. “South Africa supports an ambitious, predictable and development-orientated renewal of at least 15 years. “This would strengthen mutually beneficial trade and investment; advance regional value chains in line with the African Continental Free Trade Area (AfCFTA), investment and infrastructure opportunities; and [build] supply chain resilience,” the department said in its submission. “Importantly, a short-term renewal or lack of certainty in Agoa harms both South African and US trade and investment and undermines predictability in trade.”One of the reforms the department is pushing for concerns the qualification criteria to be a party to Agoa, with some having argued in the past against South Africa’s inclusion either on political grounds or due to its status as an upper-middle-income country. “Graduation using only the gross national income (GNI) per capita for countries that reached high-income status is not a good measure given that many countries on the continent, including South Africa, experience high rates of inequality — where poverty is still prevalent in many areas.”The department said consideration should be given to also using the Gini co-efficient in addition to GNI per capita. “Importantly, a country may reach the income threshold in one year and get graduated and then see its income drop during an economic downturn. This would necessitate reconsideration of its status, and this would result in significant disruptive effects on investment.”The Trump administration recently renewed Agoa, which gives South Africa duty-free access for a broad range of exports, including vehicle, agricultural and textile products, for a year. The extended agreement is set to lapse at the end of the year. The department, which is custodian of South Africa’s trade and industrial policy, flagged the deep trade and economic ties between South Africa and the US. Its submission stated that about 22 South African companies have invested in the US, employing about 6,900 people, while South Africa hosts more than 600 US companies, employing about 134,600 people.Some of the South African companies that have made significant investments in the US include Sibanye-Stillwater and Sasol, the latter’s $12.6bn investment in the Lake Charles Chemicals Project in Louisiana being the largest investment by an African company in the country.However, business network Sakeliga put a spanner in the works, proposing that the US pivot Agoa to base participation criteria on individual firms’ conduct rather than policies pursued by governments, which might fall foul of US interests.The basis of Sakeliga’s argument in its submission is that South Africa’s broad-based BEE framework creates measurable barriers to US trade and investment. “The country’s trade regulator, the International Trade Administration Commission (Itac), has started incorporating racial ownership and management criteria into some of its tariff, quota and permit processes: some of its application forms already require disclosure of black ownership percentage and BEE compliance level, and its published strategic plan commits to progressively incorporating BEE requirements across its trade licensing processes over the coming five years,” Sakeliga’s submission reads.“A country-level eligibility decision forces a trade-off: the US can apply pressure on the South African government, but only at the cost of affecting all of these commercial relationships without distinction. “Entity-level mechanisms would give the US the ability to maintain that pressure while preserving access for producers whose conduct aligns with US standards and preserving the domestic constituency that advocates and works for the governance reforms Agoa seeks to encourage.”For its part, the office of the US trade representative has outlined several concerns with Agoa in its current form, including China’s outsized role in Africa, as the world’s two largest economies wrestle for dominance in Africa. “South Africa maintains high tariffs on US poultry, wine and spirits, while providing preferred access to the EU. South Africa has imposed unjustified animal health restrictions on US pork products, permitting a very limited list of US pork exports to enter South Africa,” the office said.“Once a top agricultural exporter to Sub-Saharan Africa, during Agoa’s lifespan the US has lost significant market share to China, the EU, India and others. For instance, in 2025 total US agricultural exports to Sub-Saharan Africa were $2.2bn, compared with $14.5bn for the EU, $6.8bn for India, $5.1bn for Malaysia, $4.8bn for Brazil, $3.4bn for Indonesia and $2.9bn for China.”In its response to this criticism the department acknowledged the need for the US to pursue an investment-led trade strategy, including value addition and beneficiation of critical raw materials and minerals in Africa. The department stressed that South Africa already accounts for 12 of the 50 critical minerals identified by the US geological survey.“The US can work with Africa on beneficiating minerals into applications and products required by US industry,” the department said. “Importantly, South Africa has significant mining processing capabilities that the US can tap into, including a reliable energy supply that can support processing capabilities, having now resolved load-shedding. South Africa therefore stands ready to forge a mutually beneficial partnership with the US, aligned with its development objectives.”On pork products, the department said the South African market is open to US pork, subject to science-based animal health restrictions that it applies to all its trading partners.Business Unity South Africa (Busa) and trade union federation Cosatu came out in support of a longer Agoa extension. However, the business lobby group warned that the practical value of Agoa preferences for South Africa has been dramatically eroded by broader US tariff measures pursued by the Trump administration.The group pointed out in its submission that South Africa currently faces a 10% baseline tariff, a 25% tariff on vehicles under section 232, and 25% tariffs on steel and aluminium, arguing that Agoa modernisation cannot deliver its intended commercial impact while these tariffs remain in place. “The commercial arithmetic is stark: automotive vehicles constituted 64% of South Africa’s Agoa exports in 2024. Automotive export earnings to the US fell from about R17.7bn in 2024 to R8bn in 2025 following the section 232 imposition, a reduction of more than half in a single year,” Busa said.