Cape Town – Thousands of jobs in South Africa’s agricultural and automotive industries could be at risk after the United States moved to withdraw the country’s preferential trade benefits under the African Growth and Opportunity Act (AGOA), raising concerns about the future of local exporters.
According to Daily Investor, North-West University Business School professor Raymond Parsons warned that the agriculture and motor industries would bear the brunt of South Africa’s exclusion, despite the relatively limited impact on the broader economy.
The United States announced on Monday, 2 November, that South Africa would lose its AGOA benefits from 1 January 2027, ending preferential duty-free access that the country has enjoyed since the programme was established in 2000.
US Trade Representative Ambassador Jamieson Greer said the decision followed concerns that South Africa was engaging in practices inconsistent with the programme’s eligibility requirements.
“These concerning and pervasive practices include, but are not limited to, barriers that undermine American trade and investment that pose a threat to US national security,” Greer said.
Trade arrangement
AGOA provides eligible African countries with preferential access to the American market for thousands of products, including agricultural goods, manufactured products and automotive components.
Parsons said the consequences would be concentrated in sectors that rely heavily on the trade arrangement, putting thousands of livelihoods at risk.
“Although the loss of AGOA preferences is highly regrettable and the specific sectoral impact may be painful, the situation is manageable if the right market adaptations are made,” he said.
The concerns were echoed by trade unions, with AFP reporting that the Congress of South African Trade Unions (Cosatu) estimated between 3,000 and 10,000 agricultural and manufacturing jobs could be affected.
Cosatu warned that businesses in smaller towns, particularly citrus-producing areas of the Western Cape, were among those facing potential losses.
Meanwhile, Reuters reported that South African citrus producers were particularly concerned because some orchards had been established specifically to supply the American market.
Broader economic consequences
“Entire orchards have been planted specifically for the US market,” said Gerrit van der Merwe, chairman of the Citrus Growers’ Association of Southern Africa.
He warned that some produce could not easily be redirected to alternative markets because of differing health requirements and consumer preferences.
However, economists have cautioned against overstating the broader economic consequences of the decision.
South Africa’s Department of Trade, Industry and Competition said approximately 89% of the country’s exports to the US entered under ordinary World Trade Organisation terms in 2025, while around 10% benefited from AGOA preferences.
AGOA exports were valued at approximately US$1.7 billion in 2025, representing about 1% of South Africa’s total global exports.
In a statement published on the South African Government website, the department acknowledged the concerns facing affected industries and workers.
Logistics reforms
“The impact will differ across sectors, and government is working closely with affected industries to assess the implications and will continue to provide appropriate support,” it said.
The department added that South Africa was pursuing alternative export opportunities through markets in the African Continental Free Trade Area, India, the European Union, the United Kingdom, China and other regions.
Parsons also called for accelerated market diversification and improvements to the country’s domestic business environment, particularly logistics infrastructure.
“This in particular encompasses expediting logistics reform, especially in rail and port facilities, that will help to offset the AGOA loss by keeping South Africa globally competitive,” he said.
South Africa’s exclusion marks another setback in its trade relationship with Washington, although the government maintains that the decision does not undermine the broader economic relationship between the two countries.
Follow African Insider on Facebook, X and Instagram
Picture: ChatGPT
For more African news, visit Africaninsider.com
Compiled by Betha Madhomu
