raymondparson

MEDIA STATEMENT · 27 OCTOBER 2026

Prof Raymond Parsons
Economist, NWU Business School, North-West University

Commenting on the latest warning from the South African Chamber of Commerce in the USA (SACCUSA) that South Africa faces an imminent credible risk of losing its preferential trade benefits under the African Growth and Opportunity Act (AGOA) NWU Business School economist Prof Raymond Parsons says:

Although for now SA remains listed as an AGOA beneficiary, the imminent deadline emphasised by SACCUSA has created uncertainty for business interests involved between the two countries. If it happens that SA is indeed now to be excluded from AGOA we must recognise that much is still at stake for specific key business sectors, such as agriculture and the motor industry. First prize remains for SA to be an active participant in AGOA.

Every effort must therefore nonetheless still be made through high-level diplomatic engagement and negotiation to avoid SA being denied AGOA trade access. Although a new trade reality of cancelled AGOA benefits may only ultimately affect about 10% of SA’s total trade with the US and approximately 3% of SA’s total global exports, specific vulnerable sectors like agriculture and motor vehicles will still take a bad knock. And looking at the overall economic impact, a small dent in SA’s GDP growth as a result of an AGOA setback may also be minimal and is manageable.

Yet it also comes at a stage in SA’s business cycle when the recent medium-term budget reduced its 2026 growth forecast to 1.2% from the earlier 1.6%. The economy still faces the challenge of breaking out of its present narrow 1%-2% growth corridor and without putting the jobs at risk which loss of the AGOA preferences would pose. To retain the AGOA preferences would therefore be supportive. Nonetheless, US-SA economic relations outside the AGOA framework still remain valuable for both countries.

But SA is not without remedies or options. Even if the AGOA preferential access for SA now should continue, the uncertainty that continually surrounds it emphasises why SA must in any event accelerate its broad diversification strategy. This includes leveraging China’s zero-tariff scheme, expanding trade opportunities through the African Continental Free Trade Agreement, and negotiating trade deals with growing economies like India. Any loss of competitive edge for certain key SA economic sectors in the US must be offset by a vigorous diversification approach that exploits the wider opportunities emerging from a rapidly changing geoeconomic order’.