Citrus growers in South Africa are among the many companies most nervous that duty-and-quota-free exports to the United States could possibly be scrapped subsequent yr when Donald Trump takes workplace once more.

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The fruits are amongst 1 800 merchandise throughout 32 African international locations benefitting from preferential market entry below the African Growth and Opportunity Act (AGOA), with corporations in South Africa, Kenya, Nigeria and Ghana reaping probably the most {dollars} in earnings.

But with president-elect Trump having vowed to impose at the very least a ten p.c tariff on all imports to the United States, there isn’t a certainty that AGOA might be renewed.

Analysts say the laws, handed in 2000 and set to run out subsequent yr, could possibly be modified if not withdrawn altogether, with potential detrimental ramifications for corporations and jobs throughout Africa.

“We need this competitive edge,” Justin Chadwick, CEO of the Citrus Growers’ Association of Southern Africa (CGA), which additionally represents Zimbabwe and Swaziland-based orchards, advised AFP.

“Should South Africa be removed from AGOA, thousands of rural jobs could be impacted, as well as over a billion rand in export revenue could be lost,” he stated.

One meals producer within the Eastern Cape province advised AFP that if AGOA weren’t renewed, it will “kill” their enterprise.

The South African firm, which requested to stay nameless, stated it employed greater than 3 000 individuals and exported a median of 350 containers of sorbet merchandise per yr to the United States, the place they’re bought at a significant retailer.

Hope for the perfect

Another trade that would really feel the warmth if AGOA is shelved is the automotive sector, although some corporations are betting that US shoppers may settle for greater costs.

“I don’t foresee any major changes in the buying patterns of Americans around the products that we supply,” stated Ken Manners, managing director at SP Metal Forgings Group, a South African firm that exports automobile components to the United States.

Even if tariffs had been imposed, “it certainly wouldn’t be life-changing in terms of our ability to supply competitively,” he advised AFP.

“The product base that we supply in the US is very difficult to source anywhere else, so ultimately even if the US put higher tariffs, the US consumer would end up paying for it.”

Whether AGOA is renewed or not, it shouldn’t have a lot influence on the broader South African financial system, analysts stated, although corporations ought to nonetheless put together for adjustments.

“On the whole of the economy we’re not even talking one percent,” stated Johannesburg-based economist Dawie Roodt.

But “in an environment where the economy is hardly growing or growing very weakly, every little bit helps and adds up”, he stated.

In any case, “it won’t be business as usual,” stated Ronak Gopaldas of the London-based consultancy Signal Risk.

“The reality is that Trump and his economic policies are unpredictable, volatile and erratic. You don’t know how far on the extreme he’s going to go.”

“So I would say an effective strategy is to expect the worst and hope for the best,” he stated.

‘AGOA-lite’

Kenyan and Ghanaian corporations additionally profit considerably from AGOA, particularly within the textile trade.

Mukhisa Kituyi, a Kenyan politician who served as secretary-general of the United Nations Conference on Trade and Development, stated he believed the following US administration might push for a renegotiated AGOA fairly than a withdrawal.

“What America has been wanting… is restricting what they call third country rules of origin,” Kituyi advised AFP.

For instance, this might forestall corporations from bringing textiles from China or India, stitching them in Africa, after which promoting them to America as African garments.

“If they tighten the rules of origin, particularly on textiles and cars – as Trump is obsessed with the manufacturing of particular cars – we can see a diluted AGOA-lite going forward,” Kituyi stated.

Another query mark surrounds exports of vital minerals from the Democratic Republic of Congo, Zambia and Angola.

While the merchandise usually are not eligible below AGOA, central African international locations have obtained specific consideration and funding below President Joe Biden.

“Are these relations going to persist… or will we see a walking back, a radical overhaul, on some of the gains made?” Gopaldas stated.

Trump will in all probability “ignore Africa”, in line with Roodt, until international locations “get his attention for good or bad reasons”.

A figuring out issue prone to affect commerce relations is whether or not international locations are seen as geopolitically aligned with the United States.

This could possibly be a problem for a lot of African governments which have proven assist in direction of Russia and China or criticised Israel.

Having accused Israel of “genocide” in Gaza on the UN’s high courtroom, South Africa specifically must “walk a tightrope,” Gopaldas stated, “if the US becomes more explicit about being ‘with us or against us’.”

By Garrin Lambley © Agence France-Presse