Bringing South Africa to its knees would be self-sabotage for the US

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The writer is the Minister of International Relations and Cooperation in South Africa

Since the advent of democracy in South Africa three decades ago, our mutually beneficial economic relations with the United States have surpassed expectations. Given the strong relationship between our countries, the recent introduction of a bilateral bill calling for the US to review its relations with South Africa is particularly disconcerting.  

The proposed bill, now in the House of Representatives, makes the claim that “the South African government has a history of siding with malign actors” and will consider whether South Africa “has engaged in activities that undermine US national security or foreign policy interests”. These sentiments do not reflect the strong relationship that exists between us, or the intention of the South African government to strengthen that relationship.

The bill also fails to acknowledge the right of all sovereign nations to develop and promote their own foreign policies. It criticises us for taking Israel to the International Court of Justice, where we argued that the actions of the Israeli military in Gaza violate international law and the Geneva Convention. In its ruling on provisional measures, the ICJ found “plausible” evidence that Israel was conducting a genocide against the Palestinians in Gaza.

It would be devastating to our mutual economic interests if the bill were to collapse bilateral relations. South Africa is the largest sub-Saharan African importer of US goods, and the largest source of foreign direct investment to the US from the African continent. In 2022, we exported three times more than the next country — Nigeria — to the US, making us the largest exporter on the continent.

Our bilateral investments have also been a welcome source of employment in both countries. There are approximately 22 South African companies currently investing in the US and employing 6,900 people. These include the Sasol investment in a petrochemical complex in Louisiana, which supported thousands of construction jobs. South Africa is home to more than 600 US companies across a range of sectors, employing approximately 134,600 people.

Seeking to bring South Africa to its knees almost amounts to self-sabotage for the US. We were a key driver in the formulation of the African Continental Free Trade Agreement and now of its implementation. Given that AfCFTA creates the largest single free trade area in the world, with 1.3bn people and a combined gross domestic product of $3.4tn, it would be advantageous for the US to capitalise on such opportunities, and work with us as a gateway to the continent. 

Associated with the US bill is the threat of removing South Africa from the African Growth and Opportunity Act (Agoa) under which almost 40 African countries benefit from tariff free access to the US market for certain goods. Agoa has been one of the most progressive development support policies initiated by the US in trade and industry. Our participation supports economic development in the southern African region and any attempt to exclude us will undermine regional integration and value chains. 

To take one example, our auto industry sources components from our neighbours, and exports the finished product to global markets, including to the US through Agoa. We get leather car seats from Lesotho, wiring harnesses from Botswana, copper wire from Zambia, and rubber from Malawi and Cameroon. These inputs from other African countries alone account for more than $200mn worth of products in the automotive value chain. The repercussions of losing Agoa membership will not only affect South Africa, but negatively impact the Southern African Development Community region as a whole.

In addition, South Africa is a significant supplier of critical minerals to the US. If we lose Agoa membership, it could have negative ramifications for the US. In the global fight against climate change, demand for critical minerals has become a significant factor. In 2021, the US imported nearly 100 per cent of its chromium from South Africa, as well as over 25 per cent of its manganese, titanium, and platinum. We also supply 12 of the 50 mineral products identified by the US Geological Survey as critical for US interests. 

We cannot afford for the proposed bill to undermine our mutually beneficial relationship. Since the demise of apartheid, the US and South Africa have forged positive bonds of friendship, growth, and development. We wish to see these grow and thrive in the future.