EWC places AGOA at risk

EWC places AGOA at risk

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Rarely does foreign policy feature in South Africans’ public debate, and when it does – invariably in response to some exceptional global event – it tends to manifest itself in bursts of intense argument among small groups of thought leaders, with wider circles in society taking up positions around them.

Anger and righteous indignation are the signifiers of these engagements.

These are typically also the big issues, the contentious global stuff: Donald Trump, American elections, the Middle East. But for many South Africans, an inbuilt parochialism means that the invariable frame of reference for events well beyond our borders is South Africa’s history. We see things as we choose to see them, but with little expectation that this will intrude into our daily lives.

Over the past two years, however, foreign policy has become a more immediate and pronounced concern. The big issue was Russia’s war on Ukraine, and the position that the South African government took on it – ‘non-aligned’, though with sympathies transparently directed towards Moscow. More than a moral issue or even geopolitical issue – whether South Africa was on ‘the right side of history’, or what set of factors motivated its choices – this was a rare instance in which the country’s people had to confront the possible impact of this on their lives. The global economic disruption caused by the invasion hit South Africa’s harried consumers in their pockets, and the alienation of Western powers – significant trading partners and the dominant investors for South Africa – held the prospect of severe collateral damage. 

Foremost in focus was South Africa’s participation in the US’ African Growth and Opportunity Act, (AGOA) summit which South African will be hosting next month. 

Described on its official website as being at ‘the core of U.S. economic policy and commercial engagement with Africa’, AGOA is a programme extending substantial trade access to goods from participating countries in Sub-Saharan Africa.  Note that this is not a trade deal: it is a unilateral measure codified by an Act of the US Congress. 

AGOA mirrored some of the thinking that became current in the 1990s that Africa’s economic crisis was intimately linked to failings in governance, and aid was inadequate in assisting in overcoming developmental deficits. The US offered market access to countries that were making progress towards particular goals: a market economy, the rule of law, democratisation, accountability and respect for human rights. (There were many similarities here with the New Partnership for Africa’s Development, NEPAD, that was championed by leading African statesmen, including then President Thabo Mbeki.)  It also wanted to see barriers to US trade and investment flows reduced and added that countries that threatened US security or geopolitical interests would not be eligible.

Clearly, a major part of AGOA was to encourage a posture by its recipients that would be congenial to the US, but what it was offering was for many countries worth making this accommodation. And it wasn’t until the Ukraine war that South Africa had taken a course that the US viewed as fundamentally hostile. It may come to think the same in respect of South Africa’s positioning on Israel and Hamas.

 SA pinning hopes on US Congress to extend Agoa deal

This has already surfaced, with a letter signed by lawmakers of both American parties calling for the upcoming summit to be rescheduled. South Africa, the letter noted, had adopted positions opposed to US interests and it needed to see some consequences. That South Africa will still host the conference demonstrates that it has staved off those consequences for now.

South Africa’s internal politics may be a more decisive factor here. Since 2018, very little in policy terms has been more doggedly pursued than Expropriation without Compensation (EWC). Initially, this took the form of a drive to amend the Constitution. This had less to do with the practicality of seizing property (as EWC proponents asserted that the Constitution already permitted this), than with signalling a revolutionary intent. This in itself was sinister: turning the country’s founding document into a political punching bag.

The EWC narrative held that land reform was a short-cut to prosperity, that there was a public clamour for it (‘land hunger’), and that expanded state power and discretion would ensure this. None of this held true. The likely endgame, as the IRR warned, was a move to the mass confiscation of all land – the custodianship principle – for which there was considerable and vocal support within the ANC. And it was on this that the amendment failed – the EFF wanted this established as a stipulation in the constitutional amendment, but the ANC favouring an incrementalist approach.

Nevertheless, this was never the sum of the process, nor even the most important part. The proposed constitutional amendment was paired with new legislation on expropriation, which would provide explicitly in law for expropriation at ‘zero’ compensation as well as weighting the process in favour of the state. The Expropriation Bill currently sits before the National Council of Provinces.

Once passed, this will place a powerful weapon in the hands of a state that has shown itself to be deeply compromised, and a government within which strong impulses of ideological hostility towards private property are evident.

This has implications for AGOA. Its eligibility criteria require, among other things, a ‘market-based economy that protects private property rights, incorporates an open rules based trading system, and minimizes government interference in the economy through measures such as price controls, subsidies, and government ownership of economic assets’.

The creeping intrusion on property rights has not passed unnoticed. Towards the end of last month, the US Congress noted this threat in hearings on South Africa. Not just a matter of South Africa’s future prospects, but as a matter of its future and constitutional democracy. Congressman John James, who chaired the meeting stated, accurately: ‘There is no country in the world that has remained democratic after removing its population’s private property rights and I remain concerned about the ANC’s democratic drift away from constitutional rule’.

All of this augurs poorly for South Africa’s continued participation in AGOA. This is no small matter. In 2021, AGOA related exports were worth something in the region of $2.7bn. It is of great value to South Africa’s hard-pressed agricultural economy, and also – importantly given the government’s industrial policy – for manufactured goods, such as automotive parts. 

There is a great deal at stake here. Domestic choices have global repercussions with domestic consequences – in this case, that South Africa cannot afford. 

Terence Corrigan

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