South Africa is next on the list of Global South countries that the US intends to isolate for failing to join the anti-Russia club and denounce Russia's involvement in the Ukrainian war.

President Cyril Ramaphosa's July statement that detaining Russian President Vladimir Putin if he attends an economic summit in Johannesburg next month would be tantamount to a "declaration of war" on his country fanned the flames. This statement contributed to the escalation of tensions between South Africa and the Western bloc.

This prompted much concern in Washington and the European Union (EU) because the International Criminal Court (ICC) issued a warrant for Putin's arrest in relation to his alleged war crimes during Russia’s operation in Ukraine. It was anticipated that Putin would be arrested if he visited the African nation primarily because SA is a signatory to the Rome Statute that established the ICC.

The US-led Western club is now disparaging SA as a "rogue state" that deserves a dose of its own medicine for allegedly arming Russia, amid rumors that Pretoria has been cozying up to Moscow despite the opposition of the US and Western powers.

US lawmakers suggested that South Africa should be penalized with commercial measures such as rescinding the import incentives, taxes, and duty exemptions granted to South African exporters under an act to hurt its economy.

Former World Bank President David Malpass warns that South Africa's "dangerous game" of pitting nations against one another could harm relations with the US. In a satellite TV talk program, Malpass stated that countries, such as Russia and China, are exploiting the "immense" security concerns in Africa, adding that the US engagement with Africa has ceased and these countries are filling the voids left by the US.

South Africa denied it, but the US stood its ground

Pretoria found itself in hot water in May when US Ambassador to South Africa Reuben Brigety revealed to reporters that he had a hunch that arms consignments were loaded onto a Russian cargo ship, the Lady R, from the Simon's Town naval base in Pretoria back in December last year.

Despite President Cyril Ramaphosa's denial of supplying arms to Russia and the announcement of an independent inquiry into the issue, it seems like US lawmakers are hell-bent on teaching Pretoria a lesson by terminating the facilities granted under the African Growth and Opportunity Act (AGOA).

The US government and many observers have a bone to pick with South Africa's claim of being neutral in the war between Russia and Ukraine. Critics reckon that the South African government's moves, such as warming up to Russia with military drills, loading enigmatic cargo onto the Russian vessel, and turning a blind eye to the Russian operation in Ukraine, show clear favoritism toward Russia, which is seen as detrimental to US interests.

The US lawmakers’ plea

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In a letter sent to Secretary of State Antony Blinken, the US lawmakers suggested that Pretoria be taken off the list of countries that get special treatment and benefits as part of the US economic relationship with Sub-Saharan Africa under the Act. The lawmakers stated that South Africa's "aid" to Russia, which allegedly included the supply of weapons to Moscow, cast doubt on its eligibility to receive trade benefits from the US under a law that enhanced US market access to qualifying sub-Saharan African nations.

A bipartisan group of US lawmakers not only wants South Africa's AGOA membership canceled, but they also propose to the US administration to change the venue for the upcoming AGOA summit scheduled to be held in November this year. South Africa is all set to roll out the red carpet for the AGOA summit later this year.

According to the letter from US lawmakers, shaking things up and moving the meeting to a different nation in November would demonstrate that the US is staunchly supporting Ukraine and would not tolerate its trading partners backing Russia's "relentless and savage invasion."

What is AGOA?

The AGOA was enacted in 2000 and has since played a significant role in shaping US economic policy and fostering business relations with Africa. It grants duty-free access to more than 1,800 products for the US market from the qualified nations in sub-Saharan Africa. This is in addition to the existing Generalized System of Preferences program, which already allows duty-free access to over 5,000 products.

To satisfy the stringent qualifying criteria set forth by AGOA, sub-Saharan nations are required to either develop or demonstrate ongoing progress in establishing an economy based on market principles, adherence to the rule of law, political plurality, and the guarantee of due process. Furthermore, nations must remove obstacles to trade and investment from the US, implement measures aimed at alleviating poverty, address issues of corruption, and safeguard the fundamental rights of individuals.

The US claimed that the Act has played a significant role in stimulating economic growth, fostering economic and political reform, and enhancing economic links between the US and the African region by creating fresh market prospects. In the year 2022, a total of 36 African nations were deemed eligible to receive benefits under the African Growth and Opportunity Act. Congress passed legislation in 2015 that modernized the program and extended it through 2025.

Implications for South Africa

If South Africa were to fall out of AGOA, it would be like opening a floodgate of higher tariffs for South African products entering the US market. It doesn't mean the products would be off the table for export to the US; however, if the prices were to skyrocket due to those pesky tariffs, it would put a damper on South Africa's export industries, as its exports would become uncompetitive in the US markets. South Africa’s exports to the US through AGOA were estimated at $3 billion last year. The US is South Africa’s second-biggest trade partner, next to China.

According to media reports, South African business groups are urging the government to make vigorous diplomatic efforts to safeguard the country's duty-free market access in the US. They fear disastrous financial consequences if Pretoria loses its duty-free status. They contend that the loss of this trade relationship would result in the loss of billions of rand in economic activity and tens of thousands of export-reliant jobs. It would be catastrophic for employment, especially in South Africa, where 70% of young people are unemployed.

Timing of the US accusations

The allegations of supplying Russia with weapons came just months before the BRICS summit in Johannesburg, which started today. The summit aims to brainstorm strategies on how to turn this loose group, which represents a significant portion of the global economy, into a powerful force that can rival the West's control over global affairs.

It is highly probable that Iran, along with other nations, will participate in the forthcoming BRICS summit scheduled to take place in South Africa on August 22nd. The projected expansion of the transcontinental organization has been foreseen for a considerable time.

Citing sources from the Indian government, the international media indicate that BRICS members have reached an agreement before the start of the summit to deliberate on the potential expansion of their memberships. However, there has been no official confirmation regarding the specific countries that may be included in the BRICS alliance during its 15th annual summit.

According to the South African BRICS ambassador, Anil Sooklal, a total of 22 nations, including Iran, Saudi Arabia, Argentina, and Egypt, have formally registered to become members of the BRICS organization. Additionally, another 22 countries have expressed informal interest in joining the bloc.