Analysts have highlighted that while the extension of the African Growth and Opportunity Act (AGOA) by the United States this week provides short-term certainty, the one-year term limits longer-term planning for businesses of all sizes.
Trade and industrial policy expert Saul Levin, executive director of Trade and Industrial Policy Strategies, has warned that while the extension offers relief for SA business, it should not be mistaken for long-term security.
South African businesses exporting to the United States have received short-term relief after President Donald Trump signed a one-year extension of the AGOA into law this week.
“The direction of US trade policy suggests a move away from broad preferential schemes toward more selective market access,” Levin said.
Small agricultural producers, agro-processors, textile manufacturers and niche craft exporters are among those who benefit most from duty-free access, as even modest tariffs can erode already thin margins.
Trade analyst Donald Mackay of XA Global Trade Advisors has noted that uncertainty around AGOA makes it harder for exporters,particularly smaller ones to secure financing and long-term contracts.
“SMMEs need predictability to invest in production, compliance and logistics. A one-year horizon is extremely tight when you’re trying to build or scale an export business,” Mackay argued.
Export-oriented SMMEs often face long lead times to secure certifications, meet US standards and establish buyer relationships, making policy instability especially disruptive.
Although AGOA is often associated with large exporters, its benefits extend deep into local value chains. Small manufacturers, logistics firms and service providers that supply export-focused companies rely indirectly on continued access to the US market.
In agriculture, exporters of citrus, nuts, wine, and processed foods from small-scale farmers to large producers rely on AGOA.
Agriculture Minister John Steenhuisen has previously warned that losing duty-free access under AGOA would be a severe blow to export-oriented agricultural sectors, with consequences filtering down to smaller producers and workers across supply chains.
The short extension has intensified calls for South African businesses to adopt what experts describe as a “post-AGOA mindset”.
While the AGOA renewal provides short-term relief, exporters of all sizes remain exposed to structural risks and uncertainty beyond December 2026, making strategic planning and market diversification critical.
Trade analysts argue that businesses should use the remaining window to diversify export markets, including opportunities under the African Continental Free Trade Area (AfCFTA), as well as in Europe, the UK and the Middle East.
Minister of Trade, Industry and Competition Parks Tau also noted the ongoing engagement with the US on broader trade matters saying they continue to engage constructively and believe that a healthy trade relationship benefits both countries.
AGOA, first enacted in 2000, covers over 6 000 products, including agricultural produce, manufactured goods, automotive components, and textiles. Both large and small exporters benefit from this preferential access, and many smaller firms participate both indirectly or direct through value chains supplying larger exporters.
Tau welcomed the extension, saying it provides temporary predictability for exporters but raised concern that “the short nature of the extension and we hope the United States will use this opportunity provided by the short extension towards a programme that will provide certainty around investment and purchasing decisions.”.
Azwi@vutivibusiness.co.za
