Trade and Investment
South Africa- United States relations
South Africa and the United States (US) enjoy a solid and cordial relationship underpinned by robust political and economic interests with cooperation on regional and global issues. South Africa and the United States have extensive bilateral relations that cover a wide spectrum of issues, which are aligned to South Africa’s domestic priorities. These include trade and investment, tourism, transport, technology transfer, defense, safety and security, environment, agriculture, science and innovation education and health cooperation.
The United States is a strategic partner for South Africa and a major export market for value- added products, a significant source of foreign direct investment (FDI), technology transfer, tourism, and development assistance.
South Africa enjoys preferential trade benefits under the African Growth and Opportunity Act (AGOA) as well as the US Generalized System of Preferences (GSP) trade preference program. The benefits that South Africa receives through AGOA have resulted in the creation of approximately 62,000 jobs.
Technology transfer between the two countries covers a range of areas including but not limited to economic recovery, science and innovation, education, agriculture, military and health through training, funding, research and innovation between governments, institutions, and private sectors.
The Economic and Commercial Affairs Office at the South African Embassy in Washington, DC is the representative office of the South African Department of Trade, Industry and Competition (the dtic).
The primary focus of the Economic and Commercial Affairs Office is to raise the level of trade between South Africa and the United States, to expand U.S. foreign direct investment into South Africa and to nurture the bi-lateral South Africa-United States economic relationship.
We seek to nurture and expand the bi-lateral South Africa-United States economic relationship through:
- Lowering of barriers to trade between South Africa and the U.S.
- Holding dialogue and strategic discussions on trade and investment between our two countries within the parameters of the Trade and Investment Framework Agreement (TIFA) which was signed between the governments of South Africa and the U.S.
- Holding consultative discussions and cooperative work on a diverse range of trade issues centered on customs cooperation, technical barriers to trade, sanitary and phytosanitary measures, and trade and investment promotion via the Trade, Investment, and Development Cooperative Agreement (TIDCA) which was signed between the Southern Africa Customs Union (SACU) and the U.S. South Africa is a member of SACU.
- Remaining engaged and safeguarding South Africa’s eligibility for the African Growth and Opportunity Act (AGOA) which is a U.S. trade preference program providing duty-free treatment into the U.S. market.
In collaboration with Trade and Investment South Africa, we promote the export of South African value-added goods and services to the United States through:
- Assisting U.S. companies to source products and services from South Africa by identifying potential suppliers for U.S. importers and buyers.
- Assisting visiting U.S. buyers to South Africa with locating suppliers and arranging meetings
- Assisting South African exporters with relevant market intelligence that will enable them to understand and access the U.S. market
- Assisting South African exhibitors at trade shows
- Promoting South African products and services at business events.
Trade in goods
- In June 2023, the US ranked 2nd largest destination for SA’s exports after China and followed by the UK. As a source of imports, the US ranked 2nd after China and followed by Germany.
- Bilateral trade increased to US$21.4 billion in 2021, from US$15.9 billion in 2020 and US$13.3 billion in 2019. US imports from SA increased to US$15.9 billion in 2021, from US$11.5 billion in 2020 and US$7.9 billion in 2019. While US exports to SA, increased to US$5.5 billion in 2021, from US$4.4 billion in 2020 and US$5.4 billion in 2019.
- Major South African exports to the U.S. include: Precious stones and metals, motor vehicles, parts and accessories; iron and steel, machinery; aluminium products, ores , organic chemicals, edible fruit, chemical products and nickel products.
We promote U.S. foreign direct investment into South Africa through:
- Providing linkages to investment opportunities in South African sectors and industries
- Assisting U.S. investors to navigate the South African business/investment environment
- Assisting U.S. investors with site visits, logistical arrangements and program coordination
- Providing information on available investment incentive packages
- Bi-lateral South Africa-United States economic relationship.
- According to the US Bureau of Economic Analysis, bilateral FDI between South Africa and the US stood at US$11.7 billion in 2021, which is lower than US$12.2 billion in 2018.
- In 2017, South Africa received US$8.1 billion worth of direct investment from the US, which declined to US$7.5 in 2021.
- South Africa outward direct investment to the US has grown from US$3.1 billion in 2017 to US$4.1 billion in 2021.
- There are approximately 22 South African companies currently investing in the US employing, 6 900 people, including the Sasol investment in gas to liquid facility in Louisiana, creating approximately 1 200 permanent jobs and 7000 construction US jobs.
- South Africa is home to more than 600 US companies across a range of sectors, which according to the US Bureau of Economic Analysis employ approximately 134 600 people in South Africa.
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Bilateral Economic Relations
Bilateral economic relations between South Africa and the United States are characterised by a mutually beneficial relationship underpinned by several bilateral agreements, including the amended Trade and Investment Framework Agreement (TIFA), which was signed in 2012. In 2022, the two countries enjoyed a total two-way goods trade of $18.35 billion. It is estimated that approximately 600 American businesses operate in South Africa, and many of those use South Africa as a regional headquarters. Equally, there are a couple of South African businesses that are operating in the United States. South Africa qualifies for preferential trade benefits under the African Growth and Opportunity Act (AGOA) as well as the U.S. Generalized System of Preferences trade preference program. South Africa is due to host the next AGOA Forum in 2023, which is a Forum that would allow the United States and all AGOA-eligible countries to reflect on ways to promote and expand trade. In addition, South Africa belongs to the Southern African Customs Union, which signed a Trade, Investment, and Development Cooperative Agreement (TIDCA) with the United States in 2008. The United States and South Africa have a bilateral tax treaty that prevents double taxation and fiscal evasion.
The African Growth and Opportunity Act (AGOA)
The African Growth and Opportunity Act is a piece of legislation that was passed by the United States (U.S.) Congress in May 2000. It provides eligible sub-Saharan African countries with duty-free access to the U.S market for over 1,800 products, in addition to the more than 5,000 products that are eligible for duty-free access under the Generalised System of Preferences program. The dialogues will provide a platform for exporters to gain a deeper understanding of AGOA and its immense potential to drive trade and investment in the region.
U.S.-South Africa Trade Facts
In 2022, South Africa GDP was an estimated $405,8 billion (World Bank); and the population was estimated at 60,6 million. (Source: Statistics South Africa)
U.S. goods and services trade with South Africa totalled an estimated $18.35 billion in 2022. Exports were $10.47 billion; imports were $7.8 billion. (Source: South African Revenue Service).
The Mission of the Department of Trade, Industry and Competition (dtic) is to:
- Promote structural transformation, towards a dynamic industrial and globally competitive economy
- Provide a predictable, competitive, equitable and socially responsible environment, conducive to investment, trade and enterprise development
- Broaden participation in the economy to strengthen economic development
- Continually improve the skills and capabilities of the dtic to effectively deliver on its mandate and respond to the needs of South Africa’s economic citizens
- Co-ordinate the contributions of government departments, state entities and civil society to effect economic development
- Improve alignment between economic policies, plans of the state, its agencies, government’s political and economic objectives and mandate
InvestSA is a division of the South African Department of Trade, Industry Competition (the dtic). It supports investors exploring opportunities in South Africa by helping with information, facilitation and aftercare. One Stop Shop provide practical assistance to streamline the process of setting up a business.
Mr. Gerbrand Haasbroek
Mr Oarabile Motlhaga
Second Secretary Socio Economic