It is unlikely that a solve-it-all reset deal will emerge from the meeting between President Cyril Ramaphosa and President Donald Trump at the White House later today.
For South Africa the stakes are high, and Ramaphosa is under domestic pressure to show a win. With all the rhetoric from ANC cadres in recent days about standing up to Trump, refusing to be bullied and maintaining the country’s sovereignty it would seem that SA does not have to give away anything.
Yet SA has little or no leverage over the US. Even the threat that excessive US pressure on SA might drive the country further into the arms of Russia, China and Iran would not unnerve the US into dropping its new tough stance on SA. Our BRICS club is unlikely to stand up for us against the US.
Trump is under no pressure to reach a deal, and the US can continue at very little cost by pursuing its tough stance toward SA and increasing the pressure.
Ramaphosa needs to claim he has got something out of his Washington trip to show a domestic audience that he is effective, at a time when his party is faltering and there is poor service delivery and job creation at home.
In contrast to our absence of leverage, Washington could exercise immense pressure over us in many ways. However frayed the US alliances might seem, Washington could turn its friends against us, with the result that we would face growing international isolation.
Europe is only a very partial safety-net for SA in the event of rising pressure from the Trump administration. The Europeans would not risk even considering annoying the Trump administration by building close ties with a country Trump regards as a renegade.
On the key issues, what we want from the US is very different from what the Trump administration wants.
Political demands
A big win for Ramaphosa would be a reduction in the current 9.4 percent US effective tariff rate on imports from SA. But why should the Trump administration give way on this, when it has a list of political demands it has put at the forefront of its policy toward SA?
And many other countries face tariff rates well over the new ten percent basic rate imposed by the US. We probably have to accept that our continued inclusion in the preferential trade arrangement, the Africa Growth and Opportunity Act, is now unlikely, as the scheme is really meant for low-income countries.
Trump could make our lives a lot more difficult by further raising tariffs and isolating us where he can. There is no better alternative than a deal with the US.
Further moves toward China and Russia, together with expropriation without compensation and racial employment laws on the books, do not offer us much of an economic future. With the US and sound laws to encourage investment, our potential could be immeasurably greater, giving us access to a far bigger trade and investment pool.
Having the US on our side, or at least having a cordial relationship, would make things a lot easier and smoother for SA. Without at least a re-set in relations with the US, we cannot get as much done as we otherwise could.
It would also make it somewhat easier for us if USAID for HIV/AIDS programmes is restored.
Ramaphosa would also like to see a deal that ends Trump’s rhetoric about a genocide against white farmers, and the offer of refugee status to minorities. Whether true or not, the accusation has deeply irked the ANC.
And Ramaphosa would also like to see Trump attend the G-20 Summit in Johannesburg later this year. That would help bolster SA’s and Ramaphosa’s own diplomatic standing. But it is not as though the US would suffer a great loss if it failed to attend the G-20 meeting.
For Trump, who sees world politics as a game between the great powers, South Africa is of marginal importance. Besides, there are bigger and more urgent geo-political issues like the Russia-Ukraine war and the Middle East. The US has gone ahead and tried to broker a peace deal between Rwanda and the Democratic Republic of the Congo, without any involvement from SA. The US administration focused on helping broker a peace deal because the region has large deposits of rare earth minerals. That’s a sure message that the US just does not really need us.
Little leverage
Even our platinum gives us little leverage. With our platinum reserves estimated to be around 80 percent of the world total, and with possible offshore oil and gas opportunities, we are of some strategic importance. Platinum is important to the car industry and in electronics, but if South Africa chose to halt exports of the metal, we alone would incur a substantial cost. The US recycles around 30 percent of the platinum it uses and there are other sources, albeit not as large as ours.
If South Africa is important to Trump, it is because of our mineral wealth and the access it provides to wider African resources. And Trump seems keen to take his domestic fight against diversity, equity and inclusion policies onto the international stage by taking on South Africa.
So far there is little interest from the US in natural resource projects in SA. A deal with Trump could pave the way to generating stronger investment. But what would Ramaphosa have to give up? In recent days there have been suggestions that SA could grant US companies oil and gas concessions in exchange for a deal.
For Trump, an active US interest in potential SA natural resource concessions would have to be preceded by an end to empowerment requirements. This is the big and tricky stumbling block for any deal, and one at which the ANC shudders. The ANC knows full well that any compromise on empowerment ownership requirements would make it necessary to extend this concession to others. That would pave the way for the possible scrapping of a defining aspect of the ANC project.
Partial deal
If Solly Malatsi, the DA Minister of Communications and Digital Technologies, allows Starlink, the satellite internet service provider owned by Elon Musk, to operate in SA without having to give away a 30 percent interest to empowerment interests, we could see a partial deal.
This is all speculation, but one possibility is that in a multifaceted reset deal, Trump would drop his insistence that a genocide is taking place in SA. But that would possibly be in exchange for SA withdrawing its charge of genocide against Israel in the International Court of Justice.
At the end of today’s meeting both Ramaphosa and Trump may declare wins, but verifying these might not be possible. What Ramaphosa wants to avoid is any ignominious backdowns that are forced on him.
[Image: https://picryl.com/media/white-house-grounds-in-spring-d91fc7]
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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