As the 2016 U.S. presidential election draws closer, the world waits in heightened anticipation for the outcome of one of the most talked-about elections in recent memory.
With its many complexities and huge doses of drama and controversy, the election is nothing short of attention-grabbing. But beyond the entertainment value of the campaign trails and the subsequent social media fodder, we need to care more about the potential effects the outcome of the election may have on South Africa.
As the largest economy in the world, the U.S. is one of South Africa’s biggest trade partners. Any political decision in the United States affects us and the rest of the world on many levels. Although both candidates, Hillary Clinton and Donald Trump haven’t said much about Africa in their foreign policy speeches, it’s possible the election will affect the SA-US trade relations. While Trump and Clinton are fierce rivals on all levels, the two presidential hopefuls are united by one thing: their opposition to free trade.
America’s wavering devotion to free trade has tongues wagging. What does this growing protectionist attitude on international trade mean for the global economy? More pertinently, what does it mean for African countries like South Africa that have enjoyed good relations with the U.S. through trade agreements like The African Growth and Opportunity Act (Agoa)?
While it’s hard to predict at this point what the next president of the United States might mean for South Africa and the continent at large, the possible impact cannot be ignored. Of the two candidates, Clinton is perhaps less likely to sour the trade relations between SA and the U.S. Chris Gilmour, Investment Analyst with Absa Wealth & Investment Management, agrees. “If Clinton wins the presidential race, I think it would be very much business as usual,” states Gilmour. “The Democrats have probably had better relations with SA than the Republicans, going back many decades. A few Democrats have visited South Africa, including Jimmy Carter and John F. Kennedy’s brother Robert F. Kennedy.”
Additionally, Clinton, as secretary of state during the first Obama administration, showed enthusiasm towards Agoa, advocating for the agreement’s 10-year extension in 2015. Given her initial stance on international trade, Clinton would probably be more inclined to maintain the good relations South Africa has with the world’s economic giant. As Gilmour puts it, “she might even be more inclined to direct investment towards Africa.”
But what would a Trump presidency mean for South Africa? While his brash declarations on international trade have so far been primarily directed to only China and Mexico, Trump’s position on Africa remains a mystery. “Republicans haven’t been particularly disposed to South Africa and Africa. The U.S. might be more inclined to take a harder stance under the Republican administration. But Trump would probably delegate so much that you wouldn’t even recognise his hand anywhere,” says Gilmour.
Gilmour also believes that while we may not necessarily see a negative impact, we shouldn’t hold our breath for a positive impact under a Trump presidency. But whatever the outcome of the election will be, we’ll feel the effect. Or maybe not. Come November 8 and we’ll know for sure.
Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.
Source: Absa – Written by Moza Moyo
