South Africa offers to import LNG from United States for 10 years as part of deal proposed to Washington - ministerial statement

South Africa offers to import LNG from United States for 10 years as part of deal proposed to Washington - ministerial statement

South Africa has proposed a significant trade agreement with the United States, aiming to import liquefied natural gas (LNG) for a decade. This initiative is part of broader efforts to repair strained relations and boost economic ties between the two nations. The proposal, announced by South African cabinet minister Khumbudzo Ntshavheni, seeks to mitigate South Africa's trade deficit with the United States, which has threatened to impose 30-percent tariffs [1].

Under the terms of the deal, South Africa would import LNG from the United States for 10 years. In exchange, South Africa would avoid paying duties on exports of 40,000 vehicles annually to the United States. Additionally, the United States would invest in South Africa's gas infrastructure development, including fracking. South Africa, in turn, would be able to export 40,000 vehicles, 385,000 tonnes of steel, and 132,000 tonnes of aluminium to the United States without duties. The deal is expected to yield around $900 million to $1.2 billion in trade annually [1].

The proposal comes after a tense meeting between South African President Cyril Ramaphosa and his US counterpart, Donald Trump, at the White House last week. The meeting aimed to reset plummeting relations and save trade ties vital to South Africa's sputtering economy. Ramaphosa's spokesman, Vincent Magwenya, confirmed that the trade deal proposal was presented to the US Trade Representative (USTR) for consideration and further negotiations [1].

Ramaphosa highlighted the potential to increase and diversify trade between the two countries in various sectors, including gas, mining, critical minerals, agriculture, and nuclear products. The proposed deal also includes duty-free imports of automotive components from South Africa for US car production [1].

The agreement also includes a commitment from the United States to attend a summit of the Group of 20 leading economies in Johannesburg in November. Trump had previously threatened to skip the meeting, which South Africa will host under its presidency this year [1].

Ramaphosa's visit to Washington is part of a broader effort to mend frayed relations with the Trump administration and promote investment opportunities for South African industries. The visit comes amidst a backdrop of tense diplomatic relations, including criticism of South Africa's land reform program and its genocide case against Israel at the International Court of Justice [2].

The proposed LNG import deal is a strategic move for South Africa, aiming to secure a reliable energy source while bolstering its trade relations with a major economic partner. The deal's success will depend on further negotiations and the willingness of both nations to commit to the proposed terms.

References:
[1] https://www.ndtv.com/world-news/south-africa-to-buy-gas-from-us-in-proposed-new-trade-deal-worth-1-billion-8512588
[2] https://eastleighvoice.co.ke/south+africa+president+donald+trump-south+african+president+cyril+ramaphosa/152556/ramaphosa-lands-in-washington-to-repair-south-africa-us-ties