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African Growth and Opportunity Act

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The African Growth and Opportunity Act, or AGOA (Title I, Trade and Development Act of 2000; P.L. 106–200)[2] is a piece of legislation that was approved by the U.S. Congress in May 2000. The stated purpose of this legislation is to assist the economies of sub-Saharan Africa and to improve economic relations between the United States and the region.[3] After completing its initial 15-year period of validity, the AGOA legislation was extended on 29 June 2015 by a further 10 years, to 2025.[4]

African Growth and Opportunity Act
Great Seal of the United States
Other short titlesUnited States-Caribbean Basin Trade Partnership Act
Long titleAn Act to authorize a new trade and investment policy for sub-Saharan Africa, expand trade benefits to the countries in the Caribbean Basin, renew the generalized system of preferences, and reauthorize the trade adjustment assistance programs.
Acronyms (colloquial)AGOA
NicknamesTrade and Development Act of 2000
Enacted bythe 106th United States Congress
EffectiveMay 18, 2000
Citations
Public law106-200
Statutes at Large114 Stat. 251
Codification
Titles amended19 U.S.C.: Customs Duties
U.S.C. sections created19 U.S.C. ch. 23 § 3701 et seq.
Legislative history
President George W. Bush signs into law the African Growth and Opportunity Act (AGOA) of 2004 in the Dwight D. Eisenhower Executive Office Building Tuesday, July 13, 2004.

History

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The African Growth and Opportunity Act (AGOA) was the brainchild of Congressman Jim McDermott (a former Foreign Service medical officer based in Zaire), and his Chief of Staff, Michael Williams.[5][6] McDermott,[7] along with Congressman Ed Royce, helped move the earliest versions of the legislation through Congress.[8] Later Rosa Whitaker, who served as the first ever Assistant U.S. Trade Representative (USTR) for Africa in the administrations of Presidents William J. Clinton and George W. Bush, helped develop and implement the law.

Passage of the legislation followed nearly a decade of leadership on the part of activists such as Paul Speck at Environmental and Energy Institute, Witney Schneidman, Steve Lande, Mel Foote, Tony Carroll, Claude Fontheim, and Mark Neuman, and others.[9] AGOA was signed by President Clinton into law in May 2000. The legislation was reviewed again in 2015, was extended for 10 years following contentious debate. The revisions made it easier to become eligible and focused on improving the future business environment in developing African countries.

The scheduled expiration in 2025 makes the future of U.S.–Africa relations uncertain. In part, this is due to a changing trade environment with respect to Africa; for example, intracontinental and intercontinental economic integration have increased significantly. Similarly, following the conclusion of economic partnership agreements between the European Union and African, Caribbean, and Pacific (ACP) countries, trade ties are shifting from unilateral preferences to reciprocal relations. In order for African producers and manufacturers to become more fully integrated into supply chain networks, it may be beneficial to consider restructuring U.S.–Africa economic relations outside of the AGOA. The United States and sub-Saharan African countries have already discussed potential post-AGOA policy architectures.[10]

In November 2023, President Joe Biden urged for the removal of Gabon, Uganda, Niger, and the Central African Republic from AGOA, citing human rights violations.[11]

Eligibility

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The legislation authorized the President of the United States to determine which sub-Saharan African countries would be eligible for AGOA on an annual basis. The eligibility criteria were to improve labor rights and movement toward a market-based economy. Each year, the President evaluates the sub-Saharan African countries and determines which countries should remain eligible.

Having AGOA eligibility does not imply automatic eligibility for a "Wearing Apparel" provision. To export apparel and certain textile to the United States under the AGOA duty-free, an eligible country must have implemented a "Visa System" that satisfies American authorities and proves compliance with the AGOA Rules of Origin.

A country "graduates" from AGOA and thereby loses eligibility if it becomes a "high-income" country as defined by the World Bank.

Countries' inclusion has fluctuated with changes in the local political environment. In December 2009, for example, Guinea, Madagascar, and Niger were all removed from the list of eligible countries; by October 2011, though, eligibility was restored to Guinea and Niger, and by June 2014, to Madagascar as well. Notice was given that Burundi would lose its AGOA eligibility status as of 1 January 2016.[12] In August, 2017, Togo was recognized as an eligible country.[13][14]

On January 1, 2022, the United States removed Ethiopia, Mali and Guinea from the AGOA programme over alleged human rights violations and recent coups. In a statement the US Trade Representative explained the removal was “due to actions taken by each of their governments in violation of the AGOA Statute”.[15] Burkina Faso lost its eligibility in 2023 due to successful coups in January and September.[16] As of January 1, 2023, 35 countries are eligible to participate in AGOA.[17]

Eligibility Status as of January 1, 2024
Country Currently Eligible Notes on Suspension
  Angola Yes
  Benin Yes
  Botswana Yes
  Burkina Faso No Suspended on January 1, 2023 following coup d'états in January and September.[16]
  Burundi No Suspended on January 1, 2016, following the Nkurunziza re-election controversy[18]
  Cabo Verde Yes
  Cameroon No Suspended on January 1, 2020, for human rights abuses[19]
  Central African Republic No Suspended on January 1, 2024 for human rights abuses.[20]
  Chad Yes
  Comoros Yes
  Republic of the Congo Yes
  Democratic Republic of the Congo Yes
  Côte d'Ivoire Yes
  Djibouti Yes
  Equatorial Guinea No Graduated AGOA on January 1, 2011[21]
  Eritrea No
  Eswatini Yes
  Ethiopia No Suspended on January 1, 2022, over concerns of human rights violations in the Tigray War[22]
  Gabon No Suspended on January 1, 2024 for human rights abuses.[20]
  The Gambia Yes
  Ghana Yes
  Guinea No Suspended on January 1, 2022, following the 2021 Guinean coup d'état[22]
  Guinea-Bissau Yes
  Kenya Yes
  Lesotho Yes
  Liberia Yes
  Madagascar Yes
  Malawi Yes
  Mali No Suspended on January 1, 2022, following the 2021 Malian coup d'état[22]
  Mauritania No Suspended on January 1, 2019, over a failure to address forced labor[23]
  Mauritius Yes
  Mozambique Yes
  Namibia Yes
  Niger No Suspended on January 1, 2024 for human rights abuses.[20]
  Nigeria Yes
  Rwanda Partial AGOA apparel benefits suspended on July 31, 2018, in response to the banning of second-hand clothing imports[24]
  São Tomé and Príncipe Yes
  Senegal Yes
  Seychelles No Graduated AGOA on January 1, 2017[21]
  Sierra Leone Yes
  Somalia No Has never requested designation as an AGOA beneficiary country[25]
  South Africa Yes
  South Sudan No Suspended on January 1, 2015[26]
  Sudan No Has never requested designation as an AGOA beneficiary country[25]
  Tanzania Yes
  Togo Yes
  Uganda No Suspended on January 1, 2024 for human rights abuses, including the Anti-Homosexuality Act of 2023.[20]
  Zambia Yes
  Zimbabwe No Has never been eligible for membership since the founding of AGOA [27]

Benefits and results

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AGOA provides trade preferences for quota and duty-free entry into the United States for certain goods, expanding the benefits under the Generalized System of Preferences (GSP) program. Notably, AGOA expanded market access for textile and apparel goods into the United States for eligible countries, though many other goods are also included. This resulted in the growth of an apparel industry in southern Africa, and created hundreds of thousands of jobs. However, the dismantling of the Multi Fibre Agreement's world quota regime for textile and apparel trade in January 2005 reversed some of the gains made in the African textile industry due to increased competition from developing nations outside of Africa, particularly China. Some factories shut down in Lesotho, where most of the growth occurred. Orders from African manufacturers stabilised somewhat after the imposition of certain safeguard measures[which?] by U.S. authorities, but Africa's share of the U.S. market was still reduced after the phaseout.

AGOA has resulted in limited successes in some countries. In addition to growth in the textile and apparel industry, some AGOA countries have begun to export new products to the United States, such as cut flowers, horticultural products, automotive components and steel. While Nigeria and Angola are the largest exporters under AGOA, other countries, particularly South Africa's have been more diverse and unlike the former are not mainly concentrated in the energy sector. To some countries, including Lesotho, Eswatini, Kenya and Madagascar, AGOA remains of critical importance. Agricultural products are a promising area for AGOA trade; however much work needs to be done to assist African countries in meeting U.S. sanitary and phytosanitary standards. The U.S. government is providing technical assistance to AGOA eligible countries to help them benefit from the legislation, through the U.S. Agency for International Development (USAID) and other agencies. The U.S. government has established three regional trade hubs in Africa for this purpose, in Accra, Ghana; Gaborone, Botswana; and Nairobi, Kenya.

Initially, AGOA was set to expire in 2008, but the United States Congress passed the AGOA Acceleration Act of 2004, which extended the legislation to 2015. It has since been extended by 10 years from 2015 to 2025. The Act's apparel special provision, which permits lesser-developed countries to use foreign fabric for their garment exports, was to expire in September 2007. However, legislation passed by Congress in December 2006 extended it through 2012, and later to 2025 as part of the general AGOA extension in June 2015.

Every year an AGOA Forum is held, which brings together government leaders and private sector stakeholders from Africa and the United States. The Forum is held in Washington every other year, and in an AGOA eligible African country in the other years. So far, the Forum has been held four times in Washington, and once each in Mauritius, Senegal, Ghana, Kenya (2009), Zambia (2011), Ethiopia (2013), Gabon (2015) and Togo (2017).

Statistics suggest a positive balance of trade for AGOA participant countries. In FY2008, the United States exported $17,125,389 in goods to the 41 AGOA countries, and the U.S. imported $81,426,951 for a balance of $64,301,562 in favor of the AGOA countries.[citation needed]

Reception

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Cameroonian scholar Tatah Mentan has criticized AGOA, arguing that while the legislation "sounds like a benevolent multilateral trade agreement", it is actually a neo-colonial scheme to further exploit African resources. Mentan has argued that despite promises of economic growth, the profits made from the scheme are "not for Africans".[28] Sociologist Michael Mann has argued the legislation "exacts indirect imperial tribute" from African states, noting AGOA contains a clause requiring participating African countries not to oppose American foreign policy.[29]

Some allege that AGOA is in contradiction with WTO rules.[citation needed] Furthermore, it is seen as a one-sided agreement as there was little African involvement in its preparation. AGOA has also been criticized for being "dominated by oil and raw materials" After the enactment of AGOA, "exports have increased by more than 500 per cent from around $8.2 billion then to $54 billion in 2011, although about 90 per cent of these are natural resources, mainly oil," wrote Andualem Sisay.[30]

References

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  1. ^ "The African Growth and Opportunity Act: Looking Back, Looking Forward". 30 November 2001.
  2. ^ Pub. L. 106-200 retrieved from the United States Government Printing Office website August 23, 2010
  3. ^ B&FT. "US outlines new AGOA strategy". GhanaWeb.
  4. ^ "Obama signs trade (Incl. AGOA), worker assistance bills into law - Agoa.info - African Growth and Opportunity Act".
  5. ^ PETER ALAN HARPER (29 August 1998). "WHITAKER COORDINATING U.S.-AFRICA TRADE POLICY SHE IS THE FIRST ASSISTANT U.S. TRADE REPRESENTATIVE FOR AFRICA". Greensboro News and Record. Associated Press. Retrieved 2021-02-23.
  6. ^ "The African Growth and Opportunity Act: Building Trade Capacity". commdocs.house.gov. Retrieved 2021-02-23.
  7. ^ "AGOA architect McDermott knighted in Lesotho - Agoa.info - African Growth and Opportunity Act". agoa.info. Retrieved 2021-02-23.
  8. ^ "The Foreign Service Journal, May 2004". FlippingBook. Retrieved 2021-02-23.
  9. ^ Brookings Institution (June 2012). "the African Growth and Opportunity Act:Looking Back, Looking Forward" (PDF). Archived (PDF) from the original on 2021-03-18.
  10. ^ Jetro, IDE. "Current Issues on the African Growth and Opportunity Act..." Archived from the original on 2020-06-13.
  11. ^ "US to evict Gabon, Niger, Uganda and Central African Republic from trade program". Reuters. 2023-10-31. Retrieved 2023-11-02.
  12. ^ "Text of notification to Congress on Burundi's suspension from AGOA from 2016 - Agoa.info - African Growth and Opportunity Act".
  13. ^ Donaldson, Tara (September 8, 2017). "New African Nations Get AGOA Trade Benefits, Others at Risk". Sourcing Journal. Retrieved September 8, 2017.
  14. ^ "Determination Under the African Growth and Opportunity Act". Federal Register. 2017-08-22. Retrieved 2017-09-08.
  15. ^ "US cuts off Ethiopia, Mali and Guinea from trade programme". www.aljazeera.com. Retrieved 2022-01-02.
  16. ^ a b "U.S. cuts off Burkina Faso from Africa duty-free trade program". www.reuters.com. 2 January 2023. Retrieved 2023-09-17.
  17. ^ "AGOA Eligible and Ineligible Countries – 2023" (PDF). Retrieved 2023-09-17.
  18. ^ "Text of notification to Congress on Burundi's suspension from AGOA from 2016 - Agoa.info - African Growth and Opportunity Act".
  19. ^ "Presidential Proclamation to take Certain Actions Under the African Growth and Opportunity Act and for Other Purposes" (PDF).
  20. ^ a b c d "US to expel Gabon, Niger, Uganda and the Central African Republic from trade program over rights concerns". www.jurist.org. 2023-11-01. Retrieved 2023-11-07.
  21. ^ a b "2016 AGOA Implementation Report" (PDF).
  22. ^ a b c "A Message to the Congress on the Termination of the Designation of the Federal Democratic Republic of Ethiopia (Ethiopia), the Republic of Guinea (Guinea), and the Republic of Mali (Mali) as beneficiary sub-Saharan African countries under the African Growth and Opportunity Act (AGOA)". 2 November 2021.
  23. ^ "US to end trade benefits for Mauritania over forced labour".
  24. ^ "President Donald J. Trump Upholds AGOA Trade Preference Eligibility Criteria with Rwanda".
  25. ^ a b "AGOA Eligible and Ineligible Countries-2022" (PDF).
  26. ^ "South Sudan, Gambia struck off Agoa list". 2 August 2020.
  27. ^ "'US to consider Zimbabwe's eligibility for AGOA this year' - Agoa.info - African Growth and Opportunity Act".
  28. ^ Africa in the Colonial Ages of Empire (2018), page 453
  29. ^ Mann, Michael (2003). Incoherent Empire. London: Verso. p. 74. ISBN 1-84467-528-9.
  30. ^ Ateba, Simon (2021-08-26). "U.S. tells Abiy's government human rights violations in Tigray could 'affect Ethiopia's future African Growth and Opportunity Act (AGOA) eligibility'". Today News Africa. Retrieved 2024-05-21.
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