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The African Growth and Opportunity Act (AGOA) is a United States Trade Act, enacted on 18 May 2000 as Public Law 106 of the 200th Congress. The AGOA legislation has been renewed on different occasions, most recently in 2015, when its period of validity was extended to September 2025.
The legislation significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries. It does that by allocating a special program indicator ('D') to approximately 6,800 tariff lines in the US tariff schedule, which allows US importers to clear such goods - sourced from eligible African countries - duty-free under AGOA.
AGOA preferences build on the US Generalized System of Preferences, which is subject to more regular Congressional reauthorization. AGOA's product coverage is also significantly more extensive than that of the GSP, and includes many products considered as sensitive. Products that are AGOA but not GSP eligible include items such as apparel and footwear, wine, certain motor vehicle components, a variety of agricultural products, chemicals, steel and many others.
Another important differentiating factor between the US GSP and AGOA is that the GSP contains different components: products that are eligible from all GSP beneficiaries (all AGOA beneficiaries are also GSP beneficiaries), and those that apply only to lesser developed country beneficiaries. The approximately 5,000 tariff lines eligible for GSP preferences are split as follows: 3,500 for non-LDC beneficiaries, and the full complement of 5,000 tariff lines for LDC beneficiaries. More details can be obtained from this Guide, and why AGOA is more advantageous than the GSP for African beneficiary countries.
Qualification for AGOA preferences is based on a set of conditions contained in the AGOA legislation. In order to qualify - and to remain eligible for AGOA - an AGOA beneficiary country must demonstrate respect for rule of law, human rights, and core labor standards. Beneficiary countries should also not seek to undermine US foreign policy interests. The AGOA eligibility requirements are listed in more detail at this link and are based on two pieces of legislation: The US Trade Act of 1974, as well as the criteria contained in the AGOA legislation.
The Act originally covered the 8-year period from October 2000 to September 2008, but legislative amendments signed into law by US President George Bush in July 2004 served to extend AGOA to 2015. At the same time, a special dispensation relating to apparel was extended by three years to 2007; and in December 2006 these were further extended to 2012. the apparel provisions grant beneficiary countries duty-free access to the US market under particularly favourable rules of origin.
In 2007, the apparel “abundant supply” provisions were enacted. The intention was to set requirements for local textile fabric sourcing where it was deemed that sufficient quantities were available in AGOA-eligible countries; fabric (the provisions related only to denim initially) would thus first have to be sourced locally or regionally before third country imports could be utilised in the production of denim garments. These provisions were however repealed in 2009, and lesser developed beneficiary countries may utilize third country fabric in the production of AGOA-eligible goods.
A subsequent legislative revision in September 2012 extended the apparel provisions to September 2015 to coincide with the expiry of the AGOA legislation at the time.
The apparel provisions are unique in that they grant countries defined by the legislation as “lesser developed”, being those that meet certain income thresholds (GNP < $1,500 per annum in 1998) and which have implemented a special apparel visa system, favourable rules of origin (RoO) requirements.
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.
US President Obama signing the AGOA Trade Preferences Extension Act of 2015 into law.