TRALAC - Trade Law Centre

Why the US's use of AGOA reviews worries African trade ministers

Monday, 14 August 2017 Published: | LINDA ENSOR

Source: Business Day (South Africa)

African countries have urged the US not to use the out-of-cycle reviews under the Africa Growth and Opportunity Act (Agoa) in a manner that restricts their ability to pursue policies in their national interest, in particular those that promote industrialisation.

Agoa provides duty-free, quota-free treatment for more than 6,000 tariff lines from African countries into the US market.

East African countries Rwanda, Tanzania and Uganda — are being subjected to out-of-cycle reviews of their eligibility to partake in Agoa because they have imposed higher tariffs on imported second-hand clothing to protect and promote their own textile sectors.

This fell foul of interests in the US, which complained to the trade administration.

 

Xolelwa Mlumbi-Peter, the Department of Trade and Industry’s deputy director-general for international trade and economic development explained that eligibility for Agoa required that countries have a market-based economy with no barriers to US trade and investment.

"This does reduce the policy space of countries to advance their own developmental agenda, the most important element of which is industrialisation," she said from Lome in Togo.

The use of out-of-cycle reviews issue was raised by African trade ministers who met on the sidelines of the 16th Agoa Forum in Lome last week.

While the ministers agreed that the out-of-cycle review was an integral part of Agoa legislation, they believed it should "not be used in a way that would be detrimental to the spirit of Agoa and urged the US to consider legitimate public policy issues that are critical to Africa’s development, in considering petitions for out-of-cycle reviews".

Out-of-cycle reviews were introduced into the renewed Agoa in 2015 and allow an affected US industry or company to complain to the US trade representative if an Agoa beneficiary country adopts policies that undermine its interests.

The duty-free access that SA’s agricultural products enjoyed in the US were threatened with exclusion from Agoa in 2015 because of the import barriers SA imposed on US chicken, pork and beef.

 

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