Agoa.info - African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/US to suspend Ethiopia, Guinea and Mali from AGOA in 60 days

US to suspend Ethiopia, Guinea and Mali from AGOA in 60 days

US to suspend Ethiopia, Guinea and Mali from AGOA in 60 days
Credit: AGOA.info
Published date:
Tuesday, 02 November 2021
Author:
David Thomas

Ethiopia is to be suspended from the United States’ tariff-free African Growth and Opportunity Act (AGOA) in a sign of the continuing deterioration in relations between the countries amid Ethiopia’s ongoing war in Tigray.

Ethiopia is one of three African countries – alongside coup-hit Guinea and Mali – which will lose access to the scheme, which provides tariff-free access to the US market for African manufacturers, from January 1st.

AGOA brings Ethiopia about $100m in “hard cash” annually and directly generates employment for about 100,000 people, mostly women in southern Ethiopia working in textile factories that export to the US, according to Vanda Felbab-Brown, co-director of the African Security Initiative at Brookings.

In recent months the US has harshly criticised the conduct of Ethiopia’s war in the Tigray region, which began in November 2020 and is estimated to have claimed tens of thousands of lives. Human rights organisations have reported massacres and mass starvation as the government’s war against the Tigray People’s Liberation Front (TPLF) has escalated.

In a statement to Congress, US President Joe Biden said that Ethiopia’s “gross violations of internationally recognized human rights” would lead to its disqualification from the scheme.

The suspension follows a September 17th executive order sanctioning Ethiopians involved in violence in the Tigray region. Biden said that the situation in northern Ethiopia, characterised by “widespread violence, atrocities, and serious human rights abuses” constituted “an unusual and extraordinary threat to the national security and foreign policy of the United States.”

Nevertheless, Charlie Robertson, global chief economist at Renaissance Capital, said that the suspension of Ethiopia from AGOA “isn’t likely to have a serious impact.”

“This sounds worse than it is. AGOA gives preferential trade access to African exporters – but Ethiopia doesn’t export much, let alone to the US. In 2020, Ethiopia only sold $3bn of exports based on IMF figures we’ve collected, and in 2018/19 just 7% of Ethiopia’s exports went to the US (according to National Bank of Ethiopia annual report for 2018/19)…So by my reckoning, this might impact less than $200m of Ethiopia’s exports, and even then this only removes the preferential trade access. Ethiopia presumably can still sell to the US.” 

[AGOA.info note: see Ethiopia-US trade data here. Almost half of Ethiopia's $524m in exports to the US in 2020 utilized AGOA preferences - mainly for apparel and footwear, two sectors reliant on AGOA preferences. Since Ethiopia is not a WTO Member State, the country's standard tariff schedule for access to the US market has far higher tariffs than would be the case under normal tariff relations tariffs (NTR). A loss of AGOA removes preferential access to 6,500 tariff lines. The U.S. GSP is also currently expired. ]

Suspension for juntas

Meanwhile, Guinea and Mali are to be suspended from AGOA after military coups upended their constitutional orders. United States Trade Representative Ambassador Katherine Tai said the US remains “deeply concerned by the unconstitutional change in governments”.

In September, Guinean President Alpha Condé was deposed by the self-styled National Committee for Reorientation and Development, a military junta which dissolved the government and constitution and removed senior public officials from office. Guinea is to be suspended “for not having established, or not making continual progress toward establishing the protection of the rule of law and of political pluralism.”

Mali, which experienced its second military coup in a year in May, was cited “for not having established, or not making continual progress toward establishing, the protection of the rule of law, political pluralism, and internationally recognized worker rights, and for not addressing gross violations of internationally recognized human rights.“

Read related news articles

** AGOA eligibility review 2023 (for year 2024): Timelines of hearings and request for comments ** [Deadline written submissions 7 July]

The Office of the United States Trade Representative (USTR) is announcing the initiation of the annual review of the eligibility of sub-Saharan African countries to receive the benefits of the African Growth and Opportunity Act (AGOA). The AGOA Implementation Subcommittee of the Trade Policy Staff Committee (AGOA Subcommittee) is requesting written public comments for this review and will conduct a virtual public hearing on this matter. In...

16 May 2023

Cameroon aims to boost export revenues, rejoin AGOA - minister

Cameroon is working to boost export revenues to fend off a potential debt crisis and has relaunched talks with the U.S. to rejoin Washington's flagship trade initiative with Africa, its economy minister said on Monday. The economic fallout from the COVID-19 pandemic and the subsequent global shocks provoked by the war in Ukraine have hit African countries hard, denting economic growth and aggravating their sovereign debt positions. The...

11 April 2023

Somalia pursues AGOA membership to bolster trade

The Somali government officially applied to join the 36 African countries on Thursday, benefiting from the African Growth and Opportunity Act (AGOA). The announcement was made during the Somalia AGOA application ceremony, where outgoing U.S. Ambassador to Somalia, Larry André, highlighted the United States’ commitment to expanding and modernizing partnerships in Africa and Somalia. Ambassador André emphasized that the U.S....

10 April 2023

Ethiopia asks US to reinstate AGOA trade benefits as US Secretary of State Blinken heads to Addis, Niger

Ethiopia is asking the Joe Biden administration to reinstate its duty-free access to the US market, arguing that “exceptional circumstances” warrant an immediate re-examination of its suspension just as Secretary of State Antony Blinken heads to Addis Ababa to discuss the cessation of hostilities in Tigray. The Office of the US Trade Representative (USTR) terminated Ethiopia’s participation in the African Growth and Opportunity Act...

09 March 2023

US to remove Burkina Faso from AGOA effective 1 January 2023: White House

U.S. President Joe Biden revealed on Wednesday his intent to exclude Burkina Faso from a U.S.-Africa trade pact, citing a lack of progress toward protecting the rule of law and political pluralism. Biden said that Washington will terminate Burkina Faso's designation as a beneficiary sub-Saharan African country under the African Growth and Opportunity Act (AGOA), starting January 2023 as it has not met"eligibility requirements." The decision...

02 November 2022

What does the US decision to delist three African countries from AGOA status imply?

Trade is one highly significant part of Africa’s story. Its pre-colonial, colonial and post-colonial transitions are all marked by trade. But for many years, African trade has struggled with several challenges: poor infrastructure, high transaction costs, opportunism and unfriendly policies. So when President Bill Clinton signed the African Growth and Opportunity Act (AGOA) in 2000, African countries were given a competitive edge by...

11 January 2022

US takes Ethiopia, Mali, Guinea off AGOA program

The United States on Saturday cut Ethiopia, Mali and Guinea from access to a duty-free trade program, following through on President Joe Biden's threat to do so over accusations of human rights violations and recent coups. "The United States today terminated Ethiopia, Mali and Guinea from the AGOA trade preference program due to actions taken by each of their governments in violation of the AGOA Statute," the U.S. Trade Representative's...

01 January 2022

Despite a late push, Ethiopia is set to exit the US trade pact

Despite a last-minute drive backed by diaspora members who fear that Washington may lose an ally, Ethiopia is likely to lose important commercial privileges in the United States on January 1 due to human rights concerns. President Joe Biden said on November 2 that Ethiopia, a longtime US ally and the continent’s second most populous country, will be removed from the African Growth and Opportunity Act in the New Year, citing “grave...

30 December 2021

US President terminates AGOA preferences for Ethiopia, Mali and Guinea

U.S. President Joe Biden announced yesterday that he has “determined that Ethiopia, Guinea, and Mali do not meet” the AGOA requirements described in section 506A(a)(1) and has proceeded to “terminate the designation of the three countries as beneficiary sub-Saharan African countries …effective January 1, 2022.” On November 21, the Ethiopian Ministry of Foreign Affairs lamented the impending decision by the U.S. to remove Ethiopia...

24 December 2021

Senator Van Hollen, Representative Bass urge Biden Administration to reconsider Ethiopia's suspension from AGOA

Today, U.S. Senator Chris Van Hollen (D-Md.) and Congresswoman Karen Bass (D-Calif.) urged President Biden to reconsider his Administration’s November 2, 2021 decision to terminate Ethiopia’s designation as a beneficiary country under the African Growth and Opportunity Act (AGOA) at the end of this year. As the lawmakers note in their letter (download a copy at the link alongside), this decision will hurt the nation’s most vulnerable...

23 December 2021

US terminates duty-free trade access to Ethiopia over conflict

Ethiopia’s duty-free export access to the U.S. has been revoked by President Joe Biden due to its failure to meet the requirements, according to the White House. The action comes after 13 months of civil war in the country. Ethiopia is disqualified from participation in the Africa Growth and Opportunity Act due to gross violations of human rights, the U.S. Trade Representative said when it notified Ethiopia in November....

23 December 2021

You are here: Home/News/Article/US to suspend Ethiopia, Guinea and Mali from AGOA in 60 days