Beyond 2025: The AGOA summit’s bid for extended economic ties on the continent
The recent AGOA summit in Johannesburg beckoned calls for its extension beyond September 2025.
With a backdrop of the ongoing Israel-Hamas conflict and US-Africa relations at a delicate juncture, the summit explored the potential reshaping of trade norms, eyeing a more balanced economic relationship.
The annual African Growth and Opportunity Act (AGOA) summit was held in Johannesburg, South Africa last week, amidst landmark changes, with calls for its renewal beyond the current expiry in September 2025.
It was also announced that four African countries would be removed from the act. [AGOA.info note: One country - Mauritania - has regained AGOA beneficiary status effective 1 January 2024]
AGOA, which allows African member states preferential access to United States (US) markets, has long been an economic boon to the continent, but the current summit took place against a backdrop of tension due to recent diplomatic spats between the US and South Africa, as well as the ongoing Israel-Hamas conflict.
AGOA, first established by the US Congress in 2000, provides duty-free exports to the US for many goods from member countries. As of last year, exports to the US under the act were valued at $16.5 billion, with South Africa taking the lion’s share. With the current iteration of the act set to expire in 2025, South African President Cyril Ramaphosa made clear his desire to see the trade deal renewed.
“We would like you to consider the extension and renewal of AGOA for a sufficiently lengthy period,” said Ramaphosa on the last day of the summit.
His proposal of a renewal was matched by a statement issued by US lawmakers released on Friday, with House Foreign Affairs Committee chairman Michael McCaul stating, “Africa is on the precipice of an unprecedented demographic boom. The timely reauthorization of AGOA is important to provide business certainty and show the United States’ continued support towards Africa’s economic growth.”
However, Ramaphosa was also at pains to shift the balance of focus of the act moving forward, with historical trade, which often involves exporting raw materials to the US and importing manufactured goods into Africa – a relationship he would like to shift, highlighting the automotive sector in South Africa as one of note. “As we can already see, they have great use on the continent to produce the finished complete products such as vehicles and a whole number of others…”
Other notable changes of this year’s summit are the inclusion of labor union and civil society members, with representatives from some of South Africa’s largest trade unions being present.
“A renewed AGOA needs to include provisions to support compliance with good labor practices and penalize employers who flout labor laws,” said the Congress of South African Trade Unions (COSATU) in a statement on Friday. “[We are] heartened by the positive support we have received from the US labor movement which has a long history of solidarity with South African working-class struggles.”
The calls for renewal come amidst recent tensions between both South Africa and the US, as well as other African countries. AGOA membership, vetted by the US President, saw President Joe Biden announce that four countries would be removed from the act due to “non-compliance with AGOA eligibility criteria”; the Central African Republic (CAR), Uganda, Gabon, and Niger.
Over the last year, US-South Africa diplomatic relations were also strained by the secretive reported docking of the Russian vessel Lady R in December 2022, as well as more recent comments last month expressing solidarity with Palestine following Israel’s retaliation for the Hamas attacks on October 7. However, both of these challenges appeared to have been smoothed over diplomatically, with both countries on track for a renewal of the AGOA pact.
“When we say that AGOA is the cornerstone of our economic partnership we do not mean that in the abstract,” said United States Trade Envoy Katherine Tai in her closing remarks of the summit. “It has been a bedrock for improving the livelihoods of so many people across Africa… and it has the potential to do so much more.”
Read related news articles
Exploring synergies between AGOA and AfCFTA: The case for African exports
Africa is often characterised as a continent poised for economic growth and development. Often, prosperity and development in Africa can be linked back to exports and the benefits that they generate. This brings to the forefront the African Growth and Opportunity Act (AGOA) and its role in opening American markets to 35 African countries, as well as the African Continental Free Trade Area (AfCFTA), which aims to increase socio-economic...
09 November 2023
African and US trade unions call for decent work in trade and economic cooperation
The African Growth and Opportunity Act (AGOA) Forum took place in Johannesburg, South Africa, 2-4 November, to strategize ways to strengthen an inclusive trading partnership between the US and 35 eligible African countries. AGOA is a US law which was signed in 2000 aimed at creating duty free access for eligible African countries to the US markets. Eligibility criteria includes adopting market-based economies, the rule of law, political...
09 November 2023
AGOA extension crucial for Ghana’s industrialisation
The Deputy Minister of Trade and Industry Nana Ama Dokua Asiamah-Adjei is supporting the push for the extension of the African Growth and Opportunity Act (AGOA) to enhance trade between Ghana and the US. 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...
06 November 2023
AGOA benefits extend beyond trade [incl. VIDEO of Friday's opening session]
Economies in Sub-Saharan countries stand to benefit far more from the African Growth and Opportunity Act (AGOA) than notable trade statistics, says President Cyril Ramaphosa. “AGOA enhances the diversification of African economies, enabling them to export value-added products. By enabling African countries to have preferential access to the US market, this opportunity incentivises African countries to develop and export value-added goods...
06 November 2023
Protection likely for African countries that outgrow AGOA
The improved agreement of the African Growth and Opportunity Act (AGOA), due to expire in 2025, is likely to have fewer requirements for graduation from the programme to avoid beneficiaries losing out on the lucrative commercial ties with the US, says a top Washington diplomat. The legislation, which was enacted in 2000 and allows Sub-Saharan African countries preferential access to US markets, requires that beneficiaries be graduated out of...
06 November 2023
Uganda criticises US plan to exclude it from duty-free trade programme
Uganda on Wednesday criticised a US move to eject it and other African countries from accessing a tariff-free trade programme, saying the action was to punish African countries that are resisting the imposition of the West's cultural values. US President Joe Biden said on Monday that he intended to end the participation of Uganda, Gabon, Niger and the Central African Republic in the African Growth and Opportunity Act (AGOA) trade...
05 November 2023
South Africa pins its hopes on an early 2024 US Congress renewal of AGOA
South Africa’s government is hoping that the process to renew the African Growth and Opportunity Act (Agoa) by the US Congress will be concluded by early 2024, ensuring that more than 20 African countries continue to have duty-free access to the world’s largest economy. This is the first time that the South African government has given a timeline for when it hopes the US Congress might extend Agoa, which has been renewed twice...
05 November 2023
New deal for African, US companies to partner under AfCFTA
African and US companies will soon enjoy a partnership of trading and investment building on provisions provided under the African Continental Free Trade Agreement (AfCFTA). This is according to a new Memorandum of Understanding signed between the AfCFTA Secretariat and Corporate Council on Africa – an American organisation devoted to fostering US-Africa business relations – with an aim to increase private sector support and involvement...
04 November 2023
AGOA: US vows to support regional integration
The United States says it is committed to supporting regional integration in Africa, seeing it as essential for the continent's economic development and prosperity. At a conference on the African Growth and Opportunity Act (Agoa) in Johannesburg, US officials said they were backing the African Continental Free Trade Area (AfCFTA), even though there will be variations on country specific trading arrangements. Agoa is a trade agreement...
04 November 2023
Remarks by USTR Ambassador Katherine Tai at the closing ceremony of the 20th AGOA Forum
United States Trade Representative Katherine Tai today delivered remarks during the closing ceremony of the 20th African Growth and Opportunity Act (AGOA) Forum. In her remarks, Ambassador Tai reiterated the United States’ commitment to strengthen the U.S.-Africa trade and investment relationship to deliver real opportunities across our societies. Ambassador Tai also highlighted the need to make the AGOA program more effective and...
04 November 2023