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AGOA: US vows to support regional integration

AGOA: US vows to support regional integration
Published date:
Saturday, 04 November 2023

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 that provides duty-free access to the US market for special categories of products from eligible African countries. It has been credited with boosting economic growth and creating jobs in Africa. But some countries have paid the penalty and omitted from the arrangement for violating certain provisions.

Last week, US President Joe Biden said he is considering omitting Uganda, Gabon, Central African Republic and Niger. Kampala is fingered for passing an anti-gay law while the rest have falledn short on various forms of democratic principles including by toppling elected leaders through coups.

The AfCFTA is a free trade agreement that aims to create a single market for goods and services across the continent. It has the potential to boost intra-African trade by 52 percent and create 18 million new jobs by 2035.

Speaking at the Agoa Forum in Johannesburg, US Deputy Secretary of Commerce Don Graves said they were tapping into the potential of Agoa.

“We’re just tapping into the potential of Agoa right now, and it’s why we were so excited by the African Continental Free Trade Area that has also recently been put into place.

“This is allowing US companies to invest in one part of the continent and tap into suppliers all across the continent to get those supplies that are critical to their production.” 

He added they had “great conversations with our partners all across the continent” and recognised that “not every country is in the same place in terms of their industrial development and especially their manufacturing capacity”. 

“So, what we have tried to do, and this is something that we do across the US Government, is identify those programs in the US toolkit that would most effectively meet the needs of the businesses in that country and connect American businesses as well with those market opportunities.”

Mr Graves further revealed that bringing the potential US know-how to the continent.

“So we certainly have talked about the potential of bringing US knowhow, really the supplier and partner of choice across the continent – bringing our companies and our knowhow to bear in building additional capacity, ensuring that we’re building the type of workforce that is able to make processed or finished products so that those then can be sold across the world.”

Meanwhile, South Africa said it wants the US to extend the Agoa, which gives several African nations duty-free access to American markets.

“We would like you to look at the extension or renewal of Agoa for a sufficiently lengthy period for it to act as an incentive for investors to build new factories on the African continent,” President Cyril Ramaphosa said.

President Ramaphosa believes Agoa has served as the cornerstone of the US-Africa commercial relationship for more than two decades, but he wants the legislation that expires in 2025 to be extended for longer because short extensions impede investment ambitions.

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