TRALAC - Trade Law Centre

Bush okays AGOA II

Saturday, 17 August 2002

Source: New Vision (Kampala)

US President George Bush has signed into law the changes or "enhancements" to the African Growth and Opportunity Act (AGOA) paving way for more trading opportunities for Africa and the US.

The US Assistant Trade Representative (USTR) for Africa, Rosa Whitaker described the new development, part of the omnibus Trade Act of 2002 signed into law last week as a "win-win situation for sub-Saharan Africa and us", the US embassy in Kampala revealed.

According to Whitaker, "The enactment of the AGOA enhancement will add momentum" to the growing US-Africa trade relationship "by reaffirming the commitment of the US to opening our markets to Africa and to supporting economic growth and development."

She commented on the overall economic potential of the new AGOA, sometimes called AGOA 2, saying it would expand on gains made by its predecessor, the first-ever U.S. regional trade agreement with Africa.

"We are very pleased with it. It has been tremendously successful. African countries, last year, exported over $8,200 million worth of a diversified range of products to the US under the original act," she said.

In Uganda, AGOA led to an apparel investment that "created 2,000 jobs, and includes a training institute for textile workers to service that new industry," the official added.

The AGOA 2 extends duty, and quota-free status to additional apparel items, such as sweaters, T-shirts and socks, called "knit to shape," which were not included in the last AGOA round.

Knit-to-shape items are "the fastest-growing sectors of AGOA, and "countries that have established knit-to-shape industries, like Uganda, South Africa and Madagascar should see some immediate benefits," she said.

The sector is also especially important to cotton growers in Africa.

At the same time, the act has benefited American business, Whitaker added: "U.S. merchandise exports to sub-Saharan Africa totaled $7,000 million last year, centering on the sale of aircraft, vehicles and wheat."

Since the first AGOA legislation became law in May 2000, Whitaker said, "We have seen a number of multiplier benefits" for both the US. economy and for many of the 36 African nations deemed eligible for the act's duty-free export provisions.

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