TRALAC - Trade Law Centre

Eligible Countries Gain From Special Trade Programs, USTR Reports

Wednesday, 10 September 2003

Source: United States Trade Representative (Washington, DC

Eligible countries are benefiting from preferential trade programs, such as the African Growth and Opportunity Act (AGOA), the Office of the U.S. Trade Representative reports in a September 9 fact sheet. The fact sheet was issued on the eve of World Trade Organization talks September 10-14 in Cancun, Mexico.

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The African Growth and Opportunity Act (AGOA)

The United States believes that a free and open trading system is critical to development, and has backed that belief with action. Through AGOA and other preferential trade programs, the Bush Administration is helping developing countries to harness trade as an engine of economic growth.

"Now and in the years to come, we will continue working to expand trade between America and the African continent. AGOA shows the power of trade to lift people out of poverty." -- President George Bush, January 2003

AGOA-Eligible Countries Receive Duty- and Quota-Free Access to the U.S. Market

-- AGOA extended the GSP {Generalized System of Preferences] program -- which covers 4,650 products for sub-Saharan African beneficiary countries through September 30, 2008.

-- AGOA granted the President authority to provide duty-free treatment for an additional 1,835 goods not covered under the GSP program.

-- AGOA provisions grant duty-free and quota-free treatment to qualifying apparel articles and to textile or apparel articles that are determined to be hand-loomed, handmade or folklore items after appropriate consultation.

-- 38 of the 48 sub-Saharan African countries are currently eligible for AGOA.

-- In 2002, 94 percent of U.S. imports from AGOA beneficiary countries entered duty-free.

AGOA: A New U.S. Trade and Investment Framework for Africa

-- Institutionalizes a process to strengthen U.S. relations with African countries and provides incentives for African countries to achieve political reform, economic reform, and growth.

-- Provides additional certainty for investors and traders in African countries by guaranteeing GSP benefits through 2008.

-- Established the U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA Forum) to facilitate regular ministerial-level trade and investment policy discussions.

-- Promotes the use of technical assistance to strengthen economic reforms and development, including assistance to strengthen relationships between U.S. firms and firms in sub-Saharan Africa. From 1999 to 2002, the United States provided over $345 million in trade capacity building assistance to sub-Saharan Africa.

AGOA is Strengthening U.S.-African Trade Relations:

-- AGOA is the cornerstone President Bush's trade and investment policy toward sub-Saharan Africa. It is promoting free markets, expanding U.S.-African trade and investment, stimulating economic growth, and facilitating sub-Saharan Africa's integration into the global economy.

-- AGOA is successfully supporting African efforts to embrace economic reforms, firmly establish the rule of law, reduce poverty, and strengthen labor and human rights.

-- AGOA requires beneficiary countries to meet specific eligibility criteria, helping advance African efforts to liberalize trade, strengthen market-based economic systems, privatize state-owned enterprises, and remove burdensome regulations.

-- African political reforms have included measures to combat corruption and improve governance. African countries have strengthened the protection of workers' rights and moved to combat the worst forms of child labor.

-- The AGOA Forum has facilitated consultations on U.S.-African trade and economic issues.

-- Ambassador Zoellick has used annual forum meetings to engage African governments, the U.S. private sector, NGO communities, and Congress in discussions on AGOA implementation and U.S.-African trade policy.

AGOA is Stimulating U.S.-African Trade and Investment:

-- AGOA continues to bolster the U.S.-sub-Saharan African trade and investment relationship, which now covers half of total U.S. imports from the region.

-- While global trade and overall imports from the region slowed in 2002, U.S. imports under AGOA grew to $9 billion -- a 10 percent increase over 2001. AGOA textile and apparel imports more than doubled, transportation equipment imports expanded by 81 percent, and imports of agricultural products grew by 38 percent.

-- AGOA continues to foster new trade and investment opportunities, create jobs, and promote economic development. Since its implementation, AGOA-related trade and investment has created more than 190,000 African jobs and spurred investments worth more than $340 million.

The Future of AGOA

At the last AGOA Forum meeting in Mauritius, President Bush pledged to work with the U.S. Congress to extend AGOA beyond 2008. The President's announcement further demonstrates the U.S. commitment to African economic growth and development.

-- "AGOA III" legislation is under consideration. U.S. and African NGOs, government officials, and private sector representatives are currently discussing possible AGOA III provisions.

-- AGOA III provisions may include expanded benefits and product coverage, technical corrections and legislative clarifications, and means to address African technical assistance and trade capacity-building needs. The Administration will continue consulting with Congress with respect to these proposals.