TRALAC - Trade Law Centre

Keeping AGOA Alive

Friday, 23 January 2004

Source: Washington Trade Daily

The third version of the African Growth and Opportunity Act (AGOA) seems set to be passed this year in spite of the American presidential elections. This is the view of Ways and Means democrat Rep. Jim McDermott (Wash) who has left his current portfolio to champion the AGOA III Bill as a matter of urgency.

While the current African Growth and Opportunity Act will only expire in 2008, African beneficiary countries are urging Congress to act now so that potential investors will feel secure about doing business in the region. If the AGOA III Bill is passed it will extend the benefits of AGOA to 2020. A more important benefit that is crucial to African countries is the extension of duty-free treatment on apparel products for least developed African countries.

This last point regarding apparel is the real reason that African countries are pushing for a decision to be made soon, since the expiry of the apparel provision this year would seriously compromise the profitability of African textile businesses.

In the meantime everyone is waiting for the 2005 fiscal budget and the position of US Trade Representative Robert Zoellick who will be discussing trade policy priorities at a Ways and Means meeting soon.

South African Ambassador to the United States Barbara Masekela has supported the recent move to fast-track the AGOA III Bill saying that AGOA represents one of the most meaningful developments in the history of US-African economic relations. Masekela was outspoken about the need to include dutyfree access to the US for agricultural products and suggested that there should be more incentives to encourage US investment in Africa.