TRALAC - Trade Law Centre

President Bush Signs Extension of Africa Trade Law

Praising the African Growth and Opportunity Act (AGOA) as a law that "has been beneficial to the people of the continent of Africa and to the people of the United States of America," President Bush signed legislation July 13 that reauthorizes AGOA until 2015 and extends the expiration dates for a number of its key provisions.

"Like all good partnerships, AGOA has been beneficial to all parties. Free trade between the United States and sub-Saharan Africa has created jobs, wealth, and opportunity on both continents," said Bush, who was flanked at the White House ceremony by Secretary of State Colin Powell and senior members of the U.S. Congress.

The landmark AGOA legislation, originally enacted four years ago, gives African nations duty-free access to U.S. markets if they make progress in opening their economies and building free markets.

The latest version of the law, known as AGOA III, extends through September 2007 a provision that allows African nations to sell duty-free apparel to the United States, even if the fabric used in making the apparel is produced in a third nation. That provision was due to expire this fall.

President Bush called AGOA an important complement to traditional aid programs for Africa.

"When nations close their markets and opportunity is hoarded by a privileged few, no amount of development aid is ever enough," he said. "But when nations respect their people, open their markets, expand freedom and opportunity to all their citizens, entire societies can be lifted out of poverty and despair."

AGOA has generated more than $340 million in investment and created thousands of jobs since it became law. Last year, African exports to the United States increased by 55 percent under AGOA, while American businesses saw a 15 percent increase in their exports to sub-Saharan Africa, totaling nearly $7 billion.

Thirty-seven African nations are currently eligible to participate in the program.

"Things are happening because of the law we're extending today, positive things for people in Africa and in America. The enactment of this law will help ensure that this mutually beneficial trade continues," President Bush said.

The president's remarks came one day after U.S. Trade Representative Robert Zoellick met with African trade officials in Mauritius to discuss World Trade Organization (WTO) talks to be held in Geneva later this month.

President Bush told African diplomats who attended the AGOA signing that such trade negotiations are "important meetings for the people of the United States; they're important meetings for the people on the continent of Africa.

"And the reason why is because we want to advance our shared economic agenda, and it's very important for our AGOA partners to help make these talks in Geneva a success. Pass the word on to your capitals."

The president also highlighted the importance of trade laws such as AGOA in promoting peace and stability in Africa.

"It's important for our people to understand, by opening United States markets, we make it more likely there will be peace on the continent of Africa.

"AGOA nations are strengthening the rule of law. They are lowering trade barriers, they're combating corruption, and eliminating child labor. They're setting an important example for the entire continent, demonstrating that governments that respect individual rights and encourage the development of their markets are more likely to grow economically and achieve political stability," he continued.

The signing of AGOA III also drew praise from its supporters in the U.S. Congress.

"Many provisions of the African Growth and Opportunity Act were set to expire this year," Senator Charles Grassley, a Republican from Iowa, said in a statement. "This created an environment of uncertainty, which was leading to investment flight and lost opportunities. The signing of this bill today will help Africans reap the program's full benefits."