US urged by Africa's leaders to extend AGOA trade programme

US urged by Africa's leaders to extend AGOA trade programme
US Congress
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Wednesday, 06 August 2014 ~ Elvina Nawaguna and Edith Honan
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African leaders urged the US on Monday to renew a trade benefits programme giving duty-free access to billions of dollars of African exports for 15 years, saying it would help cement trade relations and boost development in sub-Saharan Africa.

President Jacob Zuma, one of nearly 50 African leaders in Washington to attend a three-day summit, said the renewal of the African Growth and Opportunity Act (Agoa) when it expired next year was one of the key issues for the talks.

“Almost 95 percent of South African exports receive preferential treatment under Agoa,” Zuma said at a US Chamber of Commerce event on Monday, joining calls made by the AU for a 15-year extension.

“We strongly believe that by endorsing the extension of Agoa, the US will be promoting African integration, industrialisation and infrastructure development – I’m sure the Americans would not want to lose this opportunity,” he said.

The US administration is keen to renew the programme, but the duration and possible reforms such as adding new duty-free products, refining eligibility criteria and tweaking regional content limits are yet to be thrashed out.

Minister of Trade and Industry Rob Davies said that African nations had suggested widening the range of products covered to include more textiles and agricultural products, but he did not see the need for a major overhaul.

“Our message has been: ‘we don’t think the African Growth and Opportunity Act is broken and therefore there is no need to fix it’,” Davies said.

Agoa, established in 2000, has already been renewed past its original 2008 expiry date and is now set to run until September 30 next year. Nearly 40 African countries are eligible to take part.

US-bound exports from sub-Saharan Africa – mainly oil – under Agoa and other trade preferences totalled $26.8 billion (R285.5bn) last year.

General Electric, for example, pledged $2bn in investments by 2018.

The US administration has already called for Congress to renew Agoa well ahead of its expiry date, albeit with reforms. 

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