- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/AGOA: Snatching defeat from the jaws of victory?

AGOA: Snatching defeat from the jaws of victory?

AGOA: Snatching defeat from the jaws of victory?
Witney Schneidman (author)
Published date:
Monday, 22 June 2015
Witney Schneidman

Last week, Representative Karen Bass (D-CA) publicly urged Senate Majority Leader Mitch McConnell (R-KY) to send the African Growth and Opportunity Act (AGOA) to President Obama for his signature.

Over the last several weeks, AGOA has passed both the Senate and the House with exceedingly strong bipartisan support.

Representative Bass is absolutely right in her urgency. AGOA is a non-reciprocal preference program and has no relevance to the current debate in Congress over the Trade Adjustment Authority (TAA) and Trade Promotion Authority (TPA) except for its unfortunate new role as a political football. Congress has already voted to reauthorize AGOA for another 10 years. Even though the House and Senate versions were slightly different, these differences should be worked out in conference and a unified AGOA bill sent to President Obama to sign into law as soon as possible.

Delaying AGOA’s renewal undermines the cornerstone of the U.S. economic development strategy in Africa. After all, AGOA is intended to stimulate export-led economic growth in the nearly 40 countries in sub-Saharan Africa that participate in the program. In its lifetime, AGOA has led to the creation of 350,000 direct jobs and 1 million indirect jobs in Africa. According to the International Trade Administration in the Department of Commerce, the legislation also has contributed to more than $50.2 billion of U.S. exports to the region, which supports 250,000 American jobs.

AGOA is set to expire on September 30. With less than 100 days remaining in the life of the legislation, many companies find themselves in a bind: Apparel and footwear companies, who place orders months in advance so that their goods are in stores on time for specific seasons, cannot rely on the trade preferences that make ordering from Africa advantageous, likely forcing them to go elsewhere. This situation is particularly troubling for many AGOA countries, as apparel and footwear companies have created the largest number of jobs there. Delaying AGOA’s renewal will inevitably impact America’s influence in Africa, arguably the most pro-U.S. region in the world.

As of last week, leaders in Congress and the administration have embarked on a high-risk strategy that aims to generate enough Democratic votes in the House to pass TAA, a program that provides support and training to American workers who have lost jobs to the relocation of U.S. companies to other markets.

Democrats have supported TAA for 40 years but labor has mobilized significant support among House Democrats against the program as part of its strategy to oppose the Trans-Pacific Partnership free trade agreement. Therefore Senator McConnell will work to tie AGOA to TAA in hopes of inducing Democrats, who strongly support the Africa legislation, to vote to renew the worker retraining program.

Equally important to the passage of the Pacific free trade agreement is the special authority, TPA, that would enable President Obama to submit the trade deal to Congress for an up-or-down, haggle-free vote. President Obama has said that if the trade authority and the worker retraining program do not arrive on his desk together, he will not sign either.

It is expected that a vote on the new legislation, which links AGOA to TAA, could take place on Tuesday. It would then have to go back to the House as it is different from the one originally passed. If passed in the House it would then go to the president for his signature.

According to this new strategy, Congressional leaders hope to have all trade bills, including AGOA, TPA, and TAA, to the president for his signature by July 4. However, TPA will have to pass the Senate first, and that will clear the way for the new bill that links AGOA and TAA to be brought up for a vote. If these two pieces of legislation do not get enough votes in the Senate or the House, AGOA is likely to expire, as it would be extremely difficult to get any trade legislation enacted in the next several months as the U.S. presidential contest intensifies. Presidential candidates are notoriously reluctant to embrace any free trade initiative while running for office.

There is no rationale for AGOA to be held hostage to this political maneuvering. Senator McConnell should forward the existing AGOA legislation to President Obama as soon as possible given that the bill has already been vetted and approved in both chambers of Congress. If not, President Obama and the leadership of the U.S. Congress run the risk of snatching defeat from the jaws of victory.

Note: This piece reflects the views of the author only and not the Brookings Institution nor the Africa Growth Initiative.


Read related news articles

African trade coalition backs AGOA 16-year renewal bill to boost trade prospects

The African Coalition for Trade (ACT) has voiced its support for the African Growth and Opportunity Act (AGOA) Renewal and Improvement Act of 2024 and credits the bill with creating hundreds of thousands of direct jobs in Africa and the US. The AGOA Renewal and Improvement Act of 2024 which was introduced by Senators Chris Coons and James Risch would extend the bill for 16 years until 2041 and continue to boost Africa’s duty-free status as...

18 April 2024

US apparel and footwear industry supports 16 year AGOA renewal

The American Apparel & Footwear Association applauds Senator Chris Coons (D-DE) and Senator James Risch (R-ID) for introducing the AGOA Renewal and Improvement Act of 2024.Currently set to expire in September 2025, AGOA is a pivotal trade preference program that provides duty-free access to the U.S. market, fostering economic growth and opportunity between the U.S. and eligible African countries. This program is the cornerstone of...

11 April 2024

US senators will introduce bill to renew Africa trade pact through 2041 [Download copy]

A bipartisan group of senators will introduce a bill to renew the United States' trade pact with sub-Saharan Africa ahead of its expiration next year, an aide to one of the senators said on Thursday.  [    Download it here and download a summary here] The bill was introduced by Senators Chris Coons, a Democrat, and James Risch, the top Republican on the Senate Foreign Relations Committee. A cross-party group of...

11 April 2024

US manufacturing subsidies for Africa could help revive AGOA

Experts at the Center for Global Development argue that the unconventional approach could bring billions in new trade opportunities and would fit with US “friend-shoring” efforts. The US should pay ‘negative tariffs’ in Africa – essentially targeted manufacturing subsidies – to help revive its faltering African Growth and Opportunity Act (AGOA),  according to a new report from the Washington-based Center for Global...

05 April 2024

US and African civil society stakeholders seek AGOA extension

A Civil Society Organisation, Network and other stakeholders from across the United States and African Growth and Opportunity Act-eligible countries have petitioned the President of the United States of America, Joe Biden, to consider an extension of the initiative. The CSO made the plea in a letter dated February 16, 2024, titled ‘Petition for Timely Re-Authorisation and Enhancement of the African Growth and Opportunity Act Beyond...

16 February 2024

House Ways and Means Committee leadership statement on meeting with ambassadors from select AGOA countries

Ways and Means Committee Chairman Jason Smith (MO-08) and Ranking Member Richard E. Neal (MA-01) released the following statement after hosting a bipartisan roundtable with Committee members and ambassadors from several African Growth and Opportunity Act (AGOA) countries. AGOA is a U.S. trade program focused on strengthening economic ties between the United States and nations in Sub-Saharan Africa. “We appreciate the ambassadors from...

18 January 2024

WEF - How has AGOA benefited African countries?

The African Growth and Opportunity Act (AGOA) is a trade agreement between the United States and sub-Saharan African countries. Agoa has helped to increase trade and investment between Africa and the US. It has also helped to create jobs and boost economic growth in Africa. African countries are calling for it to be extended. To what extent has the AGOA goal been achieved? The duty- and quota-free access to the US market granted by Agoa...

16 November 2023

South Africa’s AGOA forum: Crafting future pathways for US-Africa trade partnership

Ultimately the African Growth and Opportunity Act (AGOA) could be extended by 16 years, that means until 2041, indicating its importance for strengthening Africa’s trade and economic cooperation with United States. That was, in fact, the main focus during Johannesburg’s early November forum that brought together more than 30 trade ministers, astute investors plus representatives from the regional economic blocs and the African Union. At...

14 November 2023

Africa-US trade: AGOA expires in 2025 - what has it achieved in 23 years?

African governments are seeking an extension of the African Growth and Opportunity Act (Agoa) beyond 2025. The law was enacted in 2000 to “encourage increased trade and investment between the United States and sub-Saharan Africa”. We asked David Luke, who specialises in African trade policy and trade negotiations, what benefits Agoa has brought for qualifying African countries and how it can...

12 November 2023

US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility

Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...

07 November 2023

AGOA extension crucial for Ghana’s industrialisation

The Deputy Minister of Trade and Industry Nana Ama Dokua Asiamah-Adjei is supporting the push for the extension of the African Growth and Opportunity Act (AGOA) to enhance trade between Ghana and the US. A United States Trade Act enacted on 18 May 2000 as Public Law 106 of the 200th Congress, the AGOA legislation has been renewed on different occasions, most recently in 2015, when its period of validity was extended to September 2025. The...

06 November 2023

You are here: Home/News/Article/AGOA: Snatching defeat from the jaws of victory?