TRALAC - Trade Law Centre

AGOA 2015: Moving to sustainable US-Africa trade and investment partnership

Wednesday, 26 August 2015 Published: | Linda Thomas-Greenfield

Source: US Department of State Blog

The American consumer has long been accustomed to reading labels marked “Made in China.” However, across the United States, more shoppers are seeing “Made in Ghana,” “Made in Tanzania,” and other labels.

African products ranging from luxury bags to specialty hot sauces are reaching largely American audiences thanks to the African Growth and Opportunity Act (AGOA).  

Created in 2000, AGOA permits duty-free entry for nearly 98 percent of all imports from eligible African countries and has become the cornerstone of U.S. trade relations with the region.

The United States and our African partners have convened for AGOA Forums annually since the program began nearly 15 years ago.  This year’s Forum in Libreville, Gabon, taking place from August 24- 27, comes at a particularly good time. The AGOA program was due to expire on September 30, but President Obama signed a ten-year extension in June after the U.S. Congress passed new AGOA legislation with overwhelming bipartisan support. The extension – the longest in the program’s history – provides certainty for African producers and U.S. buyers regarding access to the U.S. market and sends a strong signal that Americans can and should invest with confidence in Africa.

Given this momentum, I am excited to be in Libreville to participate in the Forum. This year’s theme, “AGOA at 15:  Charting a Course for a Sustainable U.S.-Africa Trade and Investment Partnership,” provides an opportunity for the top trade officials from both Africa and the United States to discuss how to best take advantage of the opportunities presented by the extension of the program. Now that we are no longer constrained by concerns about AGOA expiring in the near future, we can start more strategic conversations about the future of our trade and investment relationship.

AGOA has become a key tool in our efforts to achieve one of this Administration’s developmental priorities: to grow the next generation of emerging markets by building an effective trading partnership between the United States and the countries of sub-Saharan Africa.  

AGOA encouraged African countries to diversify their exports into non-traditional and higher value products such as apparel, footwear, and processed agricultural products.  The growth of these non-oil industries has created an estimated 300,000 direct jobs in beneficiary sub-Saharan African countries, but the benefits of AGOA reach both sides of the Atlantic.  Total African exports under AGOA have quadrupled since the program’s inception. Meanwhile U.S. trade with Africa has doubled since the initiative was launched, creating an estimated 120,000 American jobs.  

Of the jobs created, 200 on the continent can be attributed to the entrepreneurial spirit of Flotea Massawe. Ms. Massawe is an enterprising small business owner from Tanzania who has utilized AGOA to successfully export her stylish pillows, bags, runners and table mats to the United States.  Before AGOA, she produced on average 200 pieces a month and had an annual income of $120.  Currently, she produces 2,000 to 3,000 pieces a month and earns $100,000 annually. Today, her products line the shelves of Macy’s department stores.  Ms. Massawe’s story, along with many others, underscores the significance of AGOA’s ten-year renewal in offering even more African entrepreneurs the opportunity to improve their competitiveness and participate in global supply chains.

Notwithstanding the tremendous success already achieved, AGOA stakeholders want to maximize and perfect AGOA’s implementation.

That is why in addition to the ministerial sessions August 26 and 27, it was very important that civil society, business leaders, and women and youth entrepreneurs could participate in the Forum on August 24 and 25.  Sustained, inclusive economic growth not only requires a partnership between governments, but also partnerships with the entrepreneurs and private sectors. 

The Gabon Chapter of the African Women’s Entrepreneurship Program (AWEP) program, who will sponsor trade exhibitions during the civil society portion of the Forum, is a shining example of this type of partnership. And we want to help ensure more American businesses and African entrepreneurs like Ms. Massawe know about AGOA, know how it works, and know what opportunities exist for their products in U.S. markets.

If you are an entrepreneur or investor, the U.S. government has a number of programs, including those supported by the U.S. Department of State’s commercial diplomacy efforts as well as the U.S. Agency for International Development’s regional trade hubs in East, West, and Southern Africa, to help African entrepreneurs and Americans better take advantage of AGOA.

It is my hope that with the extension of AGOA for another ten years, the United States and our African partners will take full advantage of the opportunity to deepen the trade and investment ties in ways that mutually benefit our countries for decades to come. 

About the Author: Linda Thomas-Greenfield is the Assistant Secretary of State for the Bureau of African Affairs.

 

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