TRALAC - Trade Law Centre

Obama administration holds 15th AGOA Forum, looks to maximize US-Africa trade through AGOA and beyond

Monday, 26 September 2016 Published: | USTR

Source: USTR

Today, U.S. Trade Representative Michael Froman led the U.S. delegation at the U.S.-Sub-Saharan Africa Economic Cooperation Forum (AGOA Forum). This year’s AGOA Forum brought together government officials, civil society leaders, and business representatives from the United States and across Africa to discuss the current state of the US-Africa trade and investment relationship, highlight policies to maximize African Growth and Opportunity Act (AGOA) utilization, and explore potential pathways to update the U.S.-Africa trade and investment relationship. 

“Africa has never been more dynamic than over the last few decades.” Ambassador Froman said.  “Increased trade and investment have been vital to Africa’s successes so far, and will continue to be critical to boosting Africa’s economic growth, spurring development, and reducing poverty in the future.  AGOA has been an important part of the puzzle to date.  We now need to devote our attention to building on AGOA’s successes, as well as considering whether additional approaches are needed to adapt the U.S.-Africa trade and investment partnership to a fast-changing world.”

The 2016 Forum marks the 15th year government officials, business leaders, entrepreneurs, and civil society from sub-Saharan African beneficiaries of the AGOA program and the United States have gathered to promote trade and investment opportunities in Africa.  Keeping in line with this year’s theme, “Maximizing U.S.-Africa Trade and Investment; AGOA and Beyond,” the Forum featured roundtables and workshops to discuss policies that address challenges to AGOA utilization as well as possible new policies for building a strong U.S.- sub-Saharan African trade and investment relationship beyond AGOA.  The Forum was preceded by side events incorporating private sector, civil society, and African Women’s Entrepreneurship Program (AWEP) stakeholders, as well as an inaugural Trade and Labor Ministerial Roundtable, co-hosted by the U.S. Department of Labor and the Office of the U.S Trade Representative.

AGOA and Beyond

AGOA has been the cornerstone of the Administration’s trade and investment engagement in sub-Saharan Africa for the last 16 years.  Last year, Congress overwhelmingly approved legislation to reauthorize AGOA for ten years.  The United States aims to work with AGOA beneficiaries to maximize AGOA utilization, including through broader and more robust use of AGOA utilization strategies.  The United States also looks to discuss the need, and options for, moving the U.S.-Africa trade and investment relationship forward to further boost trade and investment in a new era of engagement.  To that end, the U.S. Trade Representative has released a new report, “Beyond AGOA: Looking to the Future of U.S.-Africa Trade and Investment,” which presents the case for deepening the U.S.-Africa economic relationship.  The report outlines key trends in the global trading system against which U.S.-sub-Saharan Africa engagement should be viewed, explores the substantive building blocks potentially important to a new U.S.-Africa trade architecture, and assesses some strategic and structural options for moving forward. 

The AGOA Forum provided an important opportunity to engage on the issues outlined in the report, setting in motion a process that can be carried forward in the coming years to help ensure that by the expiration of the current AGOA program, the U.S.-Africa trade relationship is updated and keeping pace with the challenges of the global marketplace.

Background

The African Growth and Opportunity Act (AGOA) was first enacted in May 2000 to expand U.S.-sub-Saharan African trade and investment, stimulate inclusive development and economic growth, foster a high-level dialogue on trade and investment-related issues, encourage economic integration, promote economic and political reform, and facilitate sub-Saharan Africa’s integration into the global economy.  AGOA has provided trade preferences to sub-Saharan African countries that are making progress in implementing economic, legal, labor and human rights reforms, and allows eligible countries to export thousands of products, including value-added manufactured items such as textiles and apparel, duty-free to the United States.

Today, the vast majority of African exports to the United States now enter duty-free either under AGOA, the U.S. Generalized System of Preferences (GSP), or under a non-preferential (normal-trade-relations) zero rate of duty.  Since 2001, total AGOA (including GSP) imports have risen by 13 percent to $9.3 billion in 2015.  Non-oil trade under AGOA has increased nearly three-fold to $4.1 billion in 2015.  The growth of these non-oil industries has supported an estimated 300,000 direct jobs in beneficiary countries.

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