African Growth and Opportunity Act

African Growth and Opportunity Act
Great Seal of the United States
Other short titles United States-Caribbean Basin Trade Partnership Act
Long title An Act to authorize a new trade and investment policy for sub-Saharan Africa, expand trade benefits to the countries in the Caribbean Basin, renew the generalized system of preferences, and reauthorize the trade adjustment assistance programs.
Acronyms (colloquial) AGOA
Nicknames Trade and Development Act of 2000
Enacted by the 106th United States Congress
Effective May 18, 2000
Citations
Public law 106-200
Statutes at Large 114 Stat. 251
Codification
Titles amended 19 U.S.C.: Customs Duties
U.S.C. sections created 19 U.S.C. ch. 23 § 3701 et seq.
Legislative history
President George W. Bush signs into law the African Growth and Opportunity Act (AGOA) of 2004 in the Dwight D. Eisenhower Executive Office Building Tuesday, July 13, 2004.

The African Growth and Opportunity Act, or AGOA (Title I, Trade and Development Act of 2000; P.L. 106–200 [2]) is a piece of legislation that was approved by the U.S. Congress in May 2000. The purpose of this legislation is to assist the economies of sub-Saharan Africa and to improve economic relations between the United States and the region.[3] After completing its initial 15-year period of validity, the AGOA legislation was extended on 29 June 2015 by a further 10 years, to 2025.[4]

History

Rosa Whitaker, who served as the first ever Assistant U.S. Trade Representative (USTR) for Africa in the administrations of Presidents George W. Bush and William J. Clinton took the final lead in developing and implementing the African Growth and Opportunity Act (AGOA) following nearly a decade of leadership on the part of activists such as Paul Speck at Environmental and Energy Institute, and lawmakers, including Congressman Jim McDermott (a former Foreign Service medical officer based in Zaire) and Senator John Kerry, both senior lawmakers in the area of international trade. AGOA was initially signed by President Clinton into law in May 2000. The legislation is due to be reviewed again in 2015 and is expected to be renewed immediately. The revisions will make it easier to become eligible and will focus on improving the future business environment in developing African countries.

Eligibility

The legislation authorized the President of the United States to determine which sub-Saharan African countries would be eligible for AGOA on an annual basis. The eligibility criteria was to improve labor rights and movement toward a market-based economy. Each year, the President evaluates the sub-Saharan African countries and determines which countries should remain eligible.

Countries' inclusion has fluctuated with changes in the local political environment. In December 2009, for example, Guinea, Madagascar, and Niger were all removed from the list of eligible countries; by October 2011, though, eligibility was restored to Guinea and Niger, and by June 2014, to Madagascar as well. Notice was given that Burundi would lose its AGOA eligibility status as of 1 January 2016.[5]

Having AGOA eligibility does not imply automatic eligibility for a "Wearing Apparel" provision. To export apparel and certain textile to the United States under the AGOA duty-free, an eligible country must have implemented a "Visa System" that satisfies American authorities and proves compliance with the AGOA Rules of Origin.

Benefits and results

AGOA provides trade preferences for quota and duty-free entry into the United States for certain goods, expanding the benefits under the Generalized System of Preferences (GSP) program. Notably, AGOA expanded market access for textile and apparel goods into the United States for eligible countries, though many other goods are also included. This resulted in the growth of an apparel industry in southern Africa, and created hundreds of thousands of jobs. However, the dismantling of the Multi Fibre Agreement's world quota regime for textile and apparel trade in January 2005 reversed some of the gains made in the African textile industry due to increased competition from developing nations outside of Africa, particularly China. Some factories shut down in Lesotho, where most of the growth occurred. Orders from African manufacturers stabilised somewhat after the imposition of certain safeguard measures by U.S. authorities, but Africa's share of the U.S. market was still reduced after the phaseout.

AGOA has resulted in limited successes in some countries. In addition to growth in the textile and apparel industry, some AGOA countries have begun to export new products to the United States, such as cut flowers, horticultural products, automotive components and steel. While Nigeria and Angola are the largest exporters under AGOA, other countries, particularly South Africa's have been more diverse and unlike the former are not mainly concentrated in the energy sector. To some countries, including Lesotho, Swaziland, Kenya and Madagascar, AGOA remains of critical importance. Agricultural products are a promising area for AGOA trade; however much work needs to be done to assist African countries in meeting U.S. sanitary and phytosanitary standards. The U.S. government is providing technical assistance to AGOA eligible countries to help them benefit from the legislation, through the U.S. Agency for International Development (USAID) and other agencies. The U.S. government has established three regional trade hubs in Africa for this purpose, in Accra, Ghana; Gaborone, Botswana; and Nairobi, Kenya.

Initially, AGOA was set to expire in 2008, but the United States Congress passed the AGOA Acceleration Act of 2004, which extended the legislation to 2015. It has since been extended by 10 years from 2015 to 2025. The Act's apparel special provision, which permits lesser-developed countries to use foreign fabric for their garment exports, was to expire in September 2007. However, legislation passed by Congress in December 2006 extended it through 2012, and later to 2025 as part of the general AGOA extension in June 2015.

Every year an AGOA Forum is held, which brings together government leaders and private sector stakeholders from Africa and the United States. The Forum is held in Washington every other year, and in an AGOA eligible African country in the other years. So far, the Forum has been held four times in Washington, and once each in Mauritius, Senegal, Ghana, Kenya (2009), Zambia (2011), Ethiopia (2013) and Gabon (2015).

Statistics suggest a positive balance of trade for AGOA participant countries. In FY2008, the United States exported $17,125,389 in goods to the 41 AGOA countries, and the U.S. imported $81,426,951 for a balance of $64,301,562 in favor of the AGOA countries.

Criticism

Some allege that AGOA is in contradiction with WTO rules. Furthermore, it is seen as a one-sided agreement as there was little African involvement in its preparation.

AGOA has also been criticized for being "dominated by oil and raw materials" After the enactment of AGOA, "exports have increased by more than 500 per cent from around $8.2 billion then to $54 billion in 2011, although about 90 per cent of these are natural resources, mainly oil," wrote Andualem Sisay.

References

  1. ↑ http://www.brookings.edu/events/2012/06/13-africa-growth-opportunity
  2. ↑ Pub. L. 106-200 retrieved from the United States Government Printing Office website August 23, 2010
  3. ↑ B&FT. "US outlines new AGOA strategy". GhanaWeb.
  4. ↑ http://agoa.info/news/article/5740-obama-signs-trade-incl-agoa-worker-assistance-bills-into-law.html
  5. ↑ http://agoa.info/news/article/5897-text-of-notification-to-congress-on-burundi-s-suspension-from-agoa.html

External links

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