The US government is to review the African Growth and Opportunity Act (AGOA), under which African exports to the United States have tripled. The Act is due to expire in 2015, but will be extended, according to the office of the US Trade Representative.
“The Administration has already committed to have a seamless renewal of AGOA, but we want to make sure that we know all that AGOA has done, we want to know what the current challenges are to its further utilization, and this public review process will help us to do that. And of course, all of this will be towards the end of working with the U.S. Congress because AGOA is their baby as well as ours,” said Florizelle Liser, Assistant US Trade Representative for Africa.
98 percent of products shipped from Africa to the US are covered by AGOA and it applies to 39 sub-Saharan African countries.
“… We have to look at how we can make it better, how we can fulfill its promise and potential, and we need to get that right. As AGOA is extended, we want to make sure that Africans are in a position to compete in the global economy,” Ms. Lizer said.
The US government says it is supporting African states as they strive to put into place economic and political reforms, improve the business and investment climates, establish rule of law and improve governance, address corruption and lack of capacity to produce value-added products.
It is also supporting regional economic integration.
AGOA is intended to allow African producers fair access to the US and ensure a level playing field for US companies doing business in Africa.
“We recognize that Africa is a continent of vast opportunities and we want to make sure our traders and investors here in the U.S. have an opportunity to work with Africans and take advantage of this continent that is definitely on the rise,” said Ms. Liser.
When AGOA was introduced, African exporters were expected to flood the US market, but these expectations were not realized, as few African countries had the capacity to produce suitable products for Western markets.
“They were producing very beautiful African textile products. Leather shoes were being produced in a number of African countries – Nigeria, Ethiopia, Tanzania, et cetera,” said John Andersen, Acting Assistant Secretary for Market Access and Compliance with the U.S. Department of Commerce.
“However, they were not making Western-style leather footwear,” he said.
Nevertheless, African countries are now producing more and exporting more to the US as a result of technical assistance and investment, enabling them to produce for the global markets.
In 2012, eligible countries exported nearly $35 billion in products to the US market under AGOA and its related General System of Preferences (GSP) provisions.
Total exports under AGOA have risen by more than 300 percent since the program’s start.
Although petroleum products accounted for 84 percent of AGOA imports to the US in the same period, the program has helped promote other value-added exports such as vehicles, clothing, footwear, processed agricultural products and manufactured goods.
Over the same period, non-oil exports totaled $4.7 billion, rising by more than 250 percent since AGOA’s inception.
An AGOA forum will be held in Addis Ababa from August 9th to 13th with the theme ‘Sustainable Transformation Through Trade and Technology’.
The forum’s aim is to reflect the transformation the continent has seen in the decade since AGOA was passed.
All the events will take place at the African Union Conference Center in Addis.