U.S. Trade Representative Katherine Tai expressed the United States' desire for a "more practical and efficient" trade program with Africa on Saturday, as discussions are ongoing to modernize a
duty-free initiative that has been in place for over two decades.
The African Growth and Opportunity Act (AGOA), which provides duty-free access to the U.S. market for exports from eligible African countries, is set to expire in September 2025. Current talks are focused on its renewal and potential reform.
AGOA has been reauthorized twice before, in 2004 and 2015. Tai has been in Johannesburg, South Africa, concluding three days of discussions with African trade ministers regarding the future of the program and a possible third reauthorization.
"We would like to see this program have more than just symbolic significance. We want it to be more practical and effective," Tai conveyed to journalists.
Under the AGOA program, over $10 billion worth of African exports entered the United States duty-free last year. Nevertheless, in many areas, AGOA, established in 2000, has fallen short of its potential.
Despite enduring bipartisan support from U.S. lawmakers who consider AGOA vital in countering China's influence in Africa, there are differences in Washington regarding the need for updates.
African nations, fearing that too many alterations could hinder renewal in Congress, are advocating for an early 10-year extension. They argue that improvements can be implemented once the program is reauthorized.
However, the Biden administration is calling for changes as part of the renewal process.
"I don't quite know how you would enhance it without addressing it in the statute," Tai stated.
A revamped AGOA should strive to enhance the program's utilization by eligible countries and should account for the recent establishment of the African Continental Free Trade Area, according to Tai.
It should also ensure that countries continue to receive benefits as they achieve greater prosperity and promote greater involvement of small businesses.
Uninterrupted Investment
U.S. business associations emphasize the importance of AGOA's certainty for Africa to seize the current global push by companies to reduce their reliance on Chinese manufacturing.
"American businesses are in favor of AGOA's reauthorization. They have been unequivocal about it, regardless of the sector," remarked British Robinson, who leads the U.S. administration's Prosper Africa trade and business initiative.
With the renewal still uncertain, businesses are already holding off on new investments, as noted by South African Trade Minister Ebrahim Patel.
"An early reauthorization will restart those investments," he mentioned.
Recent initiatives in the U.S. Congress support the notion of a swift AGOA renewal.
On Friday, Gregory W. Meeks, a New York Democrat, and Michael McCaul, a Texas Republican, who are respectively the Ranking Member and Chairman of the U.S. House of Representatives Foreign Affairs Committee, expressed their agreement that AGOA could be improved. However, they emphasized that the primary concern should be ensuring a successful and timely reauthorization, as stated in a joint statement.
Nonetheless, political gridlock in recent months has made it challenging to pass even the most critical legislation, raising concerns that AGOA might face difficulties in making its way onto the Congressional agenda. Photo by Inter-American Dialogue, Wikimedia commons.