Africa (Commonwealth) _A trade agreement that allows eligible African countries’ goods duty-free access to the US market should be extended for another 16 years, according to Democratic Senator Chris Coons, a key voice on US-Africa relations. The two-decade-old African Growth and Opportunity Act (AGOA), which is set to expire in 2025, is being renegotiated.
African nations seek a 10-year extension of the treaty ahead of the 2024 presidential election in the United States. President Joe Biden’s administration is likewise seeking continuation of the program, but with certain conditions.
Coons, a member of the Senate Foreign Relations Committee, has introduced legislation to merge AGOA with the African Continental Free Trade Agreement, which encompasses the bulk of African countries.
According to a draft version of the bill obtained exclusively by Reuters, the program would allow countries to stay until they are determined to be high-income for five years, rather than removing them if they reach that threshold for a single year.
Also read:
US-AFRICA (AGOA) TRADE SUMMIT KICKED OFF
IMPORTANCE OF DEBT FINANCING FOR AFRICAN BUSINESSES
In a statement, Coons stated that his AGOA Renewal Act will continue the program, rewarding investments that would generate employment, boost economic development, and improve our position in the area. The committee’s chairman, Ben Cardin, favors the program’s reauthorization but feels the qualifying requirements should be changed, according to an aide.
The panel’s top Republican, James Risch, wrote to Biden administration officials on Thursday saying he supports the program’s early reauthorization but would like to see revisions to its eligibility criteria and other reforms. Under the initiative, more than $10 billion in African products will enter the United States duty-free in 2022. The agreement has bipartisan backing in Washington, but there are disagreements on how to renew it.
U.S. Trade Representative Katherine Tai said on Saturday that AGOA should try to increase participation by qualifying nations, but she did not elaborate. American business organizations have stated that confidence regarding AGOA is required so that African nations may benefit from a worldwide campaign to lessen reliance on Chinese manufacturing.
The African Growth and Opportunity Act, or AGOA, was passed by the United States Congress in May 2000. The claimed goal of this act is to help Sub-Saharan African economies and to promote economic links between the US and the area. After completing its initial 15-year period of validity, the AGOA Act was extended by ten years on June 29, 2015, to 2025.
President Clinton signed AGOA into law in May 2000. Following a lengthy discussion, the Act was examined again in 2015 and extended for ten years. The changes made it easier to qualify and aimed to improve the future business climate in developing African countries.
The expiry date of 2025 casts doubt on the viability of US-Africa ties. This is attributable, in part, to Africa’s shifting trading environment; for example, intracontinental and intercontinental economic integration has risen dramatically. Similarly, trade links are evolving from unilateral preferences to reciprocal interactions with the completion of economic cooperation agreements between the European Union and African, Caribbean, and Pacific (ACP) countries.
It may be desirable to explore reforming US-Africa economic connections outside of the AGOA in order for African producers and manufacturers to become more completely integrated into supply chain networks. The United States and nations in Sub-Saharan Africa have already considered potential post-AGOA policy designs.
President Joe Biden called for the withdrawal of Gabon, Niger, and the Central African Republic from AGOA in November 2023, alleging human rights breaches.
