African Growth and Opportunity Act
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The African Growth and Opportunity Act, or AGOA (Title I, Trade and Development Act of 2000; P.L. 106–200 ) is a legislation that has been 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.
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.
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.
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 about origin.
Benefits, results and criticism
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[which?] 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, automotives and steel. While Nigeria and Angola are the largest exporters under AGOA, South Africa's have been the most 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 is 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. 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.
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 in Mauritius, Senegal, Ghana, Kenya (2009) and Zambia (2011).
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.
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.
- Pub. L. 106-200 retrieved from the United States Government Printing Office website August 23, 2010
- B&FT. "US outlines new AGOA strategy". GhanaWeb.
- AGOA website
- Complete resources on AGOA
- Agoa 2013: Oil 'too dominant' in trade deal with the US
- Pub.L. 106–106, Full text of the legislation