The Africa Union (AU) has called on the United States Congress to review its flagship trade programme, the African Growth and Opportunity Act (AGOA), for the continent for at least ten more years.
AU’s top trade official made this disclosure on Thursday, adding that any modifications to the initiative should only be considered later.
Addressing the commencement of a three-day gathering of African trade ministers and U.S. officials, Albert Muchanga, the AU Trade Commissioner, also emphasized that the United States would not receive tariff-free access to the upcoming African free trade zone.
Initially launched in the year 2000, the African Growth and Opportunity Act (AGOA) allows qualifying African nations to export their goods to the United States, the largest consumer market globally, without incurring duties. AGOA’s current expiration date is September 2025, and negotiations are in progress to consider its potential renewal.
- “An extension of 10 to 20 years is very critical to the investment community. Anything lower than that would generate uncertainty,” Muchanga told the ministers, who gathered in Johannesburg to form a common position on the future of the programme.
Talks on a possible renewal
As part of the effort to rally for a possible renewal of the trade deal, a group of African ministers is scheduled to hold meetings with U.S. officials, including U.S. Trade Representative Katherine Tai, on both Friday and Saturday.
U.S. legislators and the Biden administration have expressed their backing for the renewal of AGOA, which facilitated the duty-free entry of over $10 billion in African exports into the United States last year.
Constance Hamilton, the Biden administration’s top trade official for Africa, said last week that Congress should consider changes that would “make the programme more impactful”.
However, African governments and certain U.S. industry associations caution that any efforts to amend AGOA during its renewal phase may potentially hinder the reauthorization process.
- “If there are any enhancements to be made, those should be done after the extension,” Muchanga said.
Africa is in the process of setting up a new continent-wide free trade area, known as the AfCFTA, that aims to bring together 1.3 billion people in a $3.4 trillion economic bloc.
Once fully implemented it will be the largest free trade area since the establishment of the World Trade Organization.
What you should know
The African Growth and Opportunity Act, or AGOA, was enacted in 2000 during the presidency of Bill Clinton.
This trade initiative aimed to strengthen economic connections between the United States and Sub-Saharan African nations while supporting the economic development of African countries.
AGOA provides duty-free access to the U.S. market for most agricultural and manufactured products exported by eligible African countries.
It has been renewed twice and is due to expire in September 2025.
About 35 African countries, including Nigeria, are eligible. Countries can lose and regain eligibility based on criteria including economic policies and protection of human rights.