The African Growth and Opportunity Act (Agoa) has to be improved.
This was the message of a briefing by United States officials ahead of this week’s Agoa forum in Johannesburg, where the trade pact’s renewal will be discussed.
The trade deal — which provides eligible sub-Saharan African countries with duty-free access to the US market — is due to expire in 2025. Agoa beneficiaries will be asking for the Act, which was signed into law during Bill Clinton’s administration, be renewed for another 10 years.
“When Agoa was enacted in 2000, we hoped that it would be a gamechanger for the continent in terms of our relationship with individual countries and with the ability to support regional integration across the continent,” said assistant US trade representative for Africa Constance Hamilton during the briefing.
But she noted that after 25 years very few countries have taken full advantage of Agoa.
“So the question I think that is going to drive the conversation at the Agoa forum in Johannesburg in just a few days is how can we improve the programme,” Hamilton said.
Joy Basu, deputy assistant secretary at the US bureau of African affairs, echoed this sentiment. She also underlined that fostering ties with economies in Africa is a priority of US president Joe Biden’s administration.
She noted that the timely renewal of Agoa is also a goal of the Biden administration, but this falls with the US congress. The US is nearing an election in 2024, the outcome of which could radically change Agoa’s prospects.
Hamilton noted concerns that efforts to tweak the Act may result in congress taking its time with it. “But we do believe that not addressing and not trying to change the programme and make it better is a wasted opportunity.”
Agoa beneficiaries are hoping for the earlier renewal of the deal. This will give US investors greater certainty about Africa’s investment prospects, Trade and Industry Minister Ebrahim Patel said during a briefing last week.
According to Patel, the forum will take place as Africa seeks to redefine its role in the global economy. A key element of this is the African Continental Free Trade Area (AfCFTA), which aims to boost regional trade on the continent.
The forum, Patel said, will allow stakeholders to find ways to get more out of Agoa. To this end, member states will seek to make Agoa’s rules more user-friendly, to add more products to the duty-free list, to attain all beneficiary countries and for Agoa to be complemented by investment and measures that allow more medium-sized firms to access the US market.
Hamilton said she hoped that congress would take the AfCFTA, and the continent’s move towards regional integration, into account in its reworking of Agoa.
“We’re really supportive of the AfCFTA,” Basu said, “and we hope that Agoa can be complementary to it.”