Building capacity to help Africa trade better

House of Representatives passes AGOA and MCA Modernization Act


House of Representatives passes AGOA and MCA Modernization Act

House of Representatives passes AGOA and MCA Modernization Act
Photo credit: Breezy Baldwin

On 17 January, the House of Representatives passed the AGOA and MCA Modernization Act (H.R. 3445), which strengthens both the African Growth and Opportunity Act (AGOA) and the Millennium Challenge Act (MCA). Together, these laws have helped increase trade between the U.S. and Africa.

Rep. Karen Bass (D-Calif.), Ranking Member of the House Africa Subcommittee, applauded the passage of the AGOA and MCA Modernization Act, which passed by a unanimous voice vote on the House Floor.

The bill, introduced by House Foreign Affairs Committee Chairman Ed Royce (R-Calif.), will make AGOA more effective by directing the President to establish a website with information regarding AGOA and by encouraging embassies in chosen countries promote export opportunities to the United States.

The bill also included Rep. Bass’s MCORE Act of 2015, which enables eligible countries with Millennium Challenge Corporation compacts to simultaneously enter one additional compact if the country is making considerable and demonstrable progress in implementing the terms of the existing Compact. This would promote and develop a stronger economic relationship between the sub-Saharan Africa and the United States.

“The African Growth & Opportunity Act and the Millennium Challenge Corporation have proven track records of spurring economic development. Expanding these programs advances our position as international leaders, strengthens our domestic job market and economy, while protecting our national security interests,” Rep. Bass said. “It is in our economic and political interest to expand our economic relationships with the nations of Africa and this legislation strengthens these key laws in that effort.”

For well over a decade, AGOA has served as the key foundation to U.S.-Africa trade and investment. The AGOA Enhancement Act hopes to build on and improve this successful law. Rep. Bass has devoted a large portion of her time in Congress to pushing for the extension of AGOA. Working hand-in-hand with Democratic and Republican members of Congress, business and labor officials as well as the AGOA ambassadors and members of the African diaspora and civil society to push for the reauthorization of AGOA, earning its passage in June of 2015.

House votes to strengthen U.S.-Africa trade

On the House floor prior to the vote, Chairman Royce delivered the following remarks (as prepared for delivery):

“I have been honored to serve as the Chairman of the House Foreign Affairs Committee for the past five years. Over this period, there’s been no shortage of threats to U.S. national security.

But there have also been great opportunities – opportunities to make America safer and more prosperous through strategic investments in diplomacy and development. This bill is one example.

The AGOA and MCA Modernization Act seeks to facilitate trade and private sector-led growth in poor but relatively well-governed countries, particularly in Africa, so they can grow their own way out of poverty. It seeks to help countries graduate from the need for foreign aid while simultaneously opening doors for American businesses to break into the most promising emerging markets.

Through AGOA, goods produced in eligible African countries enter the U.S. on a duty-free basis. To be eligible, countries must be committed to the rule of law, eliminating barriers to U.S. trade and investment, combating corruption and supporting counterterrorism activities. So AGOA advances U.S. interests on many levels.

I am proud to have been a member of the AGOA coalition from the beginning, and I have witnessed its transformative impact firsthand.

Yet despite its benefits, AGOA remains underutilized in too many countries. Prior to its reauthorization in 2015, I set out to learn why. I traveled to southern and eastern Africa, where I met with U.S. and African trade officials, business leaders and entrepreneurs and visited garment factories, power stations and trade hubs. I heard a lot about poor infrastructure, competition with China and burdensome U.S. regulations that are difficult to understand.

Then I walked into an artisan shop in Addis Ababa, run by a remarkable woman, Sara Abera. I learned that she, in fact, had benefitted from technical assistance through the U.S.-East Africa trade hub and was now exporting to the U.S. through AGOA. But I also learned that she was an exception – not the rule. Other than Sara, very few business leaders and entrepreneurs seemed to have knowledge of or access to AGOA.

To fix this, the bill before us today would make information about AGOA available on an easily accessible public website. This bill also urges U.S. embassies in eligible countries to more consistently promote AGOA and trade hubs, and seeks to bring greater transparency to commitments made at annual AGOA forums.

This bill also strengthens the Millennium Challenge Corporation, which is already one of our most effective tools for incentivizing policy reform and unlocking market-based growth in developing countries. It increases MCC’s flexibility to promote regional trade, collaboration and economic integration by allowing up to two simultaneous compacts with an eligible country. And it also improves transparency and accountability by streamlining and strengthening Congressional oversight.

This is the commonsense approach the bill promotes. By helping communities grow away from aid and toward trade through cost-free policy changes, we will ultimately save American taxpayers money.

Trade and free-market principles have helped lift more than one billion people out of poverty over the past decade alone. But it is not just this humanitarian goal that leads us to invest in communities abroad. It is clear that investments targeted toward growing healthier, more stable societies also help advance U.S. security and economic interests.

It is therefore vital that we ensure that two of our most impactful development and trade facilitation tools – AGOA and MCC – are efficient, effective and fully utilized.

This bill will do exactly that. I urge Members to support this important measure, and I reserve the balance of my time.”

[Note by AGOA.info: equivalent legislation needs to also pass the Senate, before it can be presented for signature and become law. The Senate version being considered is S.832-115th Congress]


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