African Growth and Opportunity Act (AGOA): Report of the Government of the United States for the Year 2014
On 27 May 2009, the United States was granted a waiver of its obligations under paragraph 1 of Article I and paragraphs 1 and 2 of Article XIII of the GATT 1994 to the extent necessary to permit the United States Government to provide duty-free treatment to eligible products of certain sub-Saharan African countries as authorized by the provisions of the African Growth and Opportunity Act (AGOA) without being required to extend the same duty-free treatment to like products of any other Member. This waiver expires 30 September 2015.
Under the terms of this waiver, the United States is required to submit to the General Council an annual report on the implementation of the trade-related provisions of AGOA with a view to facilitating the annual review provided for in paragraph 4 of Article IX of the WTO Agreement. This report covers calendar year 2014.
Duty free treatment under AGOA
AGOA was enacted on 18 May 2000. Section 506A of the Trade Act of 1974, as added by section 111 of AGOA, authorizes the President of the United States to provide duty-free treatment to certain products from eligible sub-Saharan African beneficiary countries, in addition to the products designated for duty-free treatment for these countries under the US Generalized System of Preferences (GSP). The President exercised this authority on 18 December 2000, when he designated 1,835 products as eligible for duty-free treatment in the United States when originating from an AGOA beneficiary country. Section 103 of the Trade Preferences Act of 2015 extends preferences for these products and for GSP products to AGOA beneficiary countries through 30 September 2025.
Section 506A of the Trade Act of 1974 also authorizes the President of the United States to designate certain sub-Saharan African countries as eligible for benefits under AGOA. In June 2014, President Obama withdrew Swaziland’s eligibility to receive AGOA benefits in 2015. On 23 December 2014, President Obama reinstated Guinea-Bissau’s eligibility for AGOA benefits effective immediately, and withdrew The Gambia and South Sudan’s AGOA eligibility, effective 1 January 2015. As of 30 June 2015, 39 sub-Saharan African countries were eligible for AGOA trade benefits. These countries are: Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Chad, Comoros, the Republic of the Congo, Côte d’Ivoire, Djibouti, Ethiopia, Gabon, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Tanzania, Togo, Uganda, and Zambia.
Section 112(a) of AGOA provides duty-free treatment for certain textile and apparel products from beneficiary countries that adopt certain procedures to prevent illegal transhipment. Section 112(c) of AGOA provides duty-free treatment for apparel made in “lesser developed” beneficiary countries regardless of the source of the fabric or yarn, subject to an annual quantitative limit through 30 September 2025.
Since its inception in 2000, the AGOA program has helped African beneficiary countries to expand and diversify their exports to the United States. By providing new market opportunities for African exports – especially of non-traditional and higher-value products – AGOA has helped African firms become more competitive internationally, thereby bolstering African economic growth and helping to alleviate poverty in one of the poorest regions of the world. In 2014, over 91% of US imports from AGOA-eligible countries entered the United States duty-free, under AGOA, GSP, or other zero-tariff provisions.
In 2014, US imports under AGOA fell 52.2% from $24.8 billion to $11.8 billion, due in most part to a large drops in imports of mineral fuels and motor vehicles and their parts (HTS chapter 27 and 87 respectively). Nevertheless, mineral fuels still accounted for almost 75.9% of US imports under AGOA in 2014, compared to approximately 86% in 2013. Other leading categories of US imports include apparel (HTS chapters 61 and 62), iron and steel products (HTS chapter 72), and edible fruits and nuts (HTS chapter 8). Non-oil imports under AGOA (not including its related GSP provisions) nearly quadrupled from 2001 to 2014, rising from $752 million in 2001 to $2.9 billion in 2014. South Africa is currently the largest non-oil AGOA beneficiary. Other leading beneficiary countries are Angola, Nigeria, Chad, Gabon, Kenya, the Republic of Congo, Lesotho, and Mauritius.
Motor vehicles and their parts was the leading AGOA non-oil product sector for most of the period 2001-2014. Imports under AGOA in this product sector reached approximately $1.3 billion in 2014. US imports of agricultural products, metals, certain footwear, and certain chemicals also grew during this period.
Another leading non-oil sector for the period 2001-2014 was apparel. Apparel represented 25% to 79% of total non-oil AGOA imports (not including its related GSP provisions) during this period. Imports of apparel under AGOA rose from $356 million in 2001 to $985 million in 2014. Eighteen AGOA beneficiary countries have shipped apparel products to the United States under AGOA since 2001, led by Kenya, Lesotho, Mauritius, Tanzania, Ethiopia and Botswana. The leading
The US Government has provided substantial trade-related technical assistance to AGOA beneficiary countries to help them make the most of the trade opportunities available under AGOA. For example, under the four-year, $120 million African Competitiveness and Trade Expansion (ACTE) initiative, the US Agency for International Development operates three Regional Hubs for Global Competitiveness – in Botswana, Kenya, and Ghana – that assist African governments and businesses to identify and develop market opportunities in the United States for African products, especially value-added and non-traditional products such as those covered under AGOA.
Statistical annexes are provided to present a detailed description of the trade aspects of the AGOA programme from 2006 to 2014.