Building capacity to help Africa trade better

An overview of AGOA’s performance, beneficiaries, renewal provisions and the status of South Africa

Trade Reports

An overview of AGOA’s performance, beneficiaries, renewal provisions and the status of South Africa

An overview of AGOA’s performance, beneficiaries, renewal provisions and the status of South Africa

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The African Growth and Opportunity Act (AGOA), a piece of United States legislation, was signed into law by the then President of the United States (US) Bill Clinton on 18 May 2000. AGOA marked a significant and fundamental shift in US policy towards, and engagement with, African countries. Whereas previously US relations with Africa were largely influenced by Cold War and related prerogatives, and support for African countries at the time focused less on trade and economic development but more perhaps on emergency relief, poverty alleviation and other mostly ad-hoc measures, AGOA re-aligned this relationship towards one of greater trade and economic development by offering – unprecedented in terms of scale – preferential market access.

When reflecting on AGOA one can conclude that AGOA’s trade performance and impact merits two perspectives; one of (unfulfilled) potential that consequently views AGOA as a broad failure, and one of unprecedented opportunity that – while clearly under-utilised – has provided beneficiary countries with just short of $50 billion of utilised non-oil duty-free market access over the period 2001-2014, and which has acted as a driver for continued adherence to various governance, human rights and economic standards.

AGOA, while generous in intent and application, also contains many gaps in coverage and one of its few weaknesses from the perspective of some beneficiary countries (when seen in the context of the relatively low utilisation rates) would include the fact that a number of so-called ‘sensitive’ agricultural products remain outside of AGOA coverage or remain subject to tariff rate quotas; these are often high-duty products that might otherwise be of keen interest to African countries.

And while it remains tempting to simply consider this in the context of the non-reciprocal benefits extended through AGOA, the legislation’s “strings attached” (especially around its extended eligibility requirements which some may argue constrain national policy space, or the more implicit political dimension underlying AGOA) means that these preferences are not simply a ‘free’ gift. Also, in reviewing AGOA, the fact that AGOA builds on the US’ own pre-existing GSP preferences, which already gave LDC countries significant access to the US market (again, subject to eligibility criteria), provides some additional perspective.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.


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