US government keeps AGOA eligible sub-Saharan African countries at 40
The US government has kept the number of sub-Saharan African countries eligible to trade under the African Growth and Opportunity Act (AGOA) at 40.
As of June 2011, there were 37 countries, but on October 25, 2011, President Barack Obama signed a presidential proclamation designating Côte d’Ivoire, Guinea and Niger as eligible for AGOA benefits.
AGOA was signed into law by President Bill Clinton in May 2000 with the objectives of expanding US trade and investment with sub-Saharan Africa.
According to information available on the AGOA website, the programme expands the list of products which eligible sub-Saharan African countries may export to the United States subject to zero import duty under the Generalized System of Preferences (GSP). While general GSP covers approximately 4,600 items, AGOA GSP applies to more than 6,400 items. AGOA GSP provisions are in effect until September 30, 2015.
In 2010, over 93 percent of US imports from AGOA-eligible countries entered duty-free, either under AGOA, GSP, or zero-duty Most Favored Nation rates.
AGOA, it says also provides reforming African countries with the most liberal access to the US market available to any country or region with which the United States does not have a Free Trade Agreement. It supports US business by encouraging reform of Africa’s economic and commercial regimes, which will build stronger markets and more effective partners for US firms.
Total two-way goods trade with sub-Saharan Africa countries during 2010 was $82 billion. US imports under AGOA totalled $44.2 billion. Non-oil imports under AGOA totalled $4 billion and included value-added products such as apparel, footwear, processed agricultural products and manufactured goods, the information adds.
The top five beneficiary countries were Nigeria, Angola, South Africa, Republic of Congo and Chad. Other leading AGOA beneficiaries, it adds.
Forty sub-Saharan African countries will remain eligible in 2012 for US trade preferences and benefits aimed at improving lives and livelihoods on the continent.
US Trade Representative Ron Kirk announced December 29, 2011 that during the 2011 review process, President Obama determined that all the countries currently eligible for trade preferences and other benefits under the African Growth and Opportunity Act (AGOA) would remain eligible and that no new countries would be added as AGOA beneficiaries.
Each year the US administration examines whether the countries named in the act had met AGOA’s eligibility criteria. Those criteria include establishing, or making continual progress toward establishing, a market-based economy, rule of law, economic policies to reduce poverty, protection of internationally recognized worker rights and efforts to combat corruption.
Countries eligible for AGOA also may not engage in activities that undermine US foreign policy interests, or engage in gross violations of internationally recognized human rights, the US government states.
However, not many of these African countries are making the most of this arrangement. During the first Africa Trade Forum in Addis Ababa, Ethiopia November 2011 some participants expressed disappointment in the fact that AGOA is not benefitting African countries as it should.
Some participants blamed the foreign missions of African countries in the US for being inefficient in disseminating information about the programme to their home countries.
Poor communication from the Embassies in Washington DC was cited as a factor that has hampered African countries from enjoying the full benefits of AGOA.
Meanwhile, despite the exponential increase in the volume as well as the value of goods and services traded across borders, Africa’s share in global trade continues to decline.
Global trade (in current prices) has increased from $13 trillion in 2000 to an estimated $30 trillion in 2010, but Africa’s share in world trade has been in decline since 1980 and currently stands at about three per cent, according to the African Trade Policy Centre (ATPC) of the United Nations Economic Commission for Africa (UNECA).
The ATPC says on its website, “The continent remains heavily dependent on the export of a few primary commodities, most of which until recently had suffered significant decline in prices over the years, leading to large trade losses and worsening balance of payments.”
By Emmanuel K. Dogbevi