The African Union (AU) has urged the United States Congress to extend its flagship trade program, the African Growth and Opportunity Act (AGOA), for at least another decade. The AU’s top trade official said any changes to the initiative should be considered later and that the US would not get tariff-free access to the upcoming African free trade zone.
AGOA, launched in 2000, allows qualifying African countries to export their goods to the US, the world’s largest consumer market, without paying duties. The program is due to expire in September 2025, and talks are underway to renew it.
The AU Trade Commissioner, Albert Muchanga, told a meeting of African trade ministers and US officials in Johannesburg on Thursday that a 10 to 20-year extension was vital for the investment community. “Anything lower than that would generate uncertainty,” he said.
The ministers, who gathered to form a common position on the future of AGOA, are expected to meet with the US Trade Representative, Katherine Tai, on Friday and Saturday.
The Biden administration and US lawmakers have expressed support for renewing AGOA, which facilitated the duty-free entry of over $10 billion in African exports into the US last year. However, Constance Hamilton, the US top trade official for Africa, said last week that Congress should consider modifications that would “make the program more impactful.”
Some African governments and US industry associations have warned that any attempts to alter AGOA during the renewal process could jeopardize the reauthorization. “If there are any enhancements to be made, those should be done after the extension,” Muchanga said.
Africa is creating a new continent-wide free trade area, known as the AfCFTA, to bring together 1.3 billion people in a $3.4 trillion economic bloc. Once fully implemented, it will be the largest free trade area since the establishment of the World Trade Organization.
Muchanga emphasized that the US would not receive preferential treatment in the AfCFTA and that any trade agreement between the two parties would have to be reciprocal. He said the AU was open to negotiating a free trade deal with the US after the AfCFTA was fully operational.
AGOA has been credited with boosting trade and investment between the US and Africa, creating jobs, and supporting economic development on the continent. According to the US government, AGOA has supported about 300,000 direct jobs in Africa and an estimated 120,000 jobs in the US.
The AU hopes that the extension of AGOA will help African countries recover from the economic impact of the COVID-19 pandemic, which has reduced trade and growth across the continent. The AU also hopes that AGOA will complement the AfCFTA and foster deeper integration between Africa and the US.
Source: Nairametrics
