U.S. trade-preference program for African countries still boosting trade
May 13, 2010
Washington, D.C. – United States Trade Representative Ron Kirk presided at a ceremony on Capitol Hill today heralding the 10th Anniversary of the enactment of the African Growth and Opportunity Act (AGOA) trade preference program. Ambassador Kirk was joined by several past and present Members of Congress – both Democrats and Republicans – who played key roles in the drafting, passage and implementation of AGOA, including Congressman Sander Levin, Chairman of the House Ways and Means Committee, Congressman Charles Rangel, Congressman Dave Camp, Ranking Member of the Ways and Means Committee, Congressman Kevin Brady, Congressman Jim McDermott, Congressman Al Green, Congresswoman Eddie Bernice Johnson, Congresswoman Carolyn Kilpatrick, Congresswoman Gwen Moore Congressman Donald Payne, Congressman Ed Royce, Congresswoman Linda Sanchez and Former Chairman Bill Thomas, Ways and Means Committee. Others participating in the event included members of the African Diplomatic Corps and representatives of the private sector and civil society organizations.
“By opening the American market to almost all goods from beneficiary sub-Saharan African countries, AGOA has helped Africans use trade to fight poverty and grow their economies – and AGOA is also good for U.S. business,” said Ambassador Kirk. “By promoting an improved business environment in many African countries, AGOA has opened up new opportunities for U.S. exports. The result is a substantial increase in two-way U.S.-Africa trade since 2000, with African countries now exporting to the United States a more diverse range of value-added products. The success of AGOA is a powerful demonstration of the linkage between trade and economic development – and more can be done to help African countries make the most of the opportunities AGOA provides.”
Background on AGOA:
Congress passed the AGOA legislation in early 2000 with strong bipartisan support. President Clinton signed the AGOA bill into law on May 18, 2000. Since then, three successive administrations, including the Obama Administration, have actively implemented AGOA, working closely with African partners and other stakeholders to help them make the most of the program.
AGOA builds on the existing Generalized System of Preferences program to allow eligible sub-Saharan African countries to export almost any product to the United States duty-free (nearly 6,500 tariff lines), with a special focus on value-added and non-traditional products such as apparel, footwear, and processed agricultural goods. Since AGOA’s enactment, U.S. non-oil imports from sub-Saharan Africa under AGOA have more than doubled, reaching $3.4 billion in 2009. Among the sectors that have experienced sizable increases under AGOA are apparel, footwear, vehicles, fruits and nuts, prepared vegetables, leather products, cut flowers, prepared seafood, and essential oils.
Several countries have witnessed noteworthy increases in exports under AGOA:
— South Africa exports the widest range of AGOA products, including vehicles, citrus, wine, and footwear;
— Lesotho has become the leading sub-Saharan African exporter of apparel to the United States;
— Kenya’s AGOA exports include fresh cut roses, sport fishing supplies, nuts, plastic products, jewelry, and essential oils, as well as apparel;
— Ghana’s value-added exports under AGOA include chocolates, jewelry, baskets, and preserved pineapple.
AGOA requires the President to determine annually whether sub-Saharan African countries are eligible for benefits under AGOA based on their progress in meeting certain criteria set out in the Act, including progress toward implementing economic reforms, establishing the rule of law, reducing poverty, and strengthening labor and human rights. There are currently 38 sub-Saharan African countries eligible for AGOA.
The United States has provided substantial trade capacity building assistance to African governments and firms to help them utilize AGOA trade preferences. Much of this assistance is carried out by experts at four regional competitiveness hubs, managed by USAID, that work with African governments and businesses to identify and develop AGOA trade opportunities. The United States provided over
$1 billion dollars for trade capacity building activities in sub-Saharan Africa in 2008, including trade-related assistance provided under Millennium Challenge Corporation compacts with African countries.
AGOA also established an annual, high-level dialogue between officials of the United States and AGOA beneficiary countries: the AGOA Forum. The next AGOA Forum, to be held in Washington, DC on August 2-3, 2010, will bring together Cabinet-level officials from the United States and AGOA beneficiary countries, along with representatives of the African and American private sector and non-governmental organizations, to discuss issues related to U.S.-sub-Saharan African trade and economic cooperation.
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