As 2015 approaches the African Growth and Opportunity Act is due for renewal in September 2015 and we would like you to be a part of the discussion to make the act better and improve opportunities for both US and Sub-Saharan Africa (SSA). Currently there are 39 eligible sub-Saharan African countries to export most products duty-free to the U.S.
The goal of AGOA is to increase economic growth and freedom in SSA. The benefits included lowering tariff costs and increasing employment in SSA countries and build relationships with American companies. The agreed concluded that the SSA countries should uphold rule of law and political parties. The other agreement was that SSA upholds intellectual property rights. The act supported investment in SSA by extending loans and creating funds for infrastructure.
Those against AGOA argue that it discriminates against non AGOA members who are also developing countries. Furthermore they argue that it does not protect against human rights or environmental violations in SSA. Others argue that it does not protect American jobs and businesses in the apparel industry. There have been reports that show that Chinese products are brought to Africa and labeled made in Africa to mask their origins and raise the levels of apparel goods from SSA. Those who argue against the Act also suggest that AGOA does not promote regional collaboration and integration among SSA countries.
Barriers to sourcing from SSA include international and domestic policies, geography and freedom infrastructure. The other criticism is that imports from the SSA come from only a few countries.
Total African exports under AGOA have more than quadrupled since the program’s inception in 2000. It is estimated that AGOA is responsible for 350,000 direct and one million indirect jobs in Africa as well as about 100,000 jobs in the United States. In several African countries, AGOA is transforming, diversifying and modernizing economies and work forces.
AGOA has allowed SSA to move from a place of aid to trade and help SSA countries to engage in the global economy and develop skills that create stable growth in the African economies in the area of human resource development in reporting and budgeting and trade negotiation.
There seems to be reluctance on the part of US businesses to invest in infrastructure projects because the legislation is not permanent. Temporary legislation will not guarantee that they can recoup their investment within the time allotted. Tax breaks would also attract US companies to invest in SSA. Political instability has also been a deterrent and risk for US companies. Marketing is needed in businesses where SSA is shown as a place to do business and ideas must come out of SSA businesses on how to encourage these types of investments to increase economic development.
Results of AGOA thus far
- U.S. total trade with sub-Saharan Africa has more than doubled, from $28.2 billion to $72.3 billion in 2012.
- AGOA enabled U.S. exports to the region to more than triple from $6.9 billion in 2001 to $22.6 billion in 2012.
- AGOA imports (including GSP) to the United States have climbed to $34.9 billion in 2012, more than four times the amount in 2001
|AGOA ELIGIBLE COUNTRIES|
|Republic of Congo||Sao Tome|