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USTR Begins Review of South Africa’s AGOA Eligibility

Tuesday, July 21, 2015
Sandler, Travis & Rosenberg Trade Report

USTR is conducting an out-of-cycle review of the eligibility of South Africa to receive benefits under the African Growth and Opportunity Act, as requested by the Trade Preferences Extension Act of 2015. USTR will hold a public hearing in connection with this review Aug. 7. Requests to appear at the hearing as well as pre-hearing briefs, statements and comments are due by Aug. 5, while post-hearing briefs, statements and comments may be filed by Aug. 12.  

The president may designate a country as a beneficiary sub-Saharan African country eligible for AGOA benefits if he determines that the country meets the eligibility criteria set forth in section 104 of AGOA and section 502 of the 1974 Act. Section 104 of AGOA requires countries to establish or make continual progress toward establishing, among other things, a market-based economy; the rule of law, political pluralism and the right to due process; the elimination of barriers to U.S. trade and investment; economic policies to reduce poverty; a system to combat corruption and bribery; and the protection of internationally recognized worker rights. In addition, the country may not engage in activities that undermine U.S. national security or foreign policy interests or engage in gross violations of internationally recognized human rights.

Recognizing that concerns have been raised about the compliance with section 104 of AGOA of certain beneficiary sub-Saharan African countries, section 105(d)(4)(E) of the TPEA requires the president to initiate an out-of-cycle review to examine whether South Africa is meeting the eligibility requirements set forth in section 104 of AGOA and section 502 of the 1974 Act.

If a determination is made that South Africa is not making continual progress in meeting the eligibility requirements, the U.S. would have to terminate the designation of the country as a beneficiary sub-Saharan African country. The president may withdraw, suspend or limit the application of duty-free treatment with respect to articles from South Africa if he determines that it would be more effective in promoting compliance with AGOA eligibility requirements than terminating the designation of the country as a beneficiary country.

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