Trade Deficit with AGOA Countries Increases; USTR Wants More Permanent Arrangement
The Office of the U.S. Trade Representative’s most recent biennial report on the African Growth and Opportunity Act finds that U.S. exports to AGOA beneficiaries have declined while imports have seen significant growth. The report also reiterates the Trump administration’s call for AGOA beneficiaries to work toward a more permanent trade arrangement with the U.S.
According to the report, U.S. goods exports to sub-Saharan Africa countries fell 21.7 percent to $14.1 billion in 2017 and were led by machinery ($2.3 billion), vehicles ($1.6 billion), aircraft ($1.5 billion), mineral fuels ($1.4 billion), and electrical machinery ($864 million). Top U.S. export markets in the region included South Africa ($5 billion), Nigeria ($2.2 billion), Ghana ($886 million), Ethiopia ($873 million), and Angola ($810 million).
In addition, U.S. exports of commercial services to Africa as a whole dropped 2.8 percent to $13.0 billion in 2016 (latest data available). Large or emerging U.S. services export sectors include air transport, education-related travel, finance, insurance, and information and communications technology services.
U.S. investment in sub-Saharan Africa was also down, falling 23 percent from 2014 to 2016 (the latest year for which data are available) to $29 billion. The three largest destinations for U.S. investment were Mauritius ($6.7 billion), South Africa ($5.1 billion), and Nigeria ($3.8 billion). SSA foreign direct investment in the U.S. jumped 164 percent to $4.2 billion.
On the other hand, total U.S. goods imports from SSA countries rose 32.4 percent to $24.9 billion and were led by oil ($11.2 billion), precious metals ($4.1 billion), cocoa ($1.2 billion), vehicles ($1.2 billion), and iron and steel ($950 million). Top SSA suppliers to the U.S. were South Africa ($7.8 billion), Nigeria ($7.1 billion), Angola ($2.6 billion), Cote d’Ivoire ($1.2 billion), and Botswana ($772 million).
Similarly, total U.S. imports under AGOA (including the Generalized System of Preferences) were up 48.4 percent to $13.8 billion. Non-oil imports rose 4.9 percent, mainly due to increases in apparel, iron and steel, fruits and nuts, cocoa paste and powder, and footwear. The top SSA exporters to the U.S. under AGOA were Nigeria ($6.1 billion), South Africa ($2.9 billion), Angola ($2.3 billion), Chad ($590 million), and Kenya ($408 million).
The report asserts that sub-Saharan Africa has experienced robust economic growth in recent years and that most African countries are becoming more market-oriented and promoting economic integration with both neighboring countries and overseas trade partners. AGOA partners are therefore now in a stronger position to negotiate and implement reciprocal trade agreements with major developed economies such as the U.S., the report states. As a result, while USTR is encouraging beneficiaries to take full advantage of AGOA until its scheduled expiration in 2025, it is also encouraging them to consider a more stable, permanent, and mutually beneficial engagement on trade and investment with the U.S.