Background

U.S. Trade Representative Katherine Tai recently signaled U.S. support for changes to the African Growth and Opportunity Act in line with the Biden administration’s focus on using trade policy to advance broader goals.

For more information on AGOA and how to utilize its provisions, please contact Nicole Bivens Collinson at (202) 730-4956 or via email.

In an Oct. 20 address Tai praised AGOA for increasing investment across Africa and creating “hundreds of thousands of new jobs” on the continent. She said the program has also “improved the export competitiveness of many African products, fostered regional integration, and encouraged many American companies to do business with partners on the continent” as well as “incentivized many African governments to undertake key political and economic reforms.”

However, she pointed out that “only a handful” of African countries have taken significant advantage of AGOA. For example, sub-Saharan Africa’s non-oil exports to the U.S. have grown modestly over the last 20 years but the region’s market share of U.S. non-oil imports has only increased by one-tenth of one percent.

As a result, Tai said, improvements to the program are needed, not only to attract more investment to Africa but also to support the current administration’s worker-centric trade policy. These include addressing market access for small and women-owned businesses, climate change, inequality, economic insecurity, human rights, worker rights, and the rule of law. “These are issues that American legislators will weigh as they consider the program’s reauthorization” past its current 2025 expiration, she said.

At the same time, Tai said, creating “the conditions necessary for a long-term, durable trade and investment relationship between the U.S. and Africa … cannot be achieved through AGOA alone.” However, she did not reference negotiations on a bilateral free trade agreement with Kenya, which the Trump administration had held up as a model for similar agreement with other African nations.

Instead, Tai highlighted the African Continental Free Trade Agreement, which went into effect Jan. 1, and its potential to promote African integration. She said the U.S. “typically provides about $450 million each year for trade capacity building activities across Sub-Saharan Africa” and noted that “there are new programs under development that will promote regional and continental value chains for the AfCFTA.” These include building cross-border roads and power lines, delivering workshops for African officials to assist with intellectual property negotiations, placing a technical advisor with the African Union Commission to help implement the AfCFTA’s policy framework on standards, and conducting workshops to help prepare African entrepreneurs for upcoming digital trade negotiations under the agreement.

Copyright © 2021 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.

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