Next week, some 40 African finance and trade ministers, along with a large contingent of senior U.S. government officials will descend upon the coastal city of Lomé, Togo for the annual African Growth and Opportunity Act (AGOA) Forum.
A recent example is the successful March 2017 petition for an off-cycle review by the Secondary Materials and Recycled Textiles Association (SMART) claiming that the East African Community’s recent decision to ban imports of used clothing and footwear is a violation of the AGOA eligibility criteria. Last month, the Trade Policy Staff Subcommittee of USTR held an open hearing on the matter and is currently reviewing public comment and testimony with a decision expected by the end of the year. At stake is the full or partial duty free benefits of Rwanda, Tanzania, and Uganda.
Africans are rightly concerned about the future of AGOA and its associated benefits. Some expect it will be difficult to continue justifying the one-way trade preference when AGOA expires in eight years. Discussions should be begin now on what the U.S. – Africa trade relationship will consist of in a post-AGOA world. As private industry begins making strategic and commercial decisions like future supply chains routes, it would give them some confidence to know that both sides are thinking about next steps.
The U.S. Congress, specifically the House Foreign Affairs Committee, is considering ways to improve and strengthen AGOA. Last week, Chairman Ed Royce and a group of bipartisan committee leaders introduced the AGOA and MCA Modernization Act (H.R. 3445). This legislation encourages policies that promote trade and cooperation, while providing much-needed technical assistance to help eligible partners fully utilize AGOA. Given the recent economic trends of embracing regional trade, this legislation also importantly grants the Millennium Challenge Corporation increased flexibility to support regional integration by allowing up to two simultaneous compacts with an eligible country.
With the attention and manpower that the Trump Administration is dedicating to the AGOA Forum and sustained congressional interest in promoting U.S. – Africa trade, there appears to be an understanding across the U.S. government that sub-Saharan Africa remains an important market for U.S. businesses and the global economy.
This post can also be found on CovAfrica<http://www.covafrica.com/>, the firm’s blog on legal, regulatory, political and economic developments in Africa.