African Growth and Opportunity Act (AGOA)

US-Africa trade talks end in Abidjan, highlight AfCFTA

Talks between African and US officials to review the African Growth and Opportunity Act (AGOA) free-trade deal ended Thursday in Côte d’Ivoire with no major deal.

The African Growth and Opportunity Act, which in 2015 was extended to 2025, provides tariff-free access on 6,500 products from 39 countries, ranging from oil and agricultural goods to textiles, and handicrafts.

According to Constance Hamilton, assistant US trade representative for Africa, the AGOA has been the game-changer for many countries on the continent.

However, “AGOA has not led to the trade diversification for which we originally hoped,” she said in remarks at the end of the 18th edition of the AGOA forum.

According to figures compiled by the USAID, trade quadrupled in value from 2002 to 2008, a year when it reached $100 billion, but fell back in 2017 to just $39 billion.

“Petroleum products continued to account for the largest portion of AGOA imports, with a 67 percent share,” Hamilton said.

The United States is Africa’s third biggest trade partner after the European Union and China.

Deputy US Trade Representative Curtis Mahoney said Washington had drawn up a “variety of new initiatives” to “lay the groundwork for an even closer trade and investment partnership”.

“We will combine the promise of the AfCFTA with these new US initiatives and help maximize the potential of US-Africa trade,” he said.

The US and AU signed a joint statement on Monday at the AGOA Forum in Abidjan, saying they share a goal to enhance the AU’s effort to increase continental trade and investment under the African Continental Free Trade Area.

The continent-wide trade agreement aims to create the world’s largest free-trade zone. It officially came into force in May and should be fully in operation by 2030.

Note that Trump’s “America First” campaign has seen him withdraw from the Trans-Pacific Partnership, threaten to tear up the North American Free Trade Agreement and seek to renegotiate the US-South Korea free-trade deal. But his administration has said little about Africa, and had not previously mentioned the 2000 AGOA trade agreement.

US Assistant Secretary of State for African Affairs Tibor Nagy said on the eve of the forum his country favors bilateral trade agreements with African nations.

The US only has one free-trade agreement on the African continent — with Morocco — and is pursuing a trade deal with an unidentified country in sub-Saharan Africa. Nagy said that would be used as a model for others when AGOA expires.

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