U.S. Trade Representative Katherine Tai expressed the United States’ intention to develop a “more useful and effective” trade programme with Africa as negotiations are currently underway to revamp a two-decade-old duty-free initiative.
The African Growth and Opportunity Act (AGOA) is set to expire in September 2025. AGOA grants qualifying countries duty-free access to the U.S. market, and discussions are primarily focused on its renewal and potential reform.
“We would like to see this programme be more than just a symbolic one. We would like for it to be more useful and effective,” Tai stated, emphasising the need for improvements.
Under AGOA, over $10 billion worth of African exports entered the United States duty-free last year. However, AGOA, launched in 2000, has faced challenges in fully realising its potential.
Despite longstanding bipartisan support from U.S. lawmakers, who consider AGOA crucial for countering China’s influence in Africa, divisions exist in Washington regarding necessary updates.
African nations are advocating for an early 10-year extension, fearing that too many changes could complicate the renewal process in Congress. They argue that improvements can be made once the programme is reauthorized.
In contrast, the Biden administration is seeking changes as part of the renewal process. Tai mentioned, “I don’t quite know how you would enhance it without doing it in the statute.”
The revised AGOA should aim to enhance its utilisation by qualifying countries, taking into account the establishment of the African Continental Free Trade Area. It should also ensure that countries can maintain benefits as they grow economically, while also encouraging greater participation by small businesses.
U.S. business associations are stressing the importance of AGOA’s reauthorization to provide certainty for African nations and to capitalise on the global shift by companies to reduce their reliance on Chinese manufacturing.
British Robinson, head of the U.S. administration’s Prosper Africa trade and business initiative, stated, “American businesses want AGOA reauthorised. Regardless of sector, they’ve made that very clear.”
Despite the ongoing discussions, businesses are hesitant to make new investments due to the uncertain status of AGOA, according to South African Trade Minister Ebrahim Patel. He explained, “An early reauthorisation will unpause those buttons.”
A recent push in the U.S. Congress supports the idea of a swift AGOA renewal. U.S. House of Representatives Foreign Affairs Committee Ranking Member Gregory W. Meeks and Chairman Michael McCaul expressed their agreement that AGOA could be improved. However, they emphasised the need for a successful and timely reauthorization as the primary consideration.
Although there is support for AGOA renewal, political gridlock in recent months has complicated efforts to pass critical legislation, raising concerns that AGOA may encounter challenges in making it onto the Congressional agenda.
