The African Growth and Opportunity Act (AGOA), which gives designated sub-Saharan African countries duty-free access to US markets for specific goods, is due to expire in 2025.
But, with just 24 months to the end of the programme, there is no clear indication whether the US Government will extend it or not. Answering questions from journalists at a virtual press briefing after this month’s US-Africa Leaders’ Summit in Washington, DC, the deputy secretary of commerce, Don Graves, said the shape of any extension of the programme will be determined by US lawmakers.
“AGOA is an act of Congress, and we in the [Joe Biden] administration are looking forward to continuing to engage with Congress in discussions as we get closer to [its] expiration … in 2025,” Graves said.
Congress signed AGOA into law in May 2000, during President Bill Clinton’s tenure. The law governs a trade programme intended to build stronger commercial ties between the United States and sub-Saharan Africa. Initially approved for 15 years, the programme was extended by ten more years, which end on 30 September 2025.
AGOA covers non-textile goods as well as textiles, setting out roughly 5,240 tariff items which are eligible to be exported to the US market, duty-free, from countries such as Ghana.
Graves disclosed that the US Commerce Department is working very closely with colleagues in the office of the US Trade Representative and on congressional committees, as well as African counterparts, to negotiate a possible extension of the programme.
“At the end of the day, we all need to come together and figure out the best mechanism for us to find ways to increase our connectivity, our trade relationships with the continent, as well as bilaterally with countries on the continent,” deputy secretary Graves said.
To benefit from AGOA, an item must be either wholly obtained (grown, fished, mined et cetera) or sufficiently manufactured in sub-Saharan Africa. Sufficiently manufactured means that all third-country materials have undergone a substantial transformation, l and at least 35% of the goods’ value is added in the beneficiary country, with up to 15% of that value attributable to US inputs. In addition, the item must be “imported directly”.
“We are very focused first on making sure that we take advantage of everything that AGOA offers, that we make sure that we create as many opportunities [as we can] for trade and investment under AGOA,” Graves added.
However, he explained that there is a need to strengthen the implementation and modernisation of AGOA to turn opportunities into tangible benefits for the African people.
On US-Ghana relations, Deputy Secretary Graves told Asaase News’ Nana Oye Ankrah, that his government will create more bilateral trade opportunities for Ghanaians.
“As a result of my trip to Ghana [in June this year], we saw a number of deals occur. And I expect that coming out of the summit, including what we did in the deal room, you’re going to see a number of new opportunities between the US and Ghana,” he said.
The US secretary of state, Antony J Blinken, announced a new trip by a Partnership Opportunity Delegation (POD) to Accra.
The delegation will be in Ghana from Monday 6 to Friday 10 February 2023 to cultivate and enable collaboration and partnership between US private sector enterprises and West Africa’s burgeoning ecosystem of climate innovators and entrepreneurs.
Nana Oye Ankrah
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