PREVIEW
The summit in South Africa on the African Growth and Opportunity Act kept the arrangement going in the face of multiple policy differences
Almost a year after US President Joe Biden's Africa summit, policy-makers in Washington and Africa wanted to keep the landmark multilateral trade agreement going as economic pressures mount in the region. Its continuation keeps alive some of the policy ideas in the US-Africa summit going even if most of its ambitions on US corporate investment and multilateral development bank reforms have fallen short.
The African Growth and Opportunity Act (AGOA) scheme had been earmarked for the scrapheap by Biden's predecessor Donald Trump, who preferred to broker trade deals with a narrower group including Morocco and Kenya (AC Vol 64 No 2, Grand ambitions, little money).
Biden described the act as 'a landmark, bipartisan law that has formed a bedrock for US trade with sub-Saharan Africa for more than two decades.' Last year, the US bought US$30 bilion of raw materials and processed commodities from Africa.
AGOA was established by the US Congress in 2000 and was extended for ten years in 2015. The programme provides tariff-free access to the US market for exports of goods from 49 countries in sub-Saharan Africa. That number is likely to drop. Biden stated last week that the US would block the access of Niger, Gabon, Central African Republic and Uganda to AGOA; he pointed to military coups in the first two and human rights abuses in the others.
Extending AGOA requires Congressional approval, but it is likely to be one of the few issues that commands bipartisan support. In September, Republican Senator John Kennedy introduced a new bill in Congress, which seeks to extend AGOA until September 2045, arguing that it would help the US counter China's growing influence in the region.
'Africa is on the precipice of an unprecedented demographic boom. The timely reauthorization of AGOA is important to provide business certainty and show the United States' continued support towards Africa's economic growth,' said Michael McCaul, who chairs the House of Representatives Foreign Affairs Committee, and ranking member Gregory Meeks in a statement.
At the annual AGOA forum in Johannesburg on 2-4 November, African leaders pushed for a ten-year extension without any changes to its terms. The ten-year demand will almost certainly be met. But Biden's demand that Congress 'modernise this important Act for the economic opportunities of the coming decade' suggests that it will be partially reformed.
Biden administration officials have previously argued that African nations could make better use of AGOA's trade concessions. Some US opponents of AGOA want to see more political conditionality on the trade concessions: they point to South Africa reaping considerable benefits from the AGOA market access in the US at the same time as it maintains strong diplomatic links with Russia.
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