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Africa|Petroleum
Africa|Petroleum
africa|petroleum

US-Africa duty free programme has had mixed results – trade panel report

18th April 2023

By: Reuters

  

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A major US trade preference programme for Sub-Saharan Africa has been successful for developing the region's apparel sector in selected countries, but its benefits are not widespread throughout all countries and sectors, a new report to the US Congress showed on Monday.

The US International Trade Commission (USITC) said its report on the African Growth and Opportunity Act (AGOA) trade benefits shows that they have helped reduce poverty and create jobs in certain countries, particularly for women.

But over three quarters of duty-free non-petroleum exports to the United States under AGOA during 2014-2021 came from just five countries: South Africa, Kenya, Lesotho, Madagascar and Ethiopia, the report said.

The research, requested by the US House of Representatives Ways and Means Committee, will help shape debate in Congress on whether to renew or restructure AGOA, which expires on Sept. 30, 2025. The programme, an anchor for US-African trade relationship, was launched in 2000 to help develop Sub-Saharan African economies and foster democracy.

The report highlighted apparel as the biggest success story for the programme, with the industry having a positive impact on poverty reduction in major exporters Madagascar, Kenya, Lesotho, Mauritius and Ethiopia.

"AGOA benefits appear to be essential for Sub-Saharan Africa countries to maintain their apparel exports to the United States," the USITC report said, noting that loss of AGOA benefits by failing to meet eligibility criteria results in significant declines in exports to the United States.

The report also noted less success in AGOA's influence in reducing poverty for workers in other sectors including cotton farming, cocoa production, and chemicals, due to lack of development of higher value-added downstream product production.

"While certain sectors and countries have benefited from the programme, AGOA has not achieved all that we had hoped, and more work must be done to improve our economic relationships," said US Representative Richard Neal, the top Democrat on the Ways and Means Committee.

Edited by Reuters

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