Re-authorize AGOA

The African Growth and Opportunity Act (AGOA) was signed into law in May 2000 as Title 1 of The Trade and Development Act. In the 15 years since enactment, AGOA has become one of the defining characteristics of the United States’ trade and commercial relationship with Africa.  If Congress does not act, it will expire September 30, 2015.

AGOA’s strict eligibility requirements, which oblige African countries to open their economies, create strong incentives to build free markets and pursue economic growth through trade, not aid.    And it works.  Forty African countries can export nearly 6,800 products into the U.S. marketplace under the Act’s unilateral trade preference agreement. African trade with the U.S. has expanded by four folds; over 300,000 formal sector jobs have been created, and $52 billion of investment in productive enterprises is directly attributable to the trade relationship that AGOA has created between eligible countries and the U.S.  Deepening commercial relationships also benefit U.S. exporters.  U.S. exports to Africa have grown by 300 percent during the same period. 

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Economic growth in the emerging markets of sub-Saharan Africa has averaged 5.7 percent, 2 points higher than the 3.7 percent world average over the last decade. This progress leaves Africa poised for long-term investment in infrastructure, energy, agriculture, and services.  Not only does this offer the prospect of continued economic growth in the world’s poorest region, it also creates tremendous opportunities for US investors and businesses.

Waiting until the last minute to reauthorize the law does not instill the sort of confidence needed to attract private investment. That is why the business community and our African trading partners have called for a 15-year extension of AGOA. This would retain a sunset provision for the law’s enhanced trade preferences, but provide the certainty needed to spur the long-term investment Africa needs over the coming decade.  Renewing the act for a shorter period would simply undercut its effectiveness.

If America truly wants to see African countries prosper as self-reliant members of the international community, it’s time to demand Congress re-authorize AGOA and enhance its provisions to make it even more effective. 

Oladeinde is chair of the AGOA Civil Society Organization Secretariat.