The top trade official for the African Union stated on Thursday that the continent wants the United States Congress, to extend its flagship trade program for at least ten years, and that any changes to the initiative should only be taken into consideration in the future.
AU Trade Commissioner Albert Muchanga also stated that tariff-free access to a new African free trade area will not be provided to the United States during his opening remarks at the beginning of three days of negotiations between African trade ministers and U.S. officials.
The African Growth and Opportunity Act (AGOA), which was first introduced in 2000, allows duty-free access to the United States, the largest consumer market in the world, for exports from eligible African nations. Its expiration date is September 2025, and talks about a potential renewal are presently underway.
A 10- to 20-year extension is crucial for the investing community. Anything less than that would create doubt,” Muchanga warned the ministers, who had convened in Johannesburg to agree on a shared stance over the program’s sustainability.On Friday and Saturday, U.S. officials, including U.S. Trade Representative Katherine Tai, are scheduled to meet with the African ministers.
Legislators in the United States and the Biden administration have expressed support for extending AGOA, which allowed over $10 billion in duty-free imports from Africa into the country last year.
The question of whether the initiative has to be updated is being discussed in Washington, though.
Congress should take into consideration adjustments that would “make the program more impactful,” according to Constance Hamilton, the Biden administration’s chief trade officer for Africa, who stated as much last week.Governments in Africa and a few business associations in the United States caution that tinkering with AGOA during the renewal process could cause it to take longer to be reauthorized.
“If there are any enhancements to be made, those should be done after the extension,” Muchanga stated.
The duty-free provisions of AGOA are now biased. National tariffs continue to apply to American exports to African markets. Legislators from the United States have previously proposed that the program be made more reciprocal.
The African Continental Free Trade Area (AfCFTA) is being established with the goal of uniting 1.3 billion people in an economic bloc valued at $3.4 trillion. When it is fully operationalized, it will be the biggest free trade zone created since the World Trade Organization was founded.Muchanga informed the ministers that a significant number of American legislators and officials he had met with to negotiate the extension of AGOA had believed that American goods would be allowed duty-free entry into the AfCFTA.
“I’ve told them very, very frankly that that is not possible,” he stated. “If they try to export goods from the United States of America into Africa, they are going to meet national tariffs.”
Due to violations of rights and governance, the Biden administration announced on October 30 that it planned to withdraw Gabon, Niger, Uganda, and the Central African Republic from AGOA.
