Agoa needs at least 10-year extension, AU says

Africa wants the US Congress to renew its flagship trade programme for the continent for at least 10 years, the AU’s top trade official said on Thursday, adding that any modifications to the initiative should be considered only later.

Speaking at the start of three days of meetings of African trade ministers and US officials, AU trade commissioner Albert Muchanga also said the US won’t be granted tariff free access to a new African free trade area.

First launched in 2000, the African Growth and Opportunity Act (Agoa) grants exports from qualifying African countries duty free access to the US — the world’s largest consumer market. It is due to expire in September 2025, and discussions are under way for its possible renewal.

"[An extension of] 10-20 years is very critical to the investment community. Anything lower than that would generate uncertainty,” Muchanga told the ministers, who gathered in Johannesburg to formulate a common position on the future of the programme.

The African ministers are due to meet US officials, including US Trade Representative Katherine Tai, on Friday and Saturday.

US lawmakers and the Biden administration have voiced support for renewing Agoa, which saw more than $10bn worth of African exports enter the US duty free last year.

However, there is debate in Washington over whether the initiative needs updating. Constance Hamilton, the Biden administration’s top trade official for Africa, said last week that Congress should consider changes that would “make the programme more impactful”.

African governments and some US industry groups warn that attempting to modify Agoa as part of the renewal process could delay its reauthorisation.

“If there are any enhancements to be made, those should be done after the extension,” Muchanga said.

Agoa’s duty free provisions are currently one-sided. US exports to African markets remain subject to national tariffs. Some US lawmakers have in the past suggested the programme should be made more reciprocal.

Africa is setting up a new continent-wide free trade area, known as the African Continental Free Trade Area (AfCFTA), that aims to bring together 1.3-billion people in a $3.4-trillion economic bloc. Once fully implemented it will be the largest free trade area since the establishment of the World Trade Organisation.

Muchanga told the ministers that many of the US officials and lawmakers he had met to discuss Agoa’s renewal had assumed US exports would be granted duty free entrance to the AfCFTA.

“I’ve told them very, very frankly that is not possible,” he said. “If they try to export goods from the US into Africa, they are going to meet national tariffs.”

The Biden administration said on October 30 it intended to end the participation of Gabon, Niger, Uganda and the Central African Republic in Agoa because of governance and rights failings.

Reuters