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Africa Economy – US-Africa Business Summit: What Future for AGOA? [1/4]

From our special correspondent in Gaborone

I’Agoa, this law was signed in 2000had until then been one of the cornerstones of the US commercial strategy of opening its market to some forty African countries. It allows eligible African countries to export certain products to the US duty-free, and the continent has benefited from this, with exports reaching 10 billion euros during 2022. For the President of Botswana, Mokgweetsi Masisi, who hosted this US/Africa summit in his capital, it is imperative that this law be extended.

We very seriously want the Biden administration to renew AGOA. A renewal now with a longer mandate would send a strong signal and bring confidence to the markets. It would also serve as a catalyst for Africa’s industrialization and inclusion in global value chains. »

Five countries benefit greatly from AGOA

But the program also has its critics. Since its inception, it has only benefited a small number of products, primarily crude oil exports. For other goods, until 2021, five countries – South Africa, Kenya, Lesotho, Madagascar and Ethiopia – accounted for more than three-quarters of exports made through this regime, thanks mainly to the already well-developed textile and automotive sectors.

Osvaldo Gómez Martínez, assistant for African affairs at the US Commerce Bureau, agrees that change is needed: AGOA has been at the heart of our US-Africa economic relationship and remains true. But the world has changed, we have all changed in 20 years. And while there are important, very dynamic conversations about the future, AGOA is not the only tool in our trade policy to improve and strengthen our US/Africa economic partnerships.. »

In addition, some African exports can already benefit from the Generalized System of Preferences without going through AGOA. The law also appears as a commercial pressure to facilitate the access of American products to the continent. And the decision, each year, whether or not to renew countries’ eligibility does not create a stable environment for investing, as the Atlantic Council laments, in a new report. The former French foreign minister, Rama Yade, is the Africa director of this think tank:

The biggest criticism, compared to Agoa, was that it could be used as a political tool. Sometimes it can be justified: last year Ethiopia was excluded from the benefits of Agoa, how do you continue to act while ignoring the thousands of deaths, rapes, war crimes? In other cases, perhaps less, that is what some Africans say. »

The emergence of bilateral partnerships and the development of the African Free Trade Area (Zlecaf) could also help transform the US program.

also readA 15th US-Africa business summit to revitalize trade with the continent

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