U.S. Trade and Investment Relations with
sub-Saharan Africa and the African Growth
and Opportunity Act

Vivian C. Jones
Specialist in International Trade and Finance
Brock R. Williams
Analyst in International Trade and Finance
June 26, 2012
Congressional Research Service
7-5700
www.crs.gov
RL31772
CRS Report for Congress
Pr
epared for Members and Committees of Congress

U.S. Trade and Investment Relations with sub-Saharan Africa

Summary
Following the end of the apartheid era in South Africa in the early 1990s, the United States sought
to increase economic relations with sub-Saharan Africa (SSA). President Clinton instituted
several measures that dealt with investment, debt relief, and trade. Congress passed legislation
that required the President to develop a trade and development policy for Africa.
Between 1960 and 1973, Africa’s economic growth was relatively strong, followed by a period of
stagnation and decline for the subsequent two decades in many SSA countries. Current
perspectives, however, indicate that many of the fastest-growing countries in the world are on the
African continent, and the International Monetary Fund (IMF) projects that the SSA region will
grow in terms of real GDP by 5.4% in 2012 and 5.3% in 2013.
In 2000, Congress approved new U.S. trade and investment legislation for SSA in the African
Growth and Opportunity Act (AGOA; Title I, P.L. 106-200). According to U.S. trade statistics,
U.S. trade with SSA has comprised 1% to 2% of U.S. total trade with the world. AGOA extends
preferential treatment to U.S. imports from eligible countries that are pursuing market reform
measures. Data show that U.S. imports under AGOA are mostly energy products, but imports of
other products have grown significantly. AGOA mandated that U.S. officials meet regularly with
their counterparts in sub-Saharan Africa, and 11 of these meetings have been held to date. The
11th AGOA Forum was held from June 14 to June 15, 2012, in Washington, DC.
AGOA also directed the President to provide U.S. government technical assistance and trade
capacity support to AGOA beneficiary countries. Government agencies that have roles in this
effort include the U.S. Agency for International Development, the Assistant U.S. Trade
Representative for Africa (established by statute under AGOA), the Overseas Private Investment
Corporation, the Export-Import Bank, the U.S. and Foreign Commercial Service, and the Trade
and Development Agency. In AGOA, Congress declared that free-trade agreements should be
negotiated, where feasible, with interested sub-Saharan African countries. Related to this
provision, negotiations on a free-trade agreement with the Southern African Customs Union
(SACU), which includes South Africa and four other countries, began in June 2003, but were
suspended in April 2006.
Several topics may be important to the 112th Congress in the oversight of AGOA and in potential
legislation amending the act. First, an AGOA provision allowing apparel made in lesser-
developed countries to be made of yarns and fabrics from any country, subject to a cap, expires
on September 30, 2012. H.R. 2493 and its companion bill in the Senate, S. 2007, seek to extend
the third-country fabric provision until 2015, and to include the Republic of South Sudan (which
became independent from Sudan in July 2011) in the list of countries included in the definition of
sub-Saharan Africa in the act. Second, H.R. 4221 and S. 2215 seek to increase U.S. exports to
Africa, in part, through strategies aimed at developing relationships between the United States
and African countries on a government-to-government level, as well as fostering private sector
U.S.-African ties. Third, H.R. 656 would create at the State Department a Special Representative
for United States-Africa Trade, Development, and Diaspora Affairs that would also promote U.S.
trade and investment with Africa.

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U.S. Trade and Investment Relations with sub-Saharan Africa

Contents
Introduction...................................................................................................................................... 1
Perspectives on the sub-Saharan African Economy......................................................................... 2
Historical Perspectives .............................................................................................................. 2
Current Perspectives.................................................................................................................. 3
Investment and Growth Challenges........................................................................................... 4
HIV/AIDS and Other Health Challenges ............................................................................ 5
Foreign Debt Burden........................................................................................................... 6
U.S.-Africa Trade and Investment Trends ....................................................................................... 7
U.S. Trade with sub-Saharan Africa .......................................................................................... 7
U.S. Investment in sub-Saharan Africa ................................................................................... 13
AGOA Legislation and Issues in the 112th Congress..................................................................... 16
Third-Country Fabric Provision Expiration ............................................................................ 16
Africa-Related Trade Legislation in the 112th Congress.......................................................... 18
AGOA Legislation and Amendments ............................................................................................ 18
Beneficiary Countries.............................................................................................................. 18
Benefits.................................................................................................................................... 19
Textile and Apparel Provisions.......................................................................................... 20
AGOA Non-Textile Rules of Origin ................................................................................. 21
Amendments to AGOA ........................................................................................................... 22
Trade Act of 2002.............................................................................................................. 22
AGOA Acceleration Act of 2004....................................................................................... 22
Miscellaneous Trade and Technical Corrections Act of 2004 ........................................... 23
Africa Investment Incentive Act of 2006 .......................................................................... 23
AGOA Trade Trends ...................................................................................................................... 24
AGOA Technical Assistance and Capacity Building..................................................................... 27
United States-sub-Saharan Africa Trade and Economic Cooperation Forum ......................... 28
U.S. Agency for International Development (USAID) ........................................................... 29
Assistant U.S. Trade Representative for Africa (AUSTRA) ................................................... 30
Overseas Private Investment Corporation (OPIC) .................................................................. 30
Export-Import Bank (Ex-Im Bank) ......................................................................................... 30
U.S. and Foreign Commercial Service (CS)............................................................................ 31
U.S. Trade and Development Agency (TDA).......................................................................... 32
Multilateral Initiatives ............................................................................................................. 32
Regional Cooperation and Free Trade Agreements ....................................................................... 33
FTA Negotiations with SACU................................................................................................. 33
U.S. Trade and Investment Framework Agreements (TIFAs) ................................................. 34
U.S. Bilateral Investment Treaties (BIT)................................................................................. 34
AGOA: Current and Future Challenges......................................................................................... 35

Figures
Figure 1. African Countries and AGOA Eligibility Status, 2012..................................................... 2
Figure 2. U.S. Imports from sub-Saharan Africa by Country, 2011 ................................................ 9
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Figure 3. U.S. Exports to sub-Saharan Africa by Country, 2011................................................... 10
Figure 4. U.S. Imports from sub-Saharan Africa by Product Category, 2011 ............................... 12
Figure 5. U.S. Exports to sub-Saharan Africa by Product Category, 2011 .................................... 13
Figure 6. Stock of U.S. FDI Abroad, by Destination..................................................................... 15
Figure 7. Stock of U.S. FDI in Africa by Industry Sector, 2010.................................................... 15
Figure 8. U.S. Exports to AGOA-Eligible Countries as a Portion of Total U.S. Exports to
sub-Saharan Africa ..................................................................................................................... 26

Tables
Table 1. Real GDP Growth in sub-Saharan Africa .......................................................................... 4
Table 2. SSA Countries with Highest Estimated Adult (15-49) HIV Prevalence Rate
(Percentage), 2009 ........................................................................................................................ 6
Table 3. SSA Government Debt....................................................................................................... 7
Table 4. U.S. Goods Trade with SSA Countries .............................................................................. 8
Table 5. Top Ten U.S. Imports from sub-Saharan Africa, 2010 and 2011 ..................................... 10
Table 6. Top Ten U.S. Exports to sub-Saharan Africa ................................................................... 12
Table 7. Major Destinations of U.S. Foreign Direct Investment (FDI) in SSA, 2010................... 14
Table 8. U.S. imports from Lesser Developed AGOA Countries under the Third-Country
Fabric Provision.......................................................................................................................... 16
Table 9. Top Ten Apparel Exporters under AGOA ........................................................................ 17
Table 10. Beneficiary Countries under the African Growth and Opportunity Act......................... 19
Table 11. Total U.S. Imports, Imports under AGOA (including GSP), and Utilization Rate
of Preference, 2011..................................................................................................................... 24
Table 12. Top Ten U.S. Imports under AGOA (Excluding GSP)................................................... 25
Table 13. U.S. Exports to AGOA Countries, 2011......................................................................... 27
Table B-1. SSA Countries Trade Relationship with United States and Preference Program
Status .......................................................................................................................................... 40

Appendixes
Appendix A. Regional Economic Integration Among sub-Saharan Africa Nations ...................... 38
Appendix B. U.S.–SSA Trade Relationship .................................................................................. 40

Contacts
Author Contact Information........................................................................................................... 41

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Introduction
A key element in U.S. policy toward Africa is the potential benefit from increased trade and
commercial ties between the United States and Africa.1 Interest in increasing bilateral commerce
began after the end of the apartheid era in South Africa in the early 1990s. In 1993, Congress
approved the end of anti-apartheid restrictions, and later that year then-Commerce Secretary Ron
Brown led a business delegation to South Africa. In subsequent years, the Administration has also
instituted several measures to help sub-Saharan African (SSA) countries and increase U.S. trade
and investment in the region.
At the same time, Congress developed legislation that sought to improve U.S.-Africa trade
relations. In the 1994 legislation to implement the Uruguay Round of multilateral trade
agreements (P.L. 103-465), Congress directed the President to develop and implement a
comprehensive trade and development policy for the countries of Africa, and subsequently
introduced legislation to authorize a new trade and investment policy for sub-Saharan Africa. In
2000, Congress approved the African Growth and Opportunity Act (AGOA; Title I, P.L. 106-
200). AGOA offers trade preferences and other economic benefits to SSA countries that meet
certain criteria, including progress towards a market economy, respect for the rule of law, and
human and worker rights. In AGOA, Congress also declared that free-trade agreements should
also be negotiated, where feasible, with interested SSA countries.
AGOA has been amended several times since its initial enactment. In 2002, the Congress
amended AGOA to further increase market access for products from SSA.2 In 2004 Congress
passed legislation further amending AGOA, extending its benefits beyond the original deadline
and clarifying certain provisions. This legislation also included directives to the President on
investment initiatives and technical assistance. Congress passed legislation in 2006 that further
amended AGOA and extended certain provisions concerning textile and apparel imports to 2012.3
One of these provisions, which permits imports of apparel made in designated lesser-developed
SSA countries of third-country yarns and fabrics (meaning that the yarns and fabrics may come
from any country), subject to a cap, expires on September 30, 2012.
This report examines African economic trends and U.S. trade and investment flows with SSA. It
discusses the provisions of AGOA and the changes that have occurred since its enactment. It
concludes with a brief discussion of issues for Congress.



1 The White House, U.S. Strategy Toward Sub-Saharan Africa, June 2012, p. 4,
http://www.whitehouse.gov/sites/default/files/docs/africa_strategy_2.pdf.
2 Section 3108 of the Trade Act of 2002, P.L. 107-210.
3 Section 6002 of the Tax Relief and Health Care Act of 2006, P.L. 109-432.
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Figure 1. African Countries and AGOA Eligibility Status, 2012

Source: Adapted by CRS (6/21/2012).
Perspectives on the sub-Saharan African Economy
Historical Perspectives
The historical pattern of contemporary Africa’s economic growth provides insights to help
understand Africa’s current economic situation and policy options. Between 1960 and 1973,
which is the period immediately following independence in most African countries, economic
growth was reasonably strong in many SSA countries. Most African countries experienced a
sharp decline in their growth trends at some point between 1973 and 1980, followed by persistent
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stagnation until the early 1990s. Average SSA per-capita GDP (PPP data) reached its minimum
point in the mid-1990s, and still had not recovered to 1970s levels in 2005.4 Another factor that
characterized growth in many African countries—and in many cases continues to affect economic
development patterns—is high economic growth volatility, a common feature in SSA countries’
historical trends. A 2007 World Bank study found that SSA has experienced more growth
volatility than other regions, resulting in dampened investments and obscuring periods of good
performance for some countries. The report found that this volatility has been caused by conflict,
poor governance, and fluctuating world commodity prices. The authors of the study contend that
reducing volatility is at least as important as promoting growth.5 In the 1990s, many African
countries made a modest recovery until about 1994, but the growth rates for the remainder of the
period tended to remain far below the first post-colonial phase.6
The causes of this period of slow economic growth in the region have been a source of debate
among development economists. Analysts have cited poor governance, political instability,
geographic features, and historical conditions such as colonialism as different reasons for Africa’s
economic malaise. Other factors cited included slow accumulation of both human and physical
capital, dependence on single commodity exports, low productivity growth and pressures from
high population growth rates, and high dependence on foreign aid.
Following this period of stagnation, the past decade has seen considerable improvements in
governance and economic growth in many parts of Africa, although many countries continue to
experience political instability, poor economic performance, and lack of progress in improving
social welfare indicators. Poverty and inequitable income distribution also remain common in
many countries. Despite these challenges, many countries are experiencing rapid economic
growth.
Current Perspectives
The International Monetary Fund (IMF) projects that the SSA region will grow in terms of real
GDP by 5.4% in 2012 and 5.3% in 2013 (see Table 1).7 These projections, however, mask
significant disparities among the 44 countries the IMF considers in its regional analysis. For
example, in its Regional Economic Outlook, released in April 2012, the IMF projected that oil-
exporting countries in SSA would experience average real GDP growth of 7.1% in 2012 and 6.1%
in 2013. Relatively stable, low-income, non-energy-producing countries (such as Ethiopia,
Burkina Faso, and Kenya) are expected to grow on average by 5.9% each year, while middle
income countries (such as South Africa) are projected to grow by 3.4% in 2012 and 4.0% in 2013.
The IMF also projects that 8 of the 12 SSA countries identified as “fragile” countries, due to
prolonged institutional weakness or conflict (such as the Democratic Republic of Congo, Guinea,
and Liberia), are expected to see stronger growth in 2012 (6.6% on average) and 2013 (5.8%).8

4 Jorge Saba Arbache and John Page, “Patterns of Long Term Growth in Sub-Saharan Africa,” World Bank, November
2007. Purchasing Power Parity (PPP) estimates attempt to determine comparative prices across countries for similar
baskets of goods, taking into account exchange rates and various cost of living measures. This generates an artificial,
but uniform, global exchange rate, which can be used to measure the local purchasing value of national currencies.
5 Jorge Saba Arbache and John Page, “More Growth or Fewer Collapses? A New Look at Long Run Growth in SSA,”
World Bank, October 2007.
6The Economist, May 13-19, 2000.
7 Ibid, p. 95.
8 International Monetary Fund Regional Economic Outlook: Sub-Saharan Africa, April 2012, http://www.imf.org.
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This improved economic performance may reflect many factors, including better governance,
increased trade flows, strong commodity prices, rising aid flows, and debt forgiveness.9 Rising
incomes and expanding urban middle classes in some countries, economic diversification,
increased access to communications technologies, and multiple other factors could also contribute
to such trends.
U.S. foreign direct investment (FDI) flows in the region in 2010 amounted to about $3.2 billion,
with Mauritius ($2.0 billion), South Africa ($715 million), Gabon ($267 million), Nigeria ($193
million), and Liberia ($80 million) as the major destinations of those investment flows.10
According to IMF data, total world FDI to SSA amounted to about $39 billion in 2010, $41
billion in 2011 (estimate), and is projected to be $41 billion in 2012.11 Leading SSA country
destinations for worldwide direct investment in 2010 included Angola ($12.6 billion), Nigeria
($6.8 billion), and South Africa ($5.9 billion).12
Table 1. Real GDP Growth in sub-Saharan Africa
(percent change)
Country
2004-2008
2012
2013
Group
(average)
2009 2010
2011 (projected)
(projected)
Oil
Exporters 8.6 5.2 6.6 6.0 7.1
6.1
Middle Income
5.0
-0.6
3.8
4.3
3.4
4.0
Low
Income 7.3 5.5 6.3 5.8 5.9
5.9
Fragile
3.1 2.9 3.8 1.7 6.6
5.8
Total SSA
6.5
2.8
5.3
5.1
5.4
5.3
World
4.6
-0.6
5.3
3.9
3.5
4.1
Source: International Monetary Fund, Regional Economic Outlook, sub-Saharan Africa, April 2012.
Notes: IMF Country Groupings: Oil Exporting Countries: Angola, Cameroon, Chad, Equatorial Guinea,
Gabon, Nigeria, Republic of Congo. Middle Income Countries: Botswana, Cape Verde, Ghana, Lesotho,
Mauritius, Namibia, Senegal, Seychelles, South Africa, Swaziland, Zambia. Non-Fragile Low Income
Countries:
Benin, Burkina Faso, Ethiopia, the Gambia, Kenya, Madagascar, Mali, Mozambique, Niger, Rwanda,
Sierra Leone, Tanzania, Uganda. Fragile Countries: Burundi, Central African Republic, Comoros, Democratic
Republic of the Congo, Cote d’Ivoire, Eritrea, Guinea, Guinea-Bissau, Liberia, Sao Tome and Principe, Toga,
Zimbabwe.
Investment and Growth Challenges
Despite improved economic performance in many African countries in recent years, the economic
challenges facing Africa remain significant. African countries are vulnerable to volatile weather
conditions, commodity price fluctuations, poor road and other infrastructure conditions, as well as
ongoing political instability in parts of the continent. Many countries have also faced difficulties

9 The World Bank, Global Development Finance, 2006 and 2007.
10 Organization for Economic Cooperation and Development Foreign Direct Investment Database, 2010 figures (latest
available).
11 International Monetary Fund data from Economist Intelligence Unit (EIU) Market Indicators and Forecasts Database.
Inward direct investment flows are defined as net flows of direct investment capital by non-residents into the region.
12 Ibid.
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in reducing high rates of poverty, improving social welfare indicators, combating corruption, and
diversifying their economies. In addition, limited integration of regional trade regimes and
transport systems often inhibits intra-regional trade, as well as foreign investment. Many
countries’ domestic market demand is not large enough to draw the attention of large foreign and
U.S. firms, which may prefer to deal with larger regional markets.13
Much of sub-Saharan Africa’s trade with the world is largely still largely based on primary
product exports, such as oil and other mineral fuels (about 54% of its exports to the world by
value in 2010); precious stones and metals (10%); and ores, slag, and ash (5%).14 As a result,
many sub-Saharan African countries continue to be vulnerable—as do many developing countries
and regions—to the rise and fall of international commodity prices.
HIV/AIDS and Other Health Challenges
The HIV/AIDS pandemic is also straining some African economies and threatens to curtail future
economic growth. SSA is the region most affected by HIV/AIDS. As of 2010, an estimated 22.9
million people were living with HIV-AIDS in SSA, accounting for 68% of all people living with
HIV worldwide. Nine countries with the world's highest HIV prevalence rates worldwide are
located in Southern Africa, where an estimated 11.1 million people were living with HIV in 2010.
Swaziland has the world's highest prevalence rate (25.9%), and South Africa has the world’s
largest HIV-positive population (5.6 million).15 In 2010, about 1.9 million people in SSA
contracted HIV and approximately 1.2 million people in the region died from AIDS.16 The
pandemic not only diverts resources from investments in productive resources to social services
to care for the sick and dying, but it also erodes human capital by striking some of the most
productive members of society: skilled workers, teachers, and professionals.17
Africa also suffers disproportionately high disease burdens attributable to such illnesses as
malaria, tuberculosis and other respiratory diseases, and water-born diarrheal infections, and
many countries face severe health care delivery system constraints.18


13 Based on remarks of representatives from the Chamber of Commerce and GE Africa speaking on U.S. economic
engagement in Africa, June 19, 2012.
14 CRS analysis using the Global Trade Atlas Navigator database.
15 UNAIDS, Report on the Global AIDS Epidemic, 2010, CRS Report R41645, U.S. Response to the Global Threat of
HIV/AIDS: Basic Facts
, by Alexandra E. Kendall.
16 Ibid.
17 CRS Report RL33584, AIDS in Africa, by Nicolas Cook.
18 See CRS Report R41644, U.S. Response to the Global Threat of Malaria: Basic Facts, by Alexandra E. Kendall;
CRS Report R41802, The Global Challenge of HIV/AIDS, Tuberculosis, and Malaria, by Alexandra E. Kendall; and
CRS Report R41851, U.S. Global Health Assistance: Background and Issues for the 112th Congress, by Tiaji Salaam-
Blyther and Alexandra E. Kendall.
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Table 2. SSA Countries with Highest Estimated Adult (15-49) HIV Prevalence Rate
(Percentage), 2009
Country Estimate
(%)
Swaziland
25.9
Botswana
24.8
Lesotho
23.6
South Africa
17.8
Zimbabwe
14.3
Zambia
13.5
Namibia
13.1
Mozambique
11.5
Malawi
11.0
Kenya
6.3
SSA Average
5.9
Source: UNAIDS Report on the Global AIDS Epidemic, 2010
Foreign Debt Burden
The debt burden carried by SSA countries has been identified as a drag on the economies of the
region. In 2010, the states of SSA owed foreign creditors an estimated total of $140 billion.19
SSA’s total debt as a percentage of GDP averaged 33.1% in 2011 (see Table 3).20 Declines in
some SSA countries’ external debt are due to ongoing comprehensive debt relief initiatives begun
in 1996 including the Heavily Indebted Poor Countries Initiative (HIPC), the Multilateral Debt
Relief Initiative (MDRI), and the Paris Club agreement with Nigeria.21


19 World Bank Global Development Finance data, http://data.worldbank.org. Foreign debt is defined as total external
debt stock, comprising public and publicly guaranteed long-term debt.
20 International Monetary Fund, Regional Economic Outlook: Sub-Saharan Africa, April 2012, http://www.imf.org
21 United States Trade Representative, 2008 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-
Saharan Africa and Implementation of the African Growth and Opportunity Act
, May 2008. See also CRS Report
RS22534, The Multilateral Debt Relief Initiative, by Martin A. Weiss.
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Table 3. SSA Government Debt
(as percent of GDP)
Country
2004 – 2008
2009 2010 2011
Grouping
(average)
Oil
Exporters
29.2 21.7 22.6 20.8
Middle
Income
32.7 31.7 35.1 37.9
Low
Income
52.0 35.9 38.1 39.1
Fragile 112.4 88.2 56.4 57.4
Total
SSA 38.8 32.5 32.6 33.1
Source: International Monetary Fund, Regional Economic Outlook, sub-Saharan Africa, April 2012.
Notes: IMF Country Groupings: Oil Exporting Countries: Angola, Cameroon, Chad, Equatorial Guinea,
Gabon, Nigeria, Republic of Congo. Middle Income Countries: Botswana, Cape Verde, Ghana, Lesotho,
Mauritius, Namibia, Senegal, Seychelles, South Africa, Swaziland, Zambia. Non-Fragile Low Income
Countries:
Benin, Burkina Faso, Ethiopia, the Gambia, Kenya, Madagascar, Mali, Mozambique, Niger, Rwanda,
Sierra Leone, Tanzania, Uganda. Fragile Countries: Burundi, Central African Republic, Comoros, Democratic
Republic of the Congo, Cote d’Ivoire, Eritrea, Guinea, Guinea-Bissau, Liberia, Sao Tome and Principe, Toga,
Zimbabwe.
U.S.-Africa Trade and Investment Trends
U.S. Trade with sub-Saharan Africa
U.S. imports from SSA countries fell in 2008 and 2009, possibly due to the spillover effects of the
global financial crisis and falling demand.22 According to the IMF, however, the SSA region is
currently showing solid macroeconomic performance, and economic activity had expanded
strongly in 2010 through 2012 to date.23 This is illustrated, in part, by an expansion in total U.S.
trade (imports plus exports) with SSA countries in 2010 and 2011, which grew by 29.5% and
17% respectively, after a decrease in total trade by 40% in the 2008-2009 time frame (see Table
4
), as well as a continuing large increase in trade with China.

22 CRS Report R40778, The Global Economic Crisis: Impact on Sub-Saharan Africa and Global Policy Responses, by
Alexis Arieff, Martin A. Weiss, and Vivian C. Jones.
23 International Monetary Fund, Regional Economic Outlook, April 2012, http://www.imf.org.
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Comparing Chinese and U.S. Trade with Africa24
The value of total trade between China and Africa stood at $8.9 billion in the year 2000. In 2009, Chinese-African
trade, totaling $70.4 billion, surpassed that of U.S.-Africa trade ($62 billion), and reached $127.3 billion in 2011, an
increase of 1,423% over the 2000 level.25 Africa’s share of global Chinese trade also grew over the past decade, from
1.9% of Chinese global trade in 2000 to 3.5% of China’s global trade in 2011. China is also Africa’s largest single
source of imports, while the United States is its largest export destination. In 2011, about 62% of African exports to
China consisted of crude oil (over $24.77 billion of which came from Angola, the source of over 9% of China’s oil
imports in 2011). Another 34% was made up of raw materials, mostly metal commodities and wood. Oil also
dominates Africa’s exports to the United States; crude oil made up about 75% of U.S. imports from Africa in 2011.
Both China and the United States export a highly diverse, variable array of products to Africa, notably equipment,
machinery, vehicles, and other technology. U.S.-African trade has also grown over the past decade, but not as rapidly
as Sino-African trade.26

Table 4. U.S. Goods Trade with SSA Countries
(in $ billions)
Percentage
Change 2010
Trade Flow
2008
2009
2010
2011
and 2011 (%)
Total U.S.
18.0
14.6 16.4 20.3 24%
Exports
Total U.S.
86.1
47.9 64.4 74.0 15%
Imports
Total Trade
104.1
62.4 80.8 94.3 17%
(Imports +
Exports)
Imports under
65.1
33.5 43.9 53.8 23%
AGOA (includes
GSP)

Source: U.S. International Trade Commission Trade Dataweb, http://dataweb.usitc.gov.
Notes: Domestic Exports, FAS value; Imports for Consumption, Customs Value. Total Imports under AGOA is
a subset of total U.S. imports from SSA countries.
The United States conducts a small share of its total trade with SSA countries. In 2011, the United
States imported $74 billion from SSA countries, or about 3.4% of total U.S. global imports of
$2.2 trillion. The United States exported $20.3 billion to the region in 2011, or 1.5% of total U.S.
exports of $1.3 trillion. Nevertheless, total trade (exports plus imports) between the United States
and sub-Saharan Africa grew 51% between 2009 and 2011, up from $62.4 billion in 2009 to
$94.3 billion in 2011 (see Table 4). Certain external factors, including increases in oil and other
prices for natural resources, may also account, in part, for the dramatic growth (by value) in U.S.-
SSA trade.

24 Contribution from Nicolas Cook, CRS African Affairs Specialist.
25 Sino-African trade in 2011 also eclipsed the record $104.7 billion in U.S.-African trade attained in 2008.
26 U.S.-African trade also stood at $29.4 billion in the year 2000 and $94.3 billion in 2011, having increased 221%. In
the year 2000, trade with Africa made up 1.5% of total U.S global trade, and Africa’s share had grown to 2.6% by
2011. U.S.-Africa trade peaked in 2008 at $104.7 billion.
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A significant portion of U.S. trade with sub-Saharan Africa is with a small number of countries.
About 79% of U.S. imports from the region were from three SSA countries in 2011: Nigeria
(47%), Angola (19%), and South Africa (13%). Exports were similarly concentrated, with three
countries receiving 68%: South Africa (34%), Nigeria (22%), and Angola (12%). All other
countries accounted for less than 6% each of U.S. imports from the region (see Figure 3).
Figure 2. U.S. Imports from sub-Saharan Africa by Country, 2011
All other
Congo (ROC)
Chad
Gabon
Nigeria
South Africa
Angola

Source: U.S. International Trade Commission Trade Dataweb, http://www.usitc.gov.
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Figure 3. U.S. Exports to sub-Saharan Africa by Country, 2011
All other
Tanzania
Senegal
South Africa
Eq Guinea
Mozambique
Kenya
Benin
Ethiopia
Ghana
Angola
Nigeria

Source: U.S. International Trade Commission Trade Dataweb, http://dataweb.usitc.gov.
Natural resources continue to dominate U.S. imports from SSA. The leading U.S. imports from
SSA in 2011 were mineral fuels and mineral oils ($58.97 billion, see Table 5). Nigeria was the
greatest source of U.S. oil imports and was the fifth-largest global supplier (by value) of U.S. oil
imports (of a total of $454 billion worldwide).27 In 2011, Nigeria supplied 56% of U.S. petroleum
imports from SSA, which accounted for about 7.4% of global U.S. oil imports. Angola supplied
another 23% of U.S. petroleum from the region, Chad supplied 5%, and Congo (ROC) supplied
4%.28
Table 5. Top Ten U.S. Imports from sub-Saharan Africa, 2010 and 2011
(in $ billions)
Percent Change
HTS Number
2010
2011
2010-2011
27-Mineral fuels and oil
51.38
58.97
14.80%
71-Pearls, Precious Stones, Precious Metals, etc., Coin
3.95
4.33
9.80%
87-Vehicles, Except Railway Or Tramway, And Parts
1.61
2.16
34.10%
18-Cocoa and cocoa preparations
1.04
1.27
22.60%

27 Harmonized Tariff Schedule Chapter 27, Mineral Fuels, Mineral Oils and Products of their Distillation; Bituminous
Substances; Mineral Waxes. The top five oil suppliers to the United States in 2011 were Canada ($101.9 billion), Saudi
Arabia ($46.2 billion), Mexico ($44 billion), Venezuela ($42 billion), and Nigeria ($34 billion) according to U.S. trade
statistics (U.S. imports for consumption using the Global Trade Atlas).
28 CRS calculations based on trade statistics (U.S. imports for consumption) from the U.S. International Trade
Commission Trade Dataweb (http://dataweb.usitc.gov) and the Global Trade Atlas trade database.
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Percent Change
HTS Number
2010
2011
2010-2011
29-Organic chemicals
1.22
1.16
-4.70%
72-Iron and steel
0.76
0.89
16.70%
26-Ores, slag, and ash
0.67
0.79
17.70%
62-Articles of apparel and clothing accessories, not
0.40 0.46
14.70%
knitted or crocheted
84-Nuclear Reactors, Boilers, Machinery and Parts
0.36
0.46
26.30%
61-Articles of apparel and clothing accessories, knitted
0.39 0.44
14.30%
or crocheted
Subtotal
61.77
70.94
14.80%
Al Other
2.58
3.08
19.40%
Total 64.35
74.02
15.00%
Source: U.S. International Trade Commission Trade Dataweb, http://www.usitc.gov.
Note: U.S. Imports for Consumption.
Precious stones and metals were another major U.S. import from SSA in 2011.29 South Africa led
this category (imports included platinum, diamonds, other semi-precious stones, and coins) with
about $4.2 billion in U.S. imports; followed by Botswana, Angola, and Namibia—all diamond
producers—at about $275 million, $169 million, and $100 million, respectively (see Table 5 and
Figure 4).30
Although natural resources are the major category of U.S. imports from SSA countries, there have
also been marked increases in imports of other products, including textiles and apparel, vehicle
parts and transportation equipment, and agricultural products. A 2009 report by the U.S.
International Trade Commission (USITC) indicated that certain SSA countries have the potential
to competitively produce certain textile and apparel inputs. Since cotton is the primary fiber
currently used in the production of yarn and fabric in SSA countries, and is grown in large
quantities in the region, the USITC found that cotton products seem to have the most competitive
potential. The report also stated that certain niche apparel products manufactured in small
quantities could also be successful in the U.S. market, including organic cotton products; yarn
and knit fabric of modal and other specialty manmade fibers; hand-loomed fabric of cotton and
silk for home furnishings and apparel; African print fabrics; and zippers and ornamental trim
products.31

29 Harmonized Tariff Schedule Chapter 71, Natural or Cultured Pearls, Precious or Semi-Precious Stones, Precious
Metals; Precious Metal Clad Metals, Articles Thereof; Imitation Jewelry; Coin.
30 CRS calculations based on trade statistics from the U.S. International Trade Commission Trade Dataweb
(http://dataweb.usitc.gov).
31 U.S. International Trade Commission, Sub-Saharan African Textile and Apparel Inputs: Potential for Competitive
Production
, Investigation No. 332-502, May 2009.
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Figure 4. U.S. Imports from sub-Saharan Africa by Product Category, 2011
Apparel,
Ores, Slag, and
not knitted Machinery
Ash
Iron and Steel
Apparel, knitted
Organic
All other
Chemicals
Cocoa
Vehicles and
Parts
Precious Stones
and Metals
Mineral Fuels

Source: U.S. International Trade Commission Trade Dataweb, http://www.usitc.gov.
U.S. exports to sub-Saharan Africa were more diverse. Machinery and parts was the leading
export sector in 2011 (22% of U.S. exports to the region), followed by transportation equipment
(17%), cereals (8%), mineral fuels (8%), aircraft and parts (7%), and electrical machinery (6%)
(see Figure 5).
Table 6. Top Ten U.S. Exports to sub-Saharan Africa
(in $ billions)
Percent
HTS Number
2010
2011
Change
84-Nuclear Reactors, Boilers, Machinery and Parts
3.43
3.93
14.30%
87-Vehicles, Except Railway Or Tramway, And Parts
2.40
3.45
43.60%
27-Mineral Fuels and Oil
1.41
1.84
30.30%
10-Cereals 1.36
1.79
31.60%
88-Aircraft, Spacecraft, and Parts
1.11
1.51
35.70%
85-Electric Machinery; Sound and TV Equipment and Parts
0.81
0.75
-7.70%
98-Special Classification Provisions
0.60
0.72
18.50%
71-Pearls, Precious Stones, Precious Metals, etc., Coin
0.42
0.62
44.90%
90-Optical, Photography, Medical or Surgical Instruments
0.60
0.58
-3.50%
39-Plastics and Articles Thereof
0.47
0.56
20.40%
Subtotal
12.63
15.73
24.60%
Al Other
3.81
4.57
19.80%
Total 16.44
20.30
23.50%
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Source: U.S. International Trade Commission Trade Dataweb, http://www.usitc.gov
Figure 5. U.S. Exports to sub-Saharan Africa by Product Category, 2011
Machinery
All other
Plastics
Optical/Surgical
Instruments
Vehicles and parts
Precious Stones
and Metals
Special Provisions
Electrical
Mineral Fuels
Machinery
Cereals
Aircraft and parts

Source: U.S. International Trade Commission Trade Dataweb, http://www.usitc.gov.
U.S. Investment in sub-Saharan Africa
U.S. foreign direct investment (FDI) in Africa is characterized by the following three key
characteristics:
• SSA countries are a relatively minor destination of U.S. FDI. Africa, as a whole,
hosts about 1% of total U.S. FDI (see Figure 6).32
• U.S. FDI in Africa is largely concentrated in mining and extractive industries,
which together comprise some $29 billion of the $54 billion total stock of U.S.
FDI in Africa (see Figure 7).33
• U.S. FDI in African manufacturing industries is mostly directed toward South
Africa, which receives about 67% of total U.S. FDI in Africa’s manufacturing
sector.34
In 2010, the latest year for which annual investment data are available, outflows of U.S. FDI
abroad to SSA ($3.4 billion) were nearly 10 times greater than inflows of SSA FDI in the United
States ($ 410 million).35 The three countries in SSA with the largest stock of U.S. FDI in 2010

32 Data from the Bureau of Economic Analysis (BEA). Analysis by CRS. BEA industry-specific data were not provided
in sufficient detail to break out SSA countries from Africa as a whole.
33 Ibid.
34 Ibid.
35 This largely one-sided flow of investment is not surprising given the great disparity in the level of economic activity
(continued...)
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were Mauritius, South Africa, and Nigeria (stock column, Table 7). This stock of FDI represents
an accumulation over time. In terms of one-year flows for 2010, the top recipients were
Mauritius, South Africa, and Gabon (see flow column).
Table 7. Major Destinations of U.S. Foreign Direct Investment (FDI) in SSA, 2010
$ millions
Leading
Flow Stock
Countries
Mauritius 1,979
7,210
South Africa
715
6,503
Nigeria 193
5,224
Equatorial Guinea
20
3,630
Liberia 80
918
Gabon 267
678
Kenya 6
263
Zambia 22
140
Republic of Congo
NA
129
Source: Analysis by CRS based on data from the Bureau of Economic Analysis (BEA).


(...continued)
between the United States and African countries. The IMF estimated that in 2010, SSA had a GDP/capita of $2,273
compared to $46,860 for the United States, measured on a PPP basis.
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Figure 6. Stock of U.S. FDI Abroad, by Destination
(share of total, 2010)
Middle
Africa
East
Canada
1%
1%
8%
Asia and
Pacific
16%
Europe
Latin
55%
America
19%

Source: Analysis by CRS based on data from the Bureau of Economic Analysis (BEA).
Figure 7. Stock of U.S. FDI in Africa by Industry Sector, 2010
(in $ millions)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Information Professional,
Wholesale
Other
Depository Manufacturing Finance and
Mining
Scientific, and
Trade
Industries
Institutions
Insurance
Technical
Services

Source: Analysis by CRS based on data from the Bureau of Economic Analysis (BEA).
Notes: Excludes U.S. stock of direct investment in holding companies.
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AGOA Legislation and Issues in the 112th Congress
Third-Country Fabric Provision Expiration
A provision in AGOA that allows duty-free treatment of apparel assembled in one or more lesser-
developed SSA countries regardless of the country of origin of the fabric (“third-country fabric
provision”), subject to a cap, expires on September 30, 2012. Congress may consider a measure
seeking to extend this provision in the 112th Congress.
Lesser-developed countries are defined in AGOA as those with a per capita gross national product
of less than $1,500 per year as measured by the World Bank.36 In subsequent amendments of
AGOA, Botswana, Namibia, and Mauritius were also added to the list of lesser-developed
countries (§112 of P.L. 106-200, as amended). At present, 27 AGOA-eligible countries qualify for
the third-country fabric provision (see Table 10).
The quantitative limitation on third-party fabric, set each fiscal year, is announced annually by the
Committee for the Implementation of Textile Agreements (CITA).37 The AGOA Acceleration Act
of 2004 raised the quantitative limit to a maximum of 3.5% (by quantity) of all U.S. apparel
imports. In September 2011, CITA announced that the amount imported under this provision, for
the 12-month period beginning October 1, 2011, must be no more than 938,715,171 square
meters equivalent (SMEs). Any imports from qualifying SSA countries in excess of these
quantities are subject to otherwise applicable tariffs.38 As Table 8 indicates, imports under the
provision from eligible countries are far below the quota allowance.39
Table 8. U.S. imports from Lesser Developed AGOA Countries under the Third-
Country Fabric Provision
(in millions of Square Meter Equivalents (M2))

2010
2011
YTD April 2011
YTD April 2012
Total Quota Allowance
814.400
866.700
866.700
938.700
Total Imports
191.648
199.857
62.049
61.869
Kenya

68.097 74.476 23.301
24.195
Lesotho

71.702 64.630 20.667
21.115
Swaziland
26.800
19.991
7.986
3.893
Mauritius
11.731
17.930
4.758
5.857
Tanzania

3.332 6.942 1.137
2.939
Ethiopia

2.949 6.128 1.623
1.621

36 19 U.S.C. § 3721(c)(3). The statute refers to the International Bank for Reconstruction and Development, one of the
five institutions that make up the World Bank Group.
37 CITA is an interagency group chaired by the Department of Commerce that is responsible for matters affecting
textile trade policy and supervising the implementation of all textile trade agreements. CITA was established by
Executive Order 11651 on March 3, 1972 (44 Federal Register 4699).
38 75 Federal Register 59664, September 27, 2011.
39 Data from the Office for Textiles and Apparel, Department of Commerce website, http://otexa.ita.doc.gov.
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2010
2011
YTD April 2011
YTD April 2012
Malawi

4.066 4.689 1.313
0.883
Botswana

2.431 3.292 0.969
1.316
Ghana

0.188 1.610 0.156
0.049
Uganda

0.087 0.138 0.138
0.000
Cameroon

0.001 0.016 0.001
0.000
Mozambique

0.000 0.014 0.000
0.000
Liberia

0.000 0.000 0.000
0.000
Source: Office of Textiles and Apparel, Department of Commerce.
The fact that only 23% of the allowable third-country fabric provision quota is currently being
used could mask the fact that several SSA countries, including Lesotho, Kenya, Mauritius,
Swaziland, and Botswana, have exported a significant amount (both by quantity and value) of
apparel under the provision (see Table 9). For the countries above—all of whom, with the
exception of Botswana, are major beneficiaries of AGOA by percentage of utilization (see Table
11
)—U.S. apparel imports represent the major portion of their benefits under the AGOA
preference.
Table 9. Top Ten Apparel Exporters under AGOA
(actual $ U.S.)
Country
2011 (Value)
Lesotho 314,311,152
Kenya
258,886,230
Mauritius
153,428,075
Swaziland
76,579,510
Botswana
15,475,230
Malawi
13,483,949
Ethiopia
9,966,621
South Africa
5,277,269
Tanzania
5,118,819
Ghana
1,267,006
Total Above
853,793,861
Al Other
1,021,392
Total
854,815,253
Source: U.S. International Trade Commission Trade Dataweb, http://www.usitc.gov
Notes: Imports for Consumption.

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Africa-Related Trade Legislation in the 112th Congress
H.R. 5986 (introduced June 21, 2012) and related bill S. 3326 (introduced June 21, 2012) seek to
amend AGOA to extend the third-country fabric program and to add South Sudan to the list of
eligible countries. They also seek to make technical corrections to the Harmonized Tariff
Schedule regarding textile and apparel rules of origin for the Dominican Republic-Central
America-United States FTA, and to reauthorize import sanctions for Burma.
Two additional bills introduced last year also seek to extend the third-country fabric provision.
H.R. 2493 (introduced July 11, 2011) and its companion bill in the Senate, S. 2007 (introduced
December 15, 2011), would extend the third-country fabric provision until 2015, and included the
Republic of South Sudan (which became independent from Sudan in July 2011) in the list of
countries included in the definition of sub-Saharan Africa in the act.40 These bills are currently in
committee.
H.R. 656 (introduced February 11, 2011), in part, directs the President to establish a Special
Representative for United States-Africa Trade, Development, and Diaspora Affairs within the
U.S. Department of State. The role of the representative would be to promote U.S.-African trade
and investment relations; facilitate international learning exchanges; establish a database for
information sharing; and consult with African governments, the private sector, and United
Nations agencies regarding economic development in Africa. This bill is currently in committee.
H.R. 4221 (introduced March 20, 2012) and its companion bill in the Senate, S. 2215 (introduced
March 21, 2012), seek to increase U.S. exports to Africa, in part, through strategies aimed at
developing relationships between the United States and African countries on a government-to-
government level, as well as fostering private sector U.S.-African ties. Hearings were held on this
legislation in the House Committee on Foreign Affairs Subcommittee on Africa, Global Health,
and Human Rights on April 17, 2012.
AGOA Legislation and Amendments
The original AGOA legislation, the African Growth and Opportunity Act (AGOA; Title I, Trade
and Development Act of 2000; P.L. 106-200), was approved by Congress in 2000, to assist the
economies of sub-Saharan Africa and to improve economic relations between the United States
and the region. The following section of this report examines the major provisions of AGOA,
related legislative initiatives, and other developments since enactment.
Beneficiary Countries
Subtitle A of AGOA authorized the President to designate sub-Saharan African countries as
beneficiary countries eligible to receive duty-free treatment for certain articles that are the
growth, product, or manufacture of that country. It directed that in designating a beneficiary
country, the President must determine that the country (1) has established, or is making continual
progress toward establishing a market-based economy and is taking other designated actions; (2)
does not engage in activities that undermine U.S. national security and foreign policy interests;

40 This definition is contained in §107 of P.L. 106-200.
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and (3) does not engage in gross violations of internationally recognized human rights or provide
support for international terrorism.
Table 10. Beneficiary Countries under the African Growth and Opportunity Act
(as of May 2012)
Republic of Angola
Republic of Ghana * *
Democratic Republic of Sao Tome
and Principe
Republic of Benin * *
Republic of Guinea
Republic of Senegal * *
Republic of Botswana * *
Republic of Guinea-Bissau
Republic of Seychelles
Burkina Faso * *
Republic of Kenya * *
Republic of Sierra Leone * *
Republic of Burundi
Kingdom of Lesotho * *
Republic of South Africa
Republic of Cameroon * *
Republic of Liberia * *
Kingdom of Swaziland * *
Republic of Cape Verde * *
Republic of Malawi * *
United Republic of Tanzania * *
Republic of Chad * *
Republic of Mali * *
Republic of Togo
Union of the Comoros
Islamic Republic of Mauritania
Republic of Uganda * *
Republic of Congo
Republic of Mauritius * *
Republic of Zambia * *
Republic of Cote d’Ivoire
Republic of Mozambique * *

Republic of Djibouti
Republic of Namibia* *

Ethiopia * *
Republic of Niger * *

Gabonese Republic
Federal Republic of Nigeria * *

Republic of the Gambia * *
Republic of Rwanda * *

Source: Harmonized Tariff Schedule of the United States, Revision 2, May 2012.
Notes: Countries in SSA region not currently AGOA-eligible: Democratic Republic of Congo, Eritrea,
Equatorial Guinea, Madagascar, Somalia, Sudan, and Zimbabwe.
* * Beneficiary country is eligible for the lesser-developed country special rule for apparel (third-country fabric
provision).
AGOA requires that the President monitor and report annually on the progress of each country in
meeting the terms for AGOA eligibility. Under this requirement, Presidents have made, at the end
of each year, annual designations of the countries eligible for AGOA benefits for the following
year. The last presidential proclamation made with respect to AGOA was Proclamation 8741 of
October 25, 2011.41 This proclamation, among other things, reinstated the AGOA eligibility of
Cote d’Ivoire, Guinea, and Niger, and also designated them each “lesser developed beneficiary
sub-Saharan African countries.” Thus, 40 SSA countries are now eligible to receive AGOA
benefits.
Benefits
Subtitle B of AGOA describes the trade-related benefits that are available to AGOA-eligible
countries. Among these benefits is preferential duty-free treatment for certain articles under the

41 76 Federal Register 67035.
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U.S. Generalized System of Preferences (GSP). The GSP program is a unilateral trade preference
regime that allows certain products from designated developing countries to enter the United
States duty-free. In the AGOA Acceleration Act of 2004 (P.L. 108-274), GSP benefits were
extended to AGOA countries until September 30, 2015.42 Therefore, AGOA countries will
continue to receive GSP benefits until that date, regardless of any expiration of the GSP program.
AGOA beneficiaries are exempt from certain caps on allowable duty-free imports under the GSP
program (“competitive need limitations”).43

“Import-Sensitive” Articles Ineligible for GSP Preferences
1. Textile and apparel articles which were not eligible articles for purposes of this subchapter on January 1, 1994, as
this subchapter was in effect on such date.
2. Watches, except those watches entered after June 30, 1989, that the President specifically determines, after public
notice and comment, will not cause material injury to watch or watch band, strap, or bracelet manufacturing and
assembly operations in the United States or the United States insular possessions.
3. Import-sensitive electronic articles.
4. Footwear, handbags, luggage, flat goods, work gloves, and leather wearing apparel which were not eligible articles
for purposes of this subchapter on January 1, 1995, as this subchapter was in effect on such date.
5. Import-sensitive semi-manufactured and manufactured glass products.
6. Any other articles which the President determines to be import-sensitive in the context of the Generalized System
of Preferences.
Source: 19 U.S.C. 2463(b).

AGOA-eligible countries may also receive duty-free treatment for certain “import sensitive”
categories of products (see box above) that are identified as ineligible for duty-free treatment
under GSP, provided that the President determines, after consultation with the International Trade
Commission, that the product is not import-sensitive in the context of imports from AGOA
beneficiaries.44 However, the President may not grant duty-free treatment for textile or apparel
products; rather, the AGOA statute provides specific benefits for certain limited categories of
textiles and apparel.
Textile and Apparel Provisions
AGOA, as amended, allows duty-free and quota-free treatment for eligible textile and apparel
articles in qualifying SSA countries through 2015. Qualifying articles include:

42 P.L. 106-200, as amended by §7 of P.L. 108-274.
43 See CRS Report RL33663, Generalized System of Preferences: Background and Renewal Debate, by Vivian C.
Jones.
44 P.L. 93-618, §506A, as added by §111(a) of P.L. 106-200, and as amended by §7 of P.L. 108-274. The USITC
conducts a study to determine the import activity and sensitivity of the targeted product(s) from AGOA countries, and
reports its determinations to the President. The President may also grant this status, with respect to certain import
sensitive articles, to all GSP-qualifying countries.
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• Apparel assembled in one or more AGOA beneficiary countries from U.S. yarn
and fabric;
• Apparel made of SSA (regional) yarns and fabrics, subject to a cap until 2015;
• Apparel made in a designated lesser-developed country (LDC) of third-country
yarns and fabrics, subject to a cap until September 30, 2012 (see “Third-Country
Fabric Provision Expiration”);
• Apparel made of yarns and fabrics not produced in commercial quantities in the
United States (determination must be made that the yarn or fabric cannot be
supplied by the U.S. industry in a timely manner, and to extend preferential
treatment to the eligible fabric);
• Certain cashmere and merino wool sweaters;
• Eligible handloomed, handmade, or folklore articles and ethnic printed fabrics
(certain countries only); and
• Textiles and textile articles produced entirely in an LDC SSA beneficiary
country;
• Certain handloomed, handmade, ethnic printed fabrics, or folklore articles
(certain countries only).45
To receive the duty-free and quota-free treatment for textile and apparel products as described
above, beneficiary countries must first adopt an efficient visa (“tracking”) system to prevent
unlawful transshipment. They also must work with the U.S. Customs Service to report exports
and prevent illegal trade. AGOA also provides that the Secretary of Commerce must monitor U.S.
imports under AGOA for surges in textile and apparel imports, with the possible withdrawal of
duty-free treatment if imports surge beyond a certain level.46
AGOA Non-Textile Rules of Origin
Non-textile products from AGOA countries must also meet certain rules of origin (ROO)
requirements in order to qualify for duty-free treatment. First, duty-free entry is only allowed if
the article is imported directly from the beneficiary country into the United States.
Second, at least 35% of the appraised value of the product must be the “growth, product or
manufacture” of a beneficiary developing country, as defined by the sum of (1) the cost or value
of materials produced in the beneficiary developing country (or any two or more beneficiary
countries that are members of the same association or countries and are treated as one country for
purposes of the U.S. law) plus (2) the direct costs of processing in the country.47 Up to 15% of the
required 35% of the appraised value may be of U.S. origin, and any amount of production in other
beneficiary SSA countries may also contribute to the value-added requirement.48

45Department of Commerce, Office of Textiles and Apparel (OTEXA) Summary of AGOA textile and apparel
provisions at OTEXA website, http://otexa.ita.doc.gov.
46 Ibid.
47 §506A of P.L. 93-618, as added by §111 of P.L. 106-200, and amended by §7 of P.L. 108-274.
48 Ibid.
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Amendments to AGOA
Congress has passed legislation to amend AGOA four times since its initial passage. This
legislation includes the Trade Act of 2002, the AGOA Acceleration Act of 2004, the
Miscellaneous Trade and technical Corrections Act of 2004, and the Africa Investment Incentive
Act of 2006.
Trade Act of 2002
In 2002, Congress amended AGOA for the first time through the Trade Act of 2002 (P.L. 107-
210), which included adjustments to the textile and apparel provisions. An important change
pertained to the cap that AGOA had set on imports of apparel assembled in an AGOA country
from fabric made in an AGOA country (see the third bullet under “Textile and Apparel
Provisions” above). The Trade Act of 2002 doubled this cap, increasing it to 7% in FY2008. The
act, however, left the cap unchanged at 3.5% under the special rule for lesser-developed countries.
The act also allowed Namibia and Botswana to qualify for the special rule for lesser-developed
countries, even if their per capita incomes exceeded the limit set under AGOA. In addition, it
specifically extended AGOA benefits to knit-to-shape articles and to garments cut in both the
United States and an AGOA beneficiary country (“hybrid cutting”) and made a correction to
extend AGOA benefits to merino wool sweaters knit in AGOA beneficiary countries.
The Trade Act of 2002 also included other AGOA-related provisions. It stated that U.S. workers
could be found eligible for trade adjustment assistance if U.S. production shifted to an AGOA
beneficiary country and other conditions were met.49 It authorized $9.5 million to the then-U.S.
Customs Service for textile transshipment enforcement, and further specified that two permanent
positions be assigned to South Africa for AGOA enforcement and that additional travel funds be
allocated for verification in sub-Saharan Africa. The act also required that $1.317 million of the
Customs Service budget be spent on programs to help sub-Saharan African countries develop visa
and anti-transshipment systems.
AGOA Acceleration Act of 2004
In 2004, Congress further amended AGOA through the AGOA Acceleration Act of 2004 (P.L.
108-274). This legislation extended the deadline for AGOA benefits to 2015, and it also extended
the special rule for LDCs from September 2004 to September 2007. It further stipulated that the
cap on the volume of allowable U.S. apparel imports under this rule would be decreased starting
in the year beginning September 2004, with a major reduction in the year beginning October 2006
(from 2.9% to 1.6%). The rationale behind this change was to encourage fabric production and
vertical integration of the apparel industry in Africa. For apparel imports meeting the yarn
forward rules of origin, the cap was set to remain at 7% until the expiration of the benefits in
2015.
The AGOA Acceleration Act also clarified certain apparel rules of origin to reflect the intent of
Congress. Apparel articles containing fabric from both the United States and AGOA beneficiary
countries were specifically allowed, as were otherwise eligible apparel articles containing cuffs,

49 For more information, see CRS Report R41922, Trade Adjustment Assistance (TAA) and Its Role in U.S. Trade
Policy
, by J. F. Hornbeck and Laine Elise Rover.
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collars, and other similar components that did not meet the strict rules of origin. There was also
clarification that ethnic printed fabric would qualify for duty-free treatment, as long as the fabric
met certain standards regarding its size, form, and design characteristics. In addition, apparel
articles containing fabrics and yarns recognized in the North American Free Trade Agreement
(NAFTA) as being in short supply in the United States were declared as eligible for duty-free
treatment, regardless of the source of such fabric and yarns. The legislation also increased the
maximum allowable content of non-regional or non-U.S. fibers or yarns in AGOA eligible
apparel imports, otherwise known as the de minimis rule, from 7% to 10%.
The AGOA Acceleration Act of 2004 also included a number of directives for the President
related to trade capacity building. One such directive was to provide agricultural technical
assistance by assigning U.S. personnel to at least 10 AGOA beneficiary countries, to help
exporters meet U.S. technical standards for agricultural imports. Another directed the President to
develop policies to encourage investment in agriculture and agricultural processing, as well as
investment in infrastructure projects aimed at improving transportation and communication links
both within Africa and between Africa and the United States. There was also a directive to foster
improved relationships between African and U.S. customs and transportation authorities. An
additional directive was to encourage technical assistance and infrastructure projects to assist in
the development of the ecotourism industry in sub-Saharan Africa. Finally, another directed the
President to conduct a study on each beneficiary country, identifying potential sectors for growth,
barriers to such growth, and how U.S. technical assistance can assist each country in overcoming
these barriers.
Miscellaneous Trade and Technical Corrections Act of 2004
In December 2004, the Miscellaneous Trade and Technical Corrections Act of 2004 (P.L. 108-
429) was passed, which included a technical correction to the AGOA Acceleration Act. The
legislation also allowed Mauritius to qualify for the special rule for LDCs for the one year
beginning October 1, 2004, with a cap of 5% of total eligible imports under this rule.
Africa Investment Incentive Act of 2006
Congress passed the Africa Investment Incentive Act of 2006 in December 2006 (Title VI of P.L.
109-432), which extended the textile and apparel benefits of AGOA until 2015. This act also
extended until 2012 the special rule for LDCs, which allows textiles and apparel quota- and duty-
free access to the U.S. market regardless of the source of materials used, as long as assembly
takes place within an AGOA-eligible LDC. The act also increases the cap on square meter
equivalents under this rule back to the initial level of 3.5%. It also contains an “abundant supply”
provision stipulating that if a certain fabric is determined by the U.S. International Trade
Commission to be available in commercial quantities in AGOA beneficiary countries, then the
special rule will no longer apply to apparel and textiles containing that particular fabric.


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AGOA Trade Trends
According to the United States Trade Representative (USTR), over 93% of U.S. imports from
SSA from AGOA-eligible countries in 2010 entered the United States duty-free, either under
AGOA or GSP, or under zero-duty most-favored-nation (MFN) tariff rates.50 In 2011, U.S.
imports under AGOA and GSP amounted to $53.8 billion (see Table 11).
Table 11. Total U.S. Imports, Imports under AGOA (including GSP), and Utilization
Rate of Preference, 2011
(actual $ U.S.)
Imports Under
AGOA Beneficiary
AGOA (including
Utilization Rate of
(in 2011)
Total U.S. Imports
GSP)
Preference (%)
Chad 3,188,885,282
2,991,225,667
93.80%
Swaziland 83,289,612
77,192,451
92.68%
Nigeria 33,834,587,752
31,008,519,187
91.65%
Angola 13,756,357,845
11,534,181,604
83.85%
Malawi 72,353,659
60,141,734
83.12%
Lesotho 384,351,085
314,335,330
81.78%
Congo (ROC)
2,376,790,086
1,935,228,815
81.42%
Kenya 380,463,239
292,594,742
76.90%
Mauritius 250,482,636
169,190,565
67.55%
Ghana 778,992,716
454,534,351
58.35%
Cameroon 322,218,673
173,784,645
53.93%
South Africa
9,473,431,885
3,797,405,595
40.08%
Namibia 436,337,789
134,316,828
30.78%
Cape Verde
1,467,584
165,226
11.26%
Gabon 4,432,128,840
477,555,593
10.77%
Tanzania 58,244,222
5,751,382
9.87%
Ethiopia 144,404,059
13,874,923
9.61%
Senegal 6,766,267
490,660
7.25%
Gambia 82,442
5,352
6.49%
Botswana 293,285,806
17,063,293
5.82%
Uganda 45,881,727
2,540,952
5.54%
Mali 4,078,609
132,542
3.25%
Sao Tome & Principe
981,624
24,482
2.49%
Mozambique 34,966,794
692,543
1.98%

50 United States Trade Representative website , http://www.ustr.gov/trade-topics/trade-development/preference-
programs/african-growth-and-opportunity-act-agoa.
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Imports Under
AGOA Beneficiary
AGOA (including
Utilization Rate of
(in 2011)
Total U.S. Imports
GSP)
Preference (%)
Rwanda 30,857,888
597,270
1.94%
Djibouti 4,053,092
58,050
1.43%
Sierra Leone
26,480,435
193,761
0.73%
Benin 1,970,887
14,019
0.71%
Zambia 47,321,448
220,669
0.47%
Burkina Faso
3,603,288
6,623
0.18%
Togo 31,744,687
57,584
0.18%
Liberia 158,178,415
0
0.00%
Burundi 9,558,071
0
0.00%
Seychel es 6,265,409
0
0.00%
Comoros 1,778,891
0
0.00%
Mauritania 965,142
0
0.00%
Guinea-Bissau 261,369 0
0.00%
Source: U.S. International Trade Commission Trade Dataweb (http://dataweb.usitc.gov).

Note: “Utilization Rate of Preference” is the value of U.S. imports under AGOA divided by the total
amount of U.S. imports from AGOA countries expressed as a percentage. U.S. Imports for Consumption
Table 12. Top Ten U.S. Imports under AGOA (Excluding GSP)
(actual $ U.S.)
HTS Number
2010
2011
Percent Change
27-Mineral fuels and oil
35,833,825,932
48,497,450,862
35.30%
87- Vehicles, Except Railway Or Tramway,
1,538,204,237 2,038,110,536
32.50%
And Parts
62-Articles of apparel and clothing
368,059,665 445,373,100
21.00%
accessories, not knitted or crocheted
61-Articles of apparel and clothing
358,416,707 409,442,153
14.20%
accessories, knitted or crocheted
72-Iron and steel
141,893,313
204,501,643
44.10%
08-Edible fruit and nuts; peel of citrus fruit or
104,371,648 100,871,339
-3.40%
melons
38-Miscel aneous chemical products
41,692,091
47,955,570
15.00%
22-Beverages, spirits, and vinegar
52,759,899
47,657,887
-9.70%
24-Tobacco and manufactured tobacco
33,362,905 39,949,659
19.70%
substitutes
20-Preparations of vegetables, fruit, nuts, or
18,275,960 17,720,158
-3.00%
other parts of plants
Subtotal
38,490,862,357
51,849,032,907
34.70%
Al Other
26,903,235
34,021,330
26.50%
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HTS Number
2010
2011
Percent Change
Total 38,517,765,592
51,883,054,237
34.70%
Source: U.S. International Trade Commission Trade Dataweb, http://www.usitc.gov.
Notes: Imports under AGOA are a subset of imports from SSA.
In 2011, oil and mineral fuels (mostly crude oil) accounted for about 93% of all U.S. imports (by
value) under the African Growth and Opportunity Act (AGOA), and about 81% of all U.S.
imports from all SSA countries.51 Vehicles and parts were the next-largest category of AGOA
imports at 4%. Apparel products (HTS chapters 61 and 62 combined) amounted to about 2%.52
As shown in Figure 8, the largest portion, by far, of U.S. exports to SSA are to AGOA-eligible
countries. Except for decreases in 2002 and 2009-2010, arguably due to periods of worldwide
recession, these exports have increased markedly over time. As Table 13 indicates, the top
destinations for U.S. products are South Africa, Nigeria, Angola, and Ghana.
Figure 8. U.S. Exports to AGOA-Eligible Countries as a Portion of Total U.S. Exports
to sub-Saharan Africa
(in $ billions)
25
20
15
10
5
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Exports to AGOA
Exports to Rest of SSA

Source: U.S. International Trade Commission Trade Dataweb, http://dataweb.usitc.gov.
Notes: U.S. Domestic Exports, FAS Value.

51 CRS calculations based on data from the U.S. International Trade Commission Trade Dataweb,
http://dataweb.usitc.gov.
52 U.S. Census data from the Global Trade Atlas.
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Table 13. U.S. Exports to AGOA Countries, 2011
(actual $ U.S.)
Country 2011
South Africa
6,848,590,454
Nigeria 4,706,183,368
Angola 1,458,062,000
Ghana 1,155,466,454
Ethiopia 684,957,626
Benin 610,363,392
Kenya 447,392,579
Mozambique 445,907,638
Senegal 258,781,861
Tanzania 250,729,324
Mauritania 241,472,844
Congo (ROC)
222,429,871
Cameroon 216,235,118
Togo 212,522,913
Gabon 197,360,657
Liberia 184,975,506
Djibouti 130,577,790
Zambia 123,078,281
Namibia 121,006,058
Rwanda 118,576,796
Subtotal Above Countries
18,634,670,530
All Other
590,328,884
Total Exports
19,224,999,414
Source: U.S. International Trade Commission Trade Dataweb (http://dataweb.usitc.gov).
Notes: Total Exports, FAS value
AGOA Technical Assistance and Capacity Building
Section 122 of AGOA directed the President to target U.S. government technical assistance and
trade capacity building in AGOA beneficiary countries. This mandate includes assistance to both
government and non-governmental actors. The act directs the President to target technical
assistance to governments to (1) liberalize trade and exports; (2) harmonize laws and regulations
with WTO membership; (3) engage in financial and fiscal restructuring; and (4) promote greater
agribusiness linkages. The act also includes assistance for developing private sector business
associations and networks among U.S. and sub-Saharan African enterprises. Technical assistance
is also to be targeted to increasing the number of reverse trade missions, increasing trade in
services, addressing critical agricultural policy issues, and building capabilities of African states
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to participate in the World Trade Organization, generally, and particularly in services. In FY2010
(latest available data), the United States reported obligating approximately $588 million in trade
capacity building (TCB) assistance to AGOA countries.53 Of this amount, about $341 million was
obligated for physical infrastructure development and $200 million on trade-related agriculture
projects.54
United States-sub-Saharan Africa Trade and Economic Cooperation
Forum

Under AGOA, the President was required to establish within a year of enactment, after
consultation with Congress and the other governments concerned, a United States-sub-Saharan
Africa Trade and Economic Cooperation Forum (hereinafter referred to as the Forum). The act
stated that the President was to direct certain top officials to host the first Forum meeting with
their counterparts from AGOA-eligible countries and countries attempting to meet AGOA
eligibility requirements.55 The purpose of the Forum is to “discuss expanding trade and
investment relations between the United States and sub-Saharan Africa and the implementation of
[AGOA] including encouraging joint ventures between small and large businesses.”
AGOA also required the President to encourage non-governmental organizations and the private
sector to hold similar annual meetings, and it required the President to instruct U.S. delegates to
the Forum to promote a review of HIV/AIDS in each sub-Saharan African country and the effect
on economic development. It required the President to meet, to the extent practicable, with heads
of governments of sub-Saharan African countries at least every two years to discuss expanding
trade and investment relations, and the first such meeting should be within one year of enactment.
AGOA was enacted May 18, 2000, and on May 16, 2001, President Bush established the Forum
and announced plans for its first meeting in Washington in October 2001. The first Forum was
held October 29-30, 2001, in Washington, DC. President Bush addressed the Forum and
announced several initiatives: (1) a $200 million Overseas Private Investment Corporation
(OPIC) support facility to give U.S. firms access to loans, guarantees, and political risk insurance
for investment projects; (2) a regional office of the Trade and Development Agency (TDA) in
Johannesburg to help attract new investment; and (3) the Trade for African Development and
Enterprise Program, initially funded at $15 million, to establish regional hubs to help African
businesses in the global market. (These initiatives were implemented; see discussion below.)
AGOA forums have been held annually since 2001, alternately in the United States or in an SSA
partner country. The 10th AGOA forum was held in Zambia on June 9-10, 2011. The theme of the
Forum was “Enhanced Trade Through Increased Competitiveness, Value Addition, and Deeper
Regional Integration.”
The 11th AGOA Forum was held in Washington, DC, June 14-15, 2012. The theme for this year’s
event was “Enhancing Africa’s Infrastructure for Trade,” and it focused on various aspects
designed to promote trade, including improvements in both physical infrastructure, such as roads

53U.S. Agency for International Development, Trade Capacity Building Database, http://tcb.eads.usaidallnet.gov/.
54 Ibid.
55 Representatives from appropriate Sub-Saharan African regional organizations and government officials from other
appropriate countries in Sub-Saharan Africa also could be invited.
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and ports, and institutional infrastructure, such as the business climate. The Forum also focused
on advancing African initiatives in regional economic integration and increasing awareness
among U.S. businesses of opportunities in Africa. In a speech at the Forum, Secretary of State
Hillary Rodham Clinton called for “urgent” efforts to renew the AGOA third country fabric
provision. Continuing with the Forum’s focus on improved infrastructure, she also highlighted the
need for more “human infrastructure,” or investments in human capital, especially among young
people, throughout the region.
The Forum was followed by a one-time event, the U.S.-Africa Business Conference 2012, held in
Cincinnati, OH, June 21-22. Hosted by the State Department and several other U.S. government
agencies and private business promotion groups,56 the conference sought
to expand on the AGOA Forum by providing an opportunity to both showcase U.S. business
expertise to potential African clients, and to highlight trade and investment opportunities in
Africa to U.S. exporters and investors … [focused] broadly on infrastructure development,
including energy, transportation, and water and sanitation.57
U.S. Agency for International Development (USAID)
AGOA’s mandate to encourage trade-related technical assistance is primarily implemented by
USAID through the African Global Competitiveness Initiative (AGCI), a Presidential Initiative
which supplanted the Trade for African Development and Enterprise (TRADE) initiative in 2006.
The TRADE initiative succeeded the Africa Trade and Investment Policy Program (ATRIP),
which operated from 1998 to 2003. These initiatives are generally used to focus activities around
a common goal, but there are AGOA-related activities funded by other initiatives within USAID.
USAID funds various technical assistance programs throughout Africa aimed at improving trade
within the region and between the region and the United States. USAID supports regional efforts
through its regional missions and the four Regional Hubs for Global Competitiveness (Trade
Hubs), located in Ghana, Senegal, Kenya, and Botswana. USAID bilateral missions support
projects in individual African countries. The missions and hubs work on improving trade policy
both regionally and within country governments. They also have programs to improve trade
infrastructure, such as in transportation and energy, and they have enterprise development
programs which often target specific industries, such as handicrafts and shea butter.
As mentioned above, AGOA encourages the establishment of private sector linkages between
U.S. and SSA businesses. To this end, USAID funds an international business linkage program,
South African International Business Linkages (SAIBL), which is implemented by the Corporate
Council on Africa. SAIBL assists black-owned South African companies to prepare business
plans, achieve International Standards Organization (ISO) certification, participate in U.S.-led
trade delegations, attend trade shows in the United States, and identify public and private sector

56 Sponsors included the Departments of State, Transportation, and Energy, USDA, USAID, Millennium Challenge
Corporation, Export-Import Bank, U.S. Trade and Development Agency, Executive Office of the President, Greater
Cincinnati World Affairs Council, Department of Commerce, The Corporate Council on Africa, U.S. Small Business
Administration, and U.S. Environmental Protection Agency.
57 It also provided “structured networking opportunities for African government officials and business leaders with U.S.
state and local government officials and business leaders; informational sessions on U.S. government opportunities and
services from various federal agencies; and site visits to companies and organizations.” State Department, U.S.-Africa
Business Conference 2012
.
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export financing. It also assists U.S. firms by identifying trade and investment opportunities in
South Africa, by steering U.S. firms to appropriate government and private sector contacts, and
by identifying sources of financing. USAID formerly funded a similar linkage program for West
Africa, the West African International Business Linkages (WAIBL), but it no longer funds this
program. The regional trade hubs implement many of the same types of activities as SAIBL,
except that they focus more on promoting trade in general and not just exports to the United
States.
Assistant U.S. Trade Representative for Africa (AUSTRA)
Section 117 of AGOA supported the creation of this position to serve as the “primary point of
contact in the executive branch for those persons engaged in trade between the United States and
sub-Saharan Africa,” and the chief adviser to the U.S. Trade Representative (USTR) on trade and
investment issues pertaining to Africa. This position previously had been established by President
Clinton in 1998. One primary function of AUSTRA is to make the yearly determinations as to
which countries are eligible for AGOA benefits generally, and also its special textile and apparel
benefits. The AUSTRA also sponsors projects for WTO training for SSA trade negotiators and
provides support for the Trade Advisory Committee on Africa.
Overseas Private Investment Corporation (OPIC)
Section 123 of AGOA expressed the sense of Congress that OPIC should exercise its authority to
support projects in SSA and directed OPIC to increase funds directed to SSA countries. OPIC, a
U.S. development finance agency, seeks to promote economic growth in developing and
emerging economies and expand U.S. exports by providing political risk insurance, project
financing, investment funds support, and other services for U.S. businesses in those countries, in
support of U.S. foreign policy goals. OPIC's programs are intended to promote U.S. private
investment by mitigating risks, such as political risks (including currency inconvertibility,
expropriation, political violence, and terrorism), for U.S. firms making qualified investment
overseas. Since 1974, OPIC has supported investments of nearly $6.3 billion in projects in Africa
(of about $200 billion worldwide).58
Export-Import Bank (Ex-Im Bank)
Ex-Im Bank is the official export credit agency of the U.S. government. It maintains finance and
insurance programs to facilitate U.S. exports to developing countries, especially in circumstances
in which alternative commercial financing is not available, in order to contribute to U.S.
employment. Some Ex-Im Bank programs are used to counter officially backed subsidized export
financing offered by other countries. Its main program instruments are direct loans, loan
guarantees, working capital guarantees, and export credit insurance, all backed by the full faith
and credit of the U.S. government.59

58 CRS Report 98-567, The Overseas Private Investment Corporation: Background and Legislative Issues, by Shayerah
Ilias.
59 CRS Report R42472, Export-Import Bank: Background and Legislative Issues, by Shayerah Ilias.
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Section 124 of AGOA expressed the sense of Congress that the Ex-Im Bank should continue to
expand its financial commitments to its loan guarantee and insurance programs to African
countries. The legislation also commended the Bank’s sub-Saharan Africa Advisory Committee
for its work in fostering economic cooperation between the United States and SSA. This
committee’s work was extended to September 30, 2014, in recent legislation reauthorizing the
Ex-Im Bank (§23 of P.L. 112-122).60
In FY2011, the Ex-Im Bank authorized nearly $1.4 billion to support U.S. exports to SSA
countries ($804 million in direct loans, $466 million in loan guarantees, $68 million in export
credit insurance, and $40 million working capital guarantees), which supported approximately
8% of U.S. exports to SSA.61 Ex-Im Bank-supported exports to SSA have tripled since 2007 from
$434 million to about $1.4 billion in FY2011. About 80% of the number of those transactions
directly supported small businesses.62
U.S. and Foreign Commercial Service (CS)
The U.S. and Foreign Commercial Service is the main export promotion arm of the U.S.
Department of Commerce’s International Trade Administration. CS services are primarily
targeted at small and medium-sized U.S. businesses, providing export promotion services such as
trade counseling, market intelligence, business matchmaking, and commercial diplomacy tools to
assist them in exporting abroad. In 2011, CS employed about 500 staff working in the United
States, operating 108 “U.S. Export Assistance Centers.” CS also staffs 115 offices in more than 70
countries (down from 125 offices in 75 countries in 2010), which employ about 900 overseas
staff, including Foreign Service officers and locally employed staff.63 In 45 other countries where
the CS does not have a presence, it has an agreement with the State Department to fulfill these
functions through its Foreign Service officers and locally employed staff.64
In Section 125 of AGOA, Congress found that the CS presence in SSA had been reduced since
the 1980s and that the level of staffing in 1997 (seven officers in four countries) did not
“adequately service the needs of U.S. businesses attempting to do business in sub-Saharan
Africa.”65 Accordingly, the legislation required the posting of at least 20 CS officers in not less
than 10 countries in SSA by December 31, 2001, “subject to the availability of appropriations.”66
According to the U.S. Commercial Service Annual Report for 2011, there are currently eight CS
staff in Africa. CS staff are located in Accra, Ghana; Nairobi, Kenya; and Cape Town and
Johannesburg, South Africa.67

60 Export-Import Bank Reauthorization Act, 12 U.S.C. 635(b)(9)(B)(iii).
61 Export-Import Bank of the United States, 2011 Annual Report,
http://www.exim.gov/about/reports/ar/2011/exim_2011annualreport.pdf.
62 Ibid.
63 Powering Export Growth, U.S. Commercial Service Annual Report, 2011.
64 The Commerce and State departments agreed to expand this program additional 11 countries in September 2011.
65 AGOA, §125(a)(4).
66 AGOA, §125(b).
67U.S. Commercial Service, Powering Export Growth, U.S. Commercial Service Annual Report, 2011.CS staff are also
located in Cairo, Egypt; Tripoli, Libya; and Casablanca, Morocco.
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Section 125(c) of P.L. 106-200 (AGOA) also directed the International Trade Administration
(ITA) to develop an initiative to (1) identify the best U.S. export prospects in the region; (2)
identify tariff and non-tariff barriers that impede U.S. exports to Africa; and (3) undertake
discussions with African states to increase market access for these goods and services. These
activities are being carried out, in part, by the ITA’s Market Access and Compliance Unit (MAC).
The ITA also maintains the AGOA website at http://www.agoa.gov.
U.S. Trade and Development Agency (TDA)
Though its role is not specifically mentioned in AGOA legislation, the TDA is an independent
agency that operates under a dual mission of promoting economic development and U.S.
commercial interests in developing and middle-income countries. The agency links U.S.
businesses to export opportunities by funding project planning activities, feasibility studies, and
pilot projects overseas; and by sponsoring reverse trade missions, while creating sustainable
infrastructure and economic growth in partner countries. TDA supports projects in economic
sectors such as transportation, energy, and telecommunications. It provides grants to overseas
project sponsors (both public and private sector grantees) who select U.S. companies to conduct
TDA-funded activities. These programs are designed to assist project sponsors to make informed
investment decisions, while opening markets for increased exports of U.S.-manufactured goods
and services. Since 1981, TDA has provided over $90 million for projects in SSA, which the
agency states have resulted in over $1 billion in U.S. exports related to partnerships between
African project sponsors and U.S. firms. In FY2010, TDA obligated funds for 39 projects in SSA
totaling $9.3 million, or approximately 19% of its total program expenditures ($49.7 million).68
Multilateral Initiatives
In addition to domestic agency programs, the United States participates in several multilateral
institutions that provide trade capacity building in Africa and other developing-country regions
and indirectly support the aims of AGOA. The World Bank and regional development banks all
provide trade capacity building assistance, mainly in the form of loans.
The Enhanced Integrated Framework (EIF) is the main multilateral initiative in trade capacity
building. It is a process that assists least developed countries (LDCs) to integrate trade issues into
their national development strategies. The EIF process begins with a diagnostic study of trade
challenges and opportunities in the LDC, and is meant to result in better targeted and coordinated
assistance by all donors. Six international institutions collaborate on the EIF, including the
International Monetary Fund (IMF), the International Trade Center (ITC), the United Nations
Conference on Trade and Development (UNCTAD), the United Nations Development Program
(UNDP), the World Bank, and the WTO. The EIF is funded by an Multi-Donor Trust Fund,
composed of voluntary contributions from multilateral and bilateral donors. Total contribution
receipts to this trust fund equaled $165.1 million as of April 2012, of which the United States
contributed $600,000.69

68 U.S. Trade and Development Agency, 2010 Annual Report. Examples of specific USTDA projects in SSA are
available on the USTDA website at: http://www.ustda.gov/program/regions/subsaharanafrica/.
69 Enhanced Integrated Framework website,
http://www.enhancedif.org/documents/EIF%20toolbox/EIF%20Trust%20Fund%20Current%20Status.pdf.
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The United States has also provided SSA countries with technical assistance and TCB support on
a wide range of WTO-related issues such as trade facilitation, services, and sanitary and
phytosanitary measures, in coordination with the other multilateral institutions mentioned
above.70 The United States has also provided technical support for the efforts of some SSA
countries, such as Ethiopia (still in negotiations) and Togo (WTO accession July 2007), to accede
to the WTO.71
Regional Cooperation and Free Trade Agreements
P.L. 105-200, the original AGOA legislation, contained a section encouraging exploration of new
agreements to encourage trade and investment. AGOA, however, directed the President
specifically toward FTA negotiations, and required more concrete steps regarding potential
actions to be taken to establish such an agreement.
Discussion of potential partners for free trade agreements has revolved around South Africa and
the South African Customs Union (SACU), but several other regional groupings are potential
partners for future trade agreements with the United States. The Southern African Development
Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the East
African Community (EAC), and the West African Economic and Monetary Union (WAEMU)
have all taken steps to begin the process of economic integration, either through trade
liberalization or through steps to promote monetary union. While these groups are being
encouraged in their attempts at regional integration, they are not immediate prospects for FTAs
with the United States. Background on these groups appears in Appendix A.
FTA Negotiations with SACU
On November 4, 2002, then-USTR Robert B. Zoellick notified Congress that negotiations would
be initiated with the SACU member countries.72 These negotiations began in June 2003, but were
postponed indefinitely in April 2006. Observers cited several possible reasons for the
unsuccessful FTA negotiations, including the capacity of SACU nations to negotiate a U.S.-style
(comprehensive and high-standard) FTA, and disagreements between the parties on the scope and
level of ambition of the negotiations.
The United States and SACU signed a Trade, Investment, and Development Cooperation
Agreement (TIDCA) on July 16, 2008, designed to build on and potentially capture some of the
progress made in previous FTA negotiations.73 The TIDCA establishes a forum for consultative
discussions and cooperative work, and creates a framework for discussions on customs and trade
facilitation, technical barriers to trade, sanitary and phytosanitary measures, and trade and
investment relations.74

70 2008 USTR Report, p. 40.
71 Ibid.
72 SACU countries are Botswana, Lesotho, Namibia, South Africa, and Swaziland.
73 U.S. International Trade Representative website, http://www.ustr.gov.
74 Ibid.
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The U.S. decision to negotiate an FTA with SACU, rather than just with South Africa, may have
reflected the large degree of economic integration that exists among the SACU states. The
original SACU agreement dates from the colonial government in 1910 and was renegotiated with
the apartheid government in 1969. A new agreement to more fully integrate the smaller states into
decision-making for the area, which was previously dominated by South Africa, was signed on
October 21, 2002. The agreement is characterized by free movement of goods within SACU, a
common external tariff, and the common revenue pool which is apportioned among the member
states. However, South Africa remains the dominant economy of the region, accounting for 87%
of the population and 91% of the gross domestic product of the customs area (2010 figures).75
U.S. merchandise exports to SACU totaled $7.0 billion in 2011, led by machinery, motor vehicles
and parts, precious metals and stones, mineral fuels and oils, precision equipment (e.g.,
photographic and optical devices), electrical machinery and parts, and aircraft. U.S. merchandise
imports from SACU in 2011 totaled $10.7 billion, and included precious metals and stones, motor
vehicles and parts, iron and steel, and machinery.76
U.S. Trade and Investment Framework Agreements (TIFAs)
Although TIFAs were not specifically addressed in AGOA legislation, the USTR regards TIFAs
as important tools for strengthening trade and economic relations with key SSA countries and
regional organizations.77 As of this writing, the United States has negotiated TIFAs with Angola,
Ghana, Liberia, Mauritius, Mozambique, Nigeria, Rwanda, and South Africa, and with the
COMESA,78 East African Community, and the WAEMU79 regional arrangements. Generally,
TIFAs commit the signatories to expand trade of goods and services, to encourage private sector
investment, and to resolve problems and disputes through consultation and dialogue. To facilitate
these objectives, the signatories of each agreement have established a Council on Trade and
Investment to provide a venue for consultation on trade issues of interest or concern to the parties,
and to work toward the removal of impediments to trade and investment flows. TIFAs are often
considered to be first steps to the negotiation of free trade agreements.
U.S. Bilateral Investment Treaties (BIT)
BITs were not specifically addressed in AGOA, but are regarded as important tools for advancing
bilateral trade. BITs help protect U.S. foreign direct investment and promote economic growth by
advancing important reforms and encouraging the adoption of policies that facilitate and support
foreign investment.80 As of this writing, the United States has signed BITs with Cameroon,
Republic of the Congo (Brazzaville), Democratic Republic of the Congo (Kinshasa),
Mozambique, Rwanda, and Senegal. The goals of the BIT are to protect U.S. investments abroad,

75 International Monetary Fund, International Financial Statistics, retrieved from Economist Intelligence Unit All
Country Data
database.
76 U.S. International Trade Commission data website, at http://dataweb.usitc.gov.
77 2008 USTR SSA Report, p. 42.
78 COMESA is made up of Burundi, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Eritrea, Ethiopia,
Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, South Sudan, Sudan, Swaziland, Uganda, Zambia,
and Zimbabwe.
79 WAEMU/UEMOA members are Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, Gambia, Ghana, Guinea-Bissau,
Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo.
80 Ibid.
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and to encourage market-oriented domestic policy in host countries. Generally, BITs ensure
national treatment for U.S. investments, limit expropriations, enable free repatriation of funds,
place limitations on the imposition of trade-distorting or inefficient practices on U.S.
investments—including requirements in hiring—and provide the right of submission of
investment disputes to international arbitration. These treaties are promoted by the U.S.
government as a method of encouraging the development of international law and trade standards
within the partner country.81

AGOA in Comparative Perspective: European Union Trade Frameworks with Africa
Like the United States, the European Union (EU) has also been active in promoting trade between itself and SSA
countries. The EU-South Africa Agreement on Trade, Development, and Cooperation entered into force on January
1, 2000. This agreement creates a free-trade area between the participants during a 12-year asymmetric transition
period. The EU pledged to remove tariffs on 95% of imports from South Africa during a 10-year period with most
products granted duty-free status in 2002. South Africa will remove duties on 86% of its tariff lines during a 12-year
period with most eliminations occurring between 2006 and 2012. Notably, the agreement does not provide tariff
relief to several important South African agricultural exports, nor to aluminum.
The Cotonou Agreement, signed in Cotonou, Benin, between the European Union and 71 African, Caribbean, and
Pacific nations (ACP) in February 2000, extended non-reciprocal, duty-free access for industrial and processed
agricultural goods to the EU market granted by the 4th Lomé Convention to the end of 2007. The extent of the duty-
free access conferred by Cotonou was subsequently enhanced in March 2001 by the “Everything but Arms” initiative,
which granted LDCs tariff-free access to al goods, except for sugar, rice, and bananas, for which products a tariff-rate
quota system was maintained during a phase-out period ending in 2009. Provisions of the Cotonou Agreement cal for
the negotiation of trade liberalization agreements with regional economic partnerships that could include the regional
African groupings discussed in Appendix A. Preliminary negotiations on the Regional Economic Partnership
Agreements (EPAs) began on September 27, 2002, and were supposed to conclude before the expiration of the
Cotonou Agreement on December 31, 2007. Many African countries opposed signing EPAs because that would mean
opening up their markets to EU imports. In the end, a temporary compromise was reached: most African countries
signed “interim EPAs” to keep their EU trade preferences as they were under the Cotonou Agreement.
On May 14, 2012, the first EPA between the EU and Mauritius, Madagascar, Seychelles, and Zimbabwe went into
effect. These countries will have duty-free/quota-free access to the EU market for exports. In exchange, these
countries agreed to open their markets to EU exports in a 15-year time frame, but may exclude products they
consider import sensitive.82
AGOA: Current and Future Challenges
Several issues may be important to Congress in the oversight of AGOA. These issues concern the
diversification of beneficiary country and industry participants, the continued eligibility of certain
countries for AGOA benefits, the HIV/AIDS epidemic, and the participation of U.S. small
business in AGOA.
Diversification of AGOA Exports. While textile and manufacturing industries
make up a growing part of U.S. imports under AGOA, these imports are dwarfed
by AGOA imports from the petroleum and mining sectors. These industries are
highly capitalized and do not provide extensive employment opportunities for

81 U.S. Trade Representative website, http://www.ustr.gov/trade-agreements/bilateral-investment-treaties.
82European Union, EU’s First Economic Partnership with an African Region Goes Live, Press Release, May 14, 2012,
http://europa.eu/newsroom/press-releases/index_en.htm.
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African workers. AGOA benefits are also concentrated in few countries.
Moreover, several AGOA-eligible countries export very little under the program.
Increasing African economic diversification and export levels, key goals of
AGOA, could arguably be enhanced by continuing and potentially expanding
targeted trade capacity building and technical assistance to countries in the sub-
region, particularly in the sectors where economic activity and production is
concentrated. Agriculture, for instance, is a crucial component of many African
economies and an important source of income for African workers. Increasing
agricultural exports under AGOA, notably of processed goods, could help raise
incomes and spur economic growth. Similarly, targeted technical assistance
aimed at improving productive capacity, infrastructure, and investment policies,
could also spur growth in light manufactured product exports.
Eligibility Standards. A country’s eligibility for AGOA benefits may become a
subject of controversy. Some observers feel that the President must strictly
enforce eligibility requirements to ensure continued adherence to reforms.
However, others have cited the unpredictability of a country’s AGOA benefits
from year-to-year as a source of investment risk, and have suggested minimum
eligibility terms of greater than the current one-year period. Another suggestion
includes allowing Congress to override the President’s decision to terminate
AGOA benefits through legislation. Several countries have been considered
candidates for losing AGOA eligibility.83
HIV/AIDS. The HIV/AIDS pandemic continues to destabilize the economies of
Africa and threatens any progress achieved by AGOA as additional income is
spent, not to raising living standards, but to treat a population afflicted with the
disease. Due to the disease, life expectancy is falling in several AGOA-eligible
countries and in the region as a whole. Even with the advantages that AGOA
preferences confer, investors may be deterred from the region by high medical
costs, by constant replacement of workers stricken with the disease and the
attendant training costs, and by the destabilizing risks associated with a society
containing a large, dying population.
Lack of Uniform Trade Effects Reporting. The initial AGOA legislation
required an annual comprehensive report on U.S.-Africa trade and investment
policy and on implementation of AGOA. The resulting annual report was a
unique and invaluable oversight and trade trend tracking tool for policy-makers,
but the reporting requirement sunsetted in 2008. Congress may wish to consider
reinstating the annual AGOA reporting requirement.
Small Business Participation. Small business accounts for about 55% of the
U.S. GDP, and employs a large portion of American workers. U.S. small
businesses, however, only participate in limited trade with Africa, and reportedly

83 In 2003, the President declared Eritrea and the Central African Republic to be ineligible for AGOA. In 2004, Cote
d’Ivoire was declared ineligible as well, but was reinstated in 2011. In 2009, benefits for Guinea, Madagascar, and
Niger were terminated because the President determined that they were not making continual progress in meeting
AGOA requirements (Guinea and Niger were reinstated in 2011). Also in 2009, Mauritania was removed from AGOA
eligibility, but was reinstated later that year. Lesotho, which is considered an AGOA success story, has been the subject
of persistent complaints from indigenous labor groups regarding working conditions in newly developed textile plants.
In some years, Swaziland has received warnings from the State Department that its human rights record does not meet
AGOA eligibility requirements. Several countries have questionable commitment to privatization and tariff reform.
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very few in the small business community know about AGOA. Some observers
have noted that U.S. small businesses may benefit from AGOA, and in the
process help provide avenues for diversifying African exports. Small business is
also important in Africa, and increased partnership may result in better
participation on both continents. There are multiple ways that U.S. agencies
could become more involved in increasing awareness of AGOA among the small
business community, and providing opportunities for partnership. Examples
include increased investment in and emphasis on the use of USAID’s trade hubs
as a mechanism for U.S. small business entrance into Africa, or an increased
small business emphasis within the mandate of the U.S. Foreign Commercial
Service. The provision of appropriations adequate to enable greater CS
compliance with the original AGOA goal of deploying at least 20 CS officers in
not less than 10 African countries could also further attainment of the goals laid
out under AGOA.

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Appendix A. Regional Economic Integration Among
sub-Saharan Africa Nations

Southern African Development Community (SADC)
This group is composed of the nations of Angola, Botswana, Democratic Republic of the Congo,
Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland,
Tanzania, Zambia, and Zimbabwe. Originally formed by front-line states to lessen economic
dependence on the apartheid regime in South Africa, the group expanded to include South Africa
in 1994. The 1996 Protocol on Trade committed each signatory to remove duties and non-tariff
barriers to SADC members within 12 years, to provide national treatment for each other’s goods,
and to bind existing tariffs at current levels.
Common Market for Eastern and Southern Africa (COMESA)
Founded in 1982 as the Preferential Trade Area of Eastern and Southern Africa, current member
states of the COMESA include Burundi, Comoros, Democratic Republic of the Congo, Eritrea,
Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland,
Uganda, Zambia, and Zimbabwe. The goal of COMESA is to attain a “fully integrated,
competitive, regional economic community with high standards of living for all its people ready
to merge into an African Economic Community.”84 The goal of monetary union by 2025 is
expected to be advanced by the introduction of limited currency convertibility and improved
coordination of fiscal and monetary policy during this time period.
East African Community (EAC)
Comprised of Burundi, Kenya, Rwanda, Tanzania, and Uganda, this organization sought to revive
historic regional integration arrangements that had existed since 1917. This cooperation broke
down in the 1970s due to widespread transshipments and the varied economic paths of its
participants. The community was established once again by the three original members (Kenya,
Tanzania, and Uganda) in 1999.85 On July 1, 2010, the community established an EAC Common
Market providing for free movement of goods, labor, services and capital within the region.86 In
the agreement, the partner states agreed to eliminate tariff, non-tariff, and technical barriers to
trade; harmonize and mutually recognize standards; implement a common trade policy; and ease
cross-border movement of persons through an integrated border management system.87

84 Common Market for Eastern and Southern Africa (COMESA) website.
85 East African Community (EAC) website, http://www.eac.int.
86 Ibid.
87 Ibid.
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West African Economic and Monetary Union (WAEMU)
WAEMU88 is made up of Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, Togo, and
Guinea-Bissau, the sole non-francophone member. This grouping was originally created to
promote economic integration among countries that share the CFA franc (Communauté financière
africaine)
, a currency formerly tied to the French franc prior to its disappearance in 2000 (but still
backed by the French treasury). The member states have espoused the long-term goal of a full
economic union with a common market, macroeconomic convergence, regulatory harmonization,
and a common investment policy. A preferential tariff arrangement was concluded for member
states in 1995, and a customs union with a common external tariff of 22% became operational in
2000. WAEMU countries have established a common accounting system, periodic reviews of
member countries’ macroeconomic policies, a regional stock exchange, and the legal and
regulatory framework for a regional banking system.89

88 WAEMU is also known as UEMOA from its French name, Union Economique et Monetaire Oest-Africaine.
89 2008 USTR SSA Report, p. 39.
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Appendix B. U.S.–SSA Trade Relationship
Table B-1. SSA Countries Trade Relationship with United States and Preference
Program Status

AGOA-
GSP-Least
Lesser
Countries GSP
Developed
AGOA
Developed
BIT TIFA
Angola




2009
Benin




2002b
Botswana




2008c
Burkina Faso




2002b
Burundi




2001a, 2008d
Cameroon




1989
Cape Verde






Central African


Republic




Chad






Comoros




2001a
Democratic Republic
1989 2001a
of Congo (Kinshasa)




Republic of Congo
1994
(Brazzavil e)




Cote d’Ivoire




2002b
Djibouti




2001a
Equatorial Guinea






Eritrea




2001a
Ethiopia




2001a
Gabon






Gambia






Ghana




1999
Guinea






Guinea-Bissau




2002b
Kenya




2001a, 2008d
Lesotho




2008c
Liberia




2007
Madagascar




2001a
Malawi




2001a
Mali




2002b
Mauritania






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Mauritius




2001a, 2006
Mozambique




2005 2005
Namibia




2008c
Niger




2002b
Nigeria




2000
Rwanda




2012 2001a, 2006, 2008d
Sao Tomei and


Principe




Senegal




1990 2002b
Seychelles




2001a
Sierra Leone






Somalia






South Africa




1999,
2008c,2012
South Sudan






Sudan




2001a
Swaziland




2001a, 2008c
Tanzania




2008B
Togo




2002b
Uganda




2001a, 2008d
Zambia




2001a
Zimbabwe




2001a
Source: Analysis by CRS. Data from USTR and USITC.
Notes:
a. As part of the U.S. TIFA with the Common Market for Eastern and Southern Africa (COMESA).
b. As part of the U.S. TIFA with the West African Economic and Monetary Union (WAEMU).
c. As part of the U.S. Trade, Investment, and Development Cooperation Agreement with the Southern
African Customs Union SACU, which is actually a TIDCA
d. As part of the U.S. TIFA with the East African Community (EAC).

Author Contact Information

Vivian C. Jones
Brock R. Williams
Specialist in International Trade and Finance
Analyst in International Trade and Finance
vcjones@crs.loc.gov, 7-7823
bwilliams@crs.loc.gov, 7-1157

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