April 22, 2015
African Growth and Opportunity Act (AGOA)
Overview
Opposing Views—Opposition to AGOA comes primarily
from U.S. producers that may face increased import
What is AGOA? AGOA, a cornerstone of U.S. trade
competition from AGOA countries. Due to the relatively
policy toward sub-Saharan Africa since 2000, is a non-
small level of U.S. imports under the program, such
reciprocal U.S. trade preference program that provides
concerns may be relatively limited. Many observers are
duty-free access to the U.S. market for most exports from
generally supportive of AGOA, but would like reforms.
eligible sub-Saharan African countries. In addition to
preferential market access, the Act also requires an annual
Key Aspects of AGOA
forum, known as the AGOA Forum, held between U.S. and
AGOA country officials to discuss trade-related issues.
Trade Preferences—The primary component of AGOA is
Additionally, AGOA provides direction to select U.S.
the duty-free treatment of U.S. imports of certain products
government agencies regarding their trade and investment
from beneficiary countries. This tariff savings can
support activities in the region.
potentially help AGOA exporters compete with lower-cost
producers in other countries.
What countries are eligible? AGOA lists 49 sub-Saharan
African countries that are potential candidates for AGOA
Relation to the Generalized System of Preferences—The
benefits. AGOA eligibility criteria address issues such as
Generalized System of Preferences (GSP) is another U.S.
trade and investment policy, governance, worker rights, and
preference program, but unlike AGOA, GSP is not
human rights, among other issues, which countries must
regionally based. The AGOA preferences include all
satisfy to be beneficiaries of the AGOA preferences. The
products covered by GSP, as well as some products
President annually reviews and determines each country’s
excluded from GSP, such as autos and certain types of
AGOA eligibility. There are currently 39 AGOA-eligible
textiles and apparel. In both GSP and AGOA, additional
countries, including Madagascar and Guinea-Bissau, whose
benefits are granted to least-developed countries.
AGOA benefits were reinstated in 2014. Benefits were
removed for South Sudan, Swaziland, and the Gambia on
Apparel and Third-Country Fabric Provision—AGOA’s
January 1, 2015, due to worker and human rights violations.
duty-free treatment of certain apparel products is significant
because (1) apparel articles face relatively high U.S. import
What is the authorization status? The AGOA preference
tariffs; (2) they are excluded from GSP; (3) they can be
program was initially enacted in 2000. It has been amended
manufactured in developing countries as their production
five times, including one overall extension in 2004, as well
utilizes lower-skilled labor and requires little capital
as technical modifications and extensions of time-limited
investment; and (4) production in this sector can be a first-
provisions (e.g., third-country fabric provision). AGOA
step toward higher value-added manufacturing. The third-
authorization is currently set to expire on September 30,
country fabric provision in AGOA, which some argue is
2015.
critical to AGOA countries’ competitiveness in the sector,
allows some U.S. apparel imports from least-developed
What’s the goal? Through AGOA, the U.S. Congress
sub-Saharan African countries to qualify for duty-free
seeks to increase U.S. trade and investment with the region,
treatment even if the yarns and fabrics used in their
promote sustainable economic growth through trade, and
production are imported from non-AGOA countries.
encourage the rule of law and market-oriented reforms.
Trade Capacity Building—Unlike other U.S. preference
programs, AGOA directs the President to provide U.S.
[T]o keep our trade growing, we need to renew
government technical assistance and trade capacity building
AGOA. But we’ve also got to make some decisions
(TCB) in AGOA beneficiary countries. This assistance aims
about how we can make it more effective. President
to encourage governments to (1) liberalize trade policy; (2)
Obama, July 1, 2013.
harmonize laws and regulations with WTO membership
commitments; (3) engage in financial and fiscal
Supporting Views—Supporters of AGOA argue that the
restructuring; and (4) promote greater agribusiness
program affords African producers a vital competitive
linkages. The United States Agency for International
advantage in the U.S. market, thereby enabling exports,
Development (USAID) administers certain TCB-related
encouraging investment in the region, boosting private
projects in support of AGOA, including funding for the
sector activity and economic growth, and ultimately
three African Trade Hubs, which work to increase AGOA
generating demand for U.S. goods and services as the
utilization by beneficiary countries.
region’s economies develop.
Executive Branch Initiatives—AGOA encourages the
President to seek partners in the region for reciprocal free
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African Growth and Opportunity Act (AGOA)
trade agreements (FTAs). Negotiations were initiated with
Renewal Debate
the South African Customs Union (SACU), but were
Country eligibility and reauthorization—Many views
eventually suspended in 2006. Until the provision expired
exist regarding the appropriate scope of AGOA eligibility
in 2008, AGOA also required the President to report
criteria and the length of AGOA authorization. Some
annually to Congress on U.S. trade and investment policy
stakeholders support less stringent eligibility requirements,
toward sub-Saharan Africa and AGOA implementation.
less frequent reviews, and a longer or indefinite
AGOA also directs the Overseas Private Investment
reauthorization period, while others argue that shorter
Corporation (OPIC), Export-Import Bank, and U.S. Foreign
authorization terms allow for greater congressional
Commercial Service to expand their activities in sub-
oversight and that strong eligibility requirements and
Saharan Africa.
annual reviews encourage needed domestic reforms.
AGOA Forum—AGOA requires the President to convene
Utilization of benefits— In 2014, over 70% of U.S. non-
an annual forum to discuss expanding trade and investment
energy imports under AGOA came from South Africa, and
relations and the implementation of AGOA. The 13th
AGOA exports were less than $1 million for the majority of
AGOA Forum took place in Washington D.C. on August 4,
countries. Some view AGOA country export strategies and
2014, in conjunction with the larger U.S.-Africa Leaders
greater targeting of TCB toward potentially competitive
Summit, and focused on AGOA’s potential renewal.
industries as important to increase use of the program.
Product coverage—AGOA covers most products, but
U.S. Imports Under AGOA
some, mostly agricultural products, remain excluded.
Including more products under AGOA may increase use of
U.S. non-energy imports under AGOA have grown from
AGOA benefits, but may be opposed by U.S. producers.
$1.3 billion in 2001 to $4.4 billion in 2014, but they remain
Trade capacity building funding—Many supporters argue
highly concentrated in select countries and industries.
that AGOA may be underutilized due to beneficiary
• U.S. imports under AGOA were $14.2 billion in 2013.
countries’ inability to take advantage of AGOA benefits.
•
Although AGOA mandates that TCB assistance be
Crude oil accounted for 68% of U.S. AGOA imports,
provided to increase program use, there is debate over the
but crude imports have declined by more than $40
types and levels of TCB and its effectiveness.
billion since 2011, largely due to U.S. production.
Angola, Nigeria, Chad, Gabon, and Republic of Congo
Duty-free, quota-free beyond Africa—Some argue that
are the major oil exporters under AGOA.
all least-developed countries, including non-African ones,
•
should receive AGOA preferences, but others are concerned
Non-energy imports (excluding crude and refined
that this could erode the competitiveness of African exports
petroleum products) were $4.4 billion, with much of this
to the United States, due to greater competition.
coming from South Africa ($3.1 billion, with $1.3
billion in South African autos alone). Other top products
Reciprocal access and two-way trade—There is a greater
were apparel and metals.
push for reciprocal trade agreements with some AGOA-
eligible countries, particularly those that have already
• Aside from South Africa and the oil producers, Kenya,
negotiated reciprocal agreements with other parties. Such
Lesotho, and Mauritius, which export mostly apparel
agreements, like that between South Africa and the
products, are the top users of the preference program.
European Union, could disadvantage U.S. exports to Africa.
Together with South Africa these countries accounted
for 92% of all U.S. non-energy imports under AGOA in
Trade disputes and poultry exports—Some Members of
2014.
Congress have expressed concern over antidumping duties
placed on U.S. poultry exports to South Africa, suggesting
Figure 1. U.S. Non-Energy Imports Under AGOA
South Africa’s AGOA benefits be removed if the situation
($ in millions 2014)
is not resolved. AGOA’s eligibility criteria include
resolution of bilateral trade and investment disputes.
Proposed legislation—Bills to renew AGOA, H.R. 1891/S.
All Other
336
1009, have been introduced. Among other aims, they would
renew all components of the program for 10 years, modify
Mauritius
227
the process of terminating or suspending preferential
treatment, allow direct processing costs to count toward a
Lesotho
289
product’s required regional value content, encourage the
creation of country-specific AGOA strategies and the
Kenya
423
negotiation of FTAs, and require additional reporting.
For more information, see CRS Report R43173, African
South Africa
3,104
Growth and Opportunity Act (AGOA): Background and
Reauthorization.
0
1,000
2,000
3,000

Source: Analysis by CRS. Data from USITC.
Brock R. Williams, bwilliams@crs.loc.gov, 7-1157
Notes: Non-energy refers to all goods except HTS Chapter 27.

IF10149
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