Updated May 8, 2018
African Growth and Opportunity Act (AGOA)
Overview
Supporting Views—Supporters of AGOA argue that the
What is AGOA? AGOA, a cornerstone of U.S. trade
program affords African producers an important
policy toward sub-Saharan Africa since 2000, is a
competitive advantage in the U.S. market, thereby enabling
nonreciprocal U.S. trade preference program that provides
exports, encouraging investment in the region, boosting
duty-free access to the U.S. market for most exports from
private sector activity and economic growth, and ultimately
eligible sub-Saharan African countries. In addition to
generating demand for U.S. goods and services as the
preferential market access, the Act also requires an annual
region’s economies develop.
forum, known as the AGOA Forum, held between U.S. and
Opposing Views—Opposition is mostly from U.S.
AGOA country officials to discuss trade-related issues.
producers that may face increased import competition from
Additionally, AGOA provides direction to select U.S.
AGOA countries. Such concerns are generally limited due
government agencies regarding their trade and investment
to the low volume of U.S. imports under AGOA, but import
support activities in the region.
competing U.S. producers have lobbied to keep certain
Which countries are eligible? AGOA lists 49 sub-Saharan
products, particularly sugar, out of the program.
African countries that are potential candidates for AGOA
benefits. AGOA eligibility criteria address issues such as
U.S. Imports Under AGOA
trade and investment policy, governance, worker rights, and
U.S. non-energy imports under AGOA have grown from
human rights, among other issues, which countries must
$1.3 billion in 2001 to $4.3 billion in 2017, but they remain
satisfy to be beneficiaries of the AGOA preferences. The
concentrated in select countries and industries.
President annually reviews and determines each country’s
AGOA eligibility. There are currently 40 AGOA-eligible
Total U.S. AGOA imports were $13.8 billion in 2017.
countries. The Trump Administration reinstated benefits for
Crude oil accounted for $9.2 billion of U.S. AGOA
The Gambia and Swaziland on December 22, 2017.
imports (70%) in 2017. Crude import values have
increased over the past two years but remain more than
The Administration also recently concluded an out-of-cycle
$40 billion below their peak in 2011, due to lower prices
eligibility review for several countries in the East African
and increased U.S. production. Nigeria, Angola, Chad,
Community (EAC) regarding increased tariff barriers on
and Ghana are the major AGOA oil exporters.
used clothing imports from the United States. Tanzania and
Uganda took steps to remove the new barriers, as Kenya
Non-energy imports (excluding crude and refined
had done earlier, and ultimately maintained their AGOA
petroleum products) were $4.3 billion (Figure 1), with
eligibility. Rwanda, however, continues to maintain the
much of this coming from South Africa ($2.9 billion,
import restrictions. On March 29, the Administration sent
with $1.2 billion in South African autos alone). Other
Congress the requisite 60-day notification of its intent to
top products were apparel and metals.
suspend Rwanda’s AGOA benefits on apparel exports.
Aside from South Africa and oil producers, Kenya,
Lesotho, Mauritius, and Madagascar are top users of the
What is the authorization status? AGOA was first
preference program, exporting mostly apparel products.
established by Congress in 2000 and has been amended
Together with South Africa these countries accounted
several times. The Trade Preferences Extension Act of
for 90% of U.S. non-energy AGOA imports in 2017.
2015, P.L. 114-27, extended AGOA’s authorization for ten
years to September 2025.
Figure 1. U.S. Non-Energy AGOA Imports by Country
($ in millions, 2017)
What is the goal? Through AGOA, the U.S. Congress
seeks to increase U.S. trade and investment with the region,
promote sustainable economic growth through trade, and
encourage the rule of law and market-oriented reforms.
Is there pending legislation? Congress recently passed the
AGOA and Millennium Challenge Act Modernization Act,
P.L. 115-167. The Act, which became law on April 23,
requires the Administration to increase transparency,
including through an official AGOA website with
information on, among other things, the outcomes of the
annual AGOA Forum. It also directs the Administration to
promote AGOA utilization, product diversification, and
regional cooperation, and to educate African entrepreneurs
on quality standards and production strategies.
Source: Analysis by CRS. Data from USITC.
Notes: Non-energy refers to al goods except HTS Chapter 27.
https://crsreports.congress.gov
African Growth and Opportunity Act (AGOA)
Key Aspects of AGOA
remove country eligibility entirely or for specific products,
Trade Preferences—AGOA’s main component is duty-
but must notify Congress 60 days before any termination.
free treatment of U.S. imports of certain products from
Reporting Requirements—The 2015 reauthorization
beneficiary countries. This tariff savings can help AGOA
reinstated a previous AGOA requirement to report
exporters compete with lower-cost producers elsewhere.
biennially on overall U.S. trade and investment relations
Relation to the Generalized System of Preferences—The
with the region. The first report came out in June 2016.
Generalized System of Preferences (GSP) is another U.S.
Other Trade Agreement Negotiations—Congress has
trade preference program, but unlike AGOA, GSP is not
directed the Administration to seek reciprocal trade and
regionally based. The AGOA preferences include all
investment negotiations with AGOA countries since 2000.
products covered by GSP, as well as some products
Free trade agreement (FTA) negotiations were initiated
excluded from GSP, such as autos and certain types of
with the South African Customs Union (SACU), but were
textiles and apparel. In both GSP and AGOA, additional
suspended in 2006 due to divergent views over the scope of
benefits are granted to least-developed countries. Congress
talks. U.S. FTAs typically include comprehensive tariff
has historically granted GSP shorter authorization periods
than AGOA. GSP’s
elimination as well as enforceable commitments on
authorization lapsed from January to
services, investment, intellectual property rights, labor, and
April of this year, but is now reauthorized through 2020.
environment. The Trump Administration wants to negotiate
Apparel and Third-Country Fabric Provision—AGOA’s
a new “model” bilateral FTA with an African country, but
duty-free treatment of certain apparel products is significant
has not specified countries of focus or how a new model
because (1) apparel articles face relatively high U.S. import
FTA may differ from previous U.S. FTAs. Kenya and
tariffs; (2) they are generally excluded from GSP; (3) they
Mauritius have expressed interest in pursuing a U.S. FTA.
can be readily manufactured in developing countries as
AGOA also encourages beneficiary countries to implement
their production requires less skilled labor and capital
their WTO commitments.
investment; and (4) production in this sector can be a first-
step toward higher value-added manufacturing. The third
. .we’re going to have to pick out an African country. .and
country fabric provision in AGOA, which is a major factor
enter into an [FTA] with that country. .that wil , if done
in AGOA countries’ competitiveness in the sector, allows
properly, become a model for these other countries.
limited amounts of U.S. apparel imports from least-
USTR Robert Lighthizer, January 31, 2018
developed sub-Saharan African countries to qualify for
duty-free treatment even if the yarns and fabrics used in
Issues for Congress
their production are imported from non-AGOA countries
AGOA generally enjoys bipartisan support in Congress and
(e.g., apparel assembled in Kenya with Chinese fabrics can
is not subject to reauthorization until 2025. Current issues
qualify for duty-free treatment under AGOA when
for consideration by Congress include the following:
imported into the United States).
Trump Administration Trade Policies. The Trump
Trade Capacity Building (TCB)—AGOA also directs the
Administration’s focus on the trade deficit suggests it
President to provide TCB to AGOA beneficiaries. This
may look skeptically at nonreciprocal preference
assistance aims to encourage governments to (1) liberalize
programs, which have a direct and immediate effect on
trade policy; (2) harmonize laws and regulations with WTO
U.S. imports and indirect and longer term effect on U.S.
membership commitments; (3) engage in financial and
exports. Congress may seek to consult closely with the
fiscal restructuring; and (4) promote greater agribusiness
Administration over its enforcement of eligibility
linkages. The U.S. Agency for International Development
criteria to ensure adherence to congressional objectives.
(USAID) administers certain TCB-related projects in
support of AGOA, including funding three African Trade
Third-Party Agreements. Reciprocal agreements
and Investment Hubs, which work to increase AGOA
between AGOA beneficiaries and third-parties (e.g.,
utilization by beneficiary countries and facilitate regional
EU-South Africa) may disadvantage U.S. exporters.
producers’ access to international markets. AGOA also
U.S. potential responses include FTA negotiations, other
directs the Overseas Private Investment Corporation
less extensive reciprocal U.S. agreements, and removal
(OPIC), Export-Import Bank, U.S. Foreign Commercial
of AGOA eligibility. The recently concluded African
Service, and USDA on expansion of their activities in sub-
Continental Free Trade Area includes 44 African
Saharan Africa, including personnel requirements.
countries and raises questions for Congress over U.S.
interest in supporting regional trade integration efforts,
AGOA Forum—AGOA requires the President to convene
and the potential costs and benefits of negotiating new
an annual forum to discuss trade and investment relations
FTAs bilaterally versus with existing regional blocs.
and implementation of AGOA, which typically alternates
Beneficiary Country Participation. More than 90% of
between Washington, D.C., and an AGOA country. The
U.S. non-energy imports under AGOA come from five
16th AGOA Forum took place in Lomè, Togo, August 2017.
countries. Congress may examine factors affecting other
Country Eligibility Reviews—The Executive determines
countries’ capacity to export under AGOA, including
eligibility based on statutory criteria. The process includes
funding levels for and effectiveness of TCB assistance.
an annual public comment period and hearing, and, as
amended by the 2015 reauthorization, allows for out-of-
Brock R. Williams, Analyst in International Trade and
cycle reviews (outside the annual review period) in
Finance
response to public petitions. The Administration may
IF10149
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African Growth and Opportunity Act (AGOA)
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https://crsreports.congress.gov | IF10149 · VERSION 11 · UPDATED