Updated July 18, 2019
African Growth and Opportunity Act (AGOA)
Overview
private sector activity and economic growth, and ultimately
What is AGOA? AGOA, a cornerstone of U.S. trade
generating demand for U.S. goods and services as the
policy toward sub-Saharan Africa since 2000, is a
region’s economies develop.
nonreciprocal U.S. trade preference program that provides
Opposing Views—Opposition is mostly from U.S.
duty-free access to the U.S. market for most exports from
producers that may face increased import competition from
eligible sub-Saharan African countries. In addition to
AGOA countries. Such concerns are generally limited due
preferential market access, the Act also requires an annual
to the low volume of U.S. imports under AGOA, but import
forum, known as the AGOA Forum, held between U.S. and
competing U.S. producers have lobbied to keep certain
AGOA country officials to discuss trade-related issues.
products, particularly sugar, out of the program.
Additionally, AGOA provides direction to select U.S.
government agencies regarding their trade and investment
U.S. Imports Under AGOA
support activities in the region.
Total U.S. AGOA imports were $12.0 billion in 2018,
Which countries are eligible? AGOA lists 49 sub-Saharan
down from $13.8 billion in 2017. Imports remain
African countries that are potential candidates for AGOA
concentrated in select countries and industries but
benefits. AGOA eligibility criteria address issues such as
diversification is increasing, with some countries,
trade and investment policy, governance, worker rights, and
particularly Ethiopia, increasing exports in recent years.
human rights, among other issues, which countries must
satisfy to be beneficiaries of the AGOA preferences. The
Energy products, mainly crude oil, accounted for $8.0
President annually reviews and determines each country’s
billion of U.S. AGOA imports (66%) in 2018, with
AGOA eligibility. There are currently 39 AGOA-eligible
Nigeria, Angola, and Chad as the top suppliers. Crude
countries. President Trump reinstated benefits for The
imports remain more than $40 billion below their 2011
Gambia and Swaziland on December 22, 2017 and removed
peak, due to lower prices and increased U.S. production.
AGOA benefits for Mauritania effective January 1, 2019.
Non-energy imports under AGOA have grown from
$1.3 billion in 2001 to $4.0 billion in 2018. Top non-
In 2018, the Administration also conducted an out-of-cycle
energy import categories include textiles and apparel
eligibility review for several countries in the East African
($1.2 billion), minerals and metals ($773 million),
Community (EAC) regarding increased tariff barriers on
transportation equipment ($699 million), agricultural
used clothing imports from the United States. The President
products ($599 million), and chemicals ($488 million).
determined that Rwanda did not take adequate steps to
remove the import restrictions and partially suspended
South Africa remains the top supplier of AGOA non-
Rwanda’s AGOA benefits, removing duty-free eligibility
energy imports (58% or $2.4 billion in 2018), but its
for its apparel exports, effective July 31, 2018.
dominance is declining. U.S. motor vehicle imports
from South Africa have fallen $1.6 billion from their
What is the authorization status? AGOA was first
2013 peak to $572 million in 2018. Kenya, Lesotho,
established by Congress in 2000 and has been amended
Madagascar, Ethiopia, and Mauritius are the other top
several times. The Trade Preferences Extension Act of
non-energy beneficiaries, exporting mostly apparel
2015, P.L. 114-27, extended AGOA’s authorization for ten
products. Together with South Africa these countries
years to September 2025. In April 2018, Congress passed
accounted for 91% of all non-energy imports in 2018.
the AGOA and Millennium Challenge Act Modernization
Figure 1. U.S. Non-Energy AGOA Imports by Country
Act, P.L. 115-167, which requires the Administration to
increase transparency, including through an official AGOA
($ in millions, 2018)
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.
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.
Supporting Views—Supporters of AGOA argue that the
Source: Analysis by CRS. Data from USITC.
program affords African producers an important
Note: Non-energy refers to al goods except HTS Chapter 27.
competitive advantage in the U.S. market, thereby enabling
exports, encouraging investment in the region, boosting
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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 most recent report was published in
Generalized System of Preferences (GSP) is another U.S.
June 2018 and is available on the USTR website.
trade preference program, but unlike AGOA, GSP is not
Reciprocal Trade Negotiations—Congress has directed
regionally based. The AGOA preferences include all
the Administration to seek reciprocal trade and investment
products covered by GSP, as well as some products
negotiations with AGOA countries since 2000. Free trade
excluded from GSP, such as autos and certain types of
agreement (FTA) negotiations were initiated with the South
textiles and apparel. In both GSP and AGOA, additional
African Customs Union (SACU), but were suspended in
benefits are granted to least-developed countries. Congress
2006 due to divergent views over the scope of talks. U.S.
has historically granted GSP shorter authorization periods
FTAs typically include comprehensive tariff elimination as
than AGOA. GSP is currently authorized through 2020.
well as enforceable commitments on services, investment,
Apparel and Third-Country Fabric Provision—AGOA’s
intellectual property rights, labor, and environment. The
duty-free treatment of certain apparel products is significant
Trump Administration wants to negotiate a new “model”
because (1) apparel articles face relatively high U.S. import
bilateral FTA with an African country, but has not specified
tariffs; (2) they are generally excluded from GSP; (3) they
countries of focus or how a new model FTA may differ
can be readily manufactured in developing countries as
from previous U.S. FTAs. Press reports following the 2018
their production requires less skilled labor and capital
AGOA Forum suggested many African countries prefer a
investment; and (4) production in this sector can be a first-
regional approach to U.S. FTA negotiations, in contrast to
step toward higher value-added manufacturing. The third
the Administration’s preference for bilateral talks.
country fabric provision in AGOA, which is a major factor
in AGOA countries’ competitiveness in the sector, allows
. .establishing a more stable, permanent, and mutually
limited amounts of U.S. apparel imports from least-
beneficial trade and investment framework with the United
developed sub-Saharan African countries to qualify for
States could be transformative for Africa.
duty-free treatment even if the yarns and fabrics used in
USTR Robert Lighthizer, July 7, 2018
their production are imported from non-AGOA countries
(e.g., apparel assembled in Kenya with Chinese fabrics can
Issues for Congress
qualify for duty-free treatment under AGOA when
AGOA generally enjoys bipartisan support in Congress and
imported into the United States).
is not subject to reauthorization until 2025. Current issues
Trade Capacity Building (TCB)—AGOA also directs the
Congress may consider include the following:
President to provide TCB to AGOA beneficiaries. This
Trump Administration Tariffs. The Trump
assistance aims to encourage governments to (1) liberalize
Administration has imposed increased tariffs on steel
trade policy; (2) harmonize laws and regulations with WTO
and aluminum and potentially motor vehicles under
membership commitments; (3) engage in financial and
Section 232 of the Trade Expansion Act of 1962 due to
fiscal restructuring; and (4) promote greater agribusiness
national security concerns. South Africa is a significant
linkages. The U.S. Agency for International Development
U.S. supplier of aluminum and motor vehicles. Congress
(USAID) administers certain TCB-related projects in
may examine the effect of these existing and proposed
support of AGOA, including funding three African Trade
tariffs on AGOA participants and objectives.
and Investment Hubs, which work to increase AGOA
utilization by beneficiary countries and facilitate regional
Third-Party Agreements. Reciprocal agreements
producers’ access to international markets. AGOA also
between AGOA beneficiaries and third parties (e.g., EU-
directs the Overseas Private Investment Corporation
South Africa) may disadvantage U.S. exporters.
(OPIC), Export-Import Bank, U.S. Foreign Commercial
Potential U.S. responses include FTA negotiations, other
Service, and USDA on expansion of their activities in sub-
less extensive reciprocal U.S. agreements, and removal
Saharan Africa, including personnel requirements.
of AGOA eligibility. The African Continental Free
Trade Area, signed by 54 countries, has officially
AGOA Forum—AGOA requires the President to convene
launched, though tariff reductions have yet to be
an annual forum to discuss trade and investment relations
implemented. Congress may examine how new potential
and implementation of AGOA, which typically alternates
U.S. FTAs may affect these regional integration efforts.
between Washington, DC, and an AGOA country. The 18th
Beneficiary Country Participation. More than 90% of
AGOA Forum is to take place in Abidjan, Cote d‘Ivoire, in
U.S. non-energy imports under AGOA come from six
early August 2019.
countries. Congress may examine factors affecting other
Country Eligibility Reviews—The President 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,
cycle reviews (outside the annual review period) in
IF10149
response to public petitions. The Administration may
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African Growth and Opportunity Act (AGOA)
Disclaimer
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https://crsreports.congress.gov | IF10149 · VERSION 10 · UPDATED