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Updated May 3, 2021
African Growth and Opportunity Act (AGOA)
Overview
product diversification, and regional cooperation, and
What is AGOA? AGOA (P.L. 106-200, as amended), a
educate African entrepreneurs.
cornerstone of U.S. trade policy toward sub-Saharan Africa
What is the goal? Through AGOA, the U.S. Congress
since 2000, is a nonreciprocal U.S. trade preference
seeks to increase U.S. trade and investment with the region,
program that provides duty-free access to the U.S. market
promote sustainable economic growth through trade, and
for most exports from eligible sub-Saharan African
encourage the rule of law and market-oriented reforms.
countries. In addition to preferential market access, the act
also requires an annual forum, known as the AGOA forum,
Supporting views. Supporters of AGOA argue that the
held between U.S. and AGOA country officials to discuss
program affords African producers an important
trade-related issues. Additionally, AGOA provides
competitive advantage in the U.S. market, thereby enabling
direction to select U.S. government agencies regarding their
exports, encouraging investment in the region, boosting
trade and investment support activities in the region.
private sector activity and economic growth, and ultimately
generating demand for U.S. goods and services as the
Which countries are eligible? AGOA lists 49 sub-Saharan
region’s economies develop.
African countries that are potential candidates for program
benefits. AGOA eligibility criteria address issues such as
Opposing views. Opposition is mostly from U.S. producers
trade and investment policy, governance, worker rights, and
that may face increased import competition from AGOA
human rights, among other issues, which countries must
countries. Such concerns are generally limited due to the
satisfy to be beneficiaries of the AGOA preferences. The
low volume of U.S. imports under AGOA, but import
President annually reviews and determines each country’s
competing U.S. producers have lobbied to keep certain
AGOA eligibility. There are currently 39 AGOA-eligible
products, particularly sugar, out of the program.
countries. In the most recent eligibility determination,
U.S. Imports under AGOA
President Trump reinstated AGOA benefits for the
Democratic Republic of the Congo (DRC), effective
Total U.S. AGOA imports were $4.1 billion in 2020, down
January 1, 2021. The Trump Administration also initiated a
50% from $8.4 billion in 2019, due mostly to a decline in
review of South Africa’s eligibility under the Generalized
oil imports. Imports remain concentrated in few countries
System of Preferences (GSP) due to concerns over its
and industries, but diversification has grown.
protection of intellectual property rights, which has
Energy product imports (crude oil) declined by 85% in
potential implications for South Africa’s AGOA eligibility
2020 to $695 million, and accounted for only 17% of
as AGOA builds on GSP and requires that beneficiary
AGOA imports. This represents a significant shift, as
countries satisfy both programs’ eligibility criteria (see
crude oil has historically accounted for the vast majority
“Relation to GSP” below).
of AGOA imports (e.g., $48 billion at their 2011 peak).
Ten sub-Saharan African countries remain ineligible for the
Nigeria was the top supplier ($461 million) in 2020.
program’s preference benefits in 2021. They include (with
AGOA non-energy imports declined by 9% in 2020 to
noted eligibility violations): Burundi (political violence),
$3.4 billion, but have tripled since the program began in
Cameroon (human rights), Equatorial Guinea (income
2001. Top non-energy import categories include textiles
graduation), Eritrea (human rights), Mauritania (worker
and apparel ($1.2 billion), transportation equipment
rights), Seychelles (income graduation), Somalia (never
($652 million), ag products ($626 million), minerals and
eligible), South Sudan (political violence), Sudan (never
metals ($332 million), and chemicals ($329 million).
eligible), and Zimbabwe (never eligible). In addition,
South Africa is the top supplier of AGOA non-energy
Rwanda’s AGOA benefits for apparel exports have been
imports (Figure 1), but its dominance has declined.
suspended since July 31, 2018, following an out-of-cycle
Decreasing auto imports from South Africa and
eligibility determination in response to increased tariff
increasing apparel imports from other top countries are
barriers on used clothing imports from the United States.
the main trends underlying this shift.
What is the authorization status? AGOA was first
established by Congress in 2000 and has been amended
several times. The Trade Preferences Extension Act of
2015, P.L. 114-27, extended AGOA’s authorization for ten
years to September 2025. The African Growth and
Opportunity Act and Millennium Challenge Act
Modernization Act of 2018, P.L. 115-167, required the
Administration to provide information on AGOA through
an official AGOA website, promote AGOA utilization,
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African Grow th and Opportunity Act (AGOA)
Figure 1.Top AGOA Countries, Non-Energy Products
between the United States and an AGOA country, but was
cancelled in 2020 due to the pandemic.
Country eligibility reviews. The President determines
eligibility based on statutory criteria. The process includes
an annual public comment period and hearing, and, as
amended by the 2015 reauthorization, allows for out-of-
cycle reviews (outside the annual review period) in
response to public petitions. The Administration may
remove country eligibility entirely or for specific products,
but must notify Congress 60 days before any termination.
Reporting requirements. The 2015 reauthorization
Source: Analysis by CRS. Data from USITC.
reinstated a previous AGOA requirement to report
biennially on overall U.S. trade and investment relations
Key Aspects of AGOA
with the region. USTR issued the latest report in 2020.
Trade preferences. AGOA’s main component is duty-free
Reciprocal trade negotiations. Since 2000, Congress has
treatment of U.S. imports of certain products from
directed the executive branch to seek reciprocal trade and
beneficiary countries. This tariff savings can help AGOA
investment negotiations with AGOA countries. The first
exporters compete with lower-cost producers elsewhere.
attempt, with the Southern African Customs Union
Relation to GSP. The Generalized System of Preferences
(SACU), was suspended in 2006 due to divergent views
(GSP) is another U.S. trade preference program, but unlike
over scope. In a new effort, the Trump Administration
AGOA, GSP is not regionally based. The AGOA
began free trade agreement (FTA) negotiations with Kenya
preferences include all products covered by GSP, as well as
in 2020, which the Biden Administration has not resumed
some products excluded from GSP, such as autos and
to date. Then-USTR Lighthizer described the talks as an
opportunity to negotiate a new “model” bilateral FTA with
certain types of textiles and apparel. To remain eligible for
AGOA, sub-Saharan African countries must meet the
an African country, but did not specify in what ways the
eligibility requirements for both programs (19 U.S.C.
new approach would differ from past negotiations. U.S.
§2466). Both GSP and AGOA grant additional benefits to
FTAs typically include comprehensive tariff elimination as
least-developed countries. AGOA beneficiaries maintain
well as enforceable commitments on services, investment,
access to both programs, even when GSP authorization
intellectual property rights, labor, and environment.
lapses, which occurred on January 1, 2021.
President Uhuru Muigai Kenyatta of Kenya argues that a
bilateral U.S. FTA will not hinder Kenya’s participation in
Apparel and third-country fabric provision. AGOA’s
broader regional integration initiatives, but some African
duty-free treatment of certain apparel products is significant
officials express reservations over the bilateral approach.
because (1) apparel articles face relatively high U.S. import
tariffs; (2) they are generally excluded from GSP; (3) they
FTAs hold the promise of transformative change in ways
can be readily manufactured in developing countries as
that are not possible through [. .] preference programs.
their production requires less skilled labor and capital
investment; and (4) production in this sector can be a first-
2020 Biennial Report on AGOA Implementation
step toward higher value-added manufacturing. The third
country fabric provision in AGOA, which is a major factor
Issues for Congress
in AGOA countries’ competitiveness in the sector, allows
AGOA generally enjoys bipartisan support in Congress and
limited amounts of U.S. apparel imports from least-
developed sub-Saharan African countries to qualify for
is not subject to reauthorization until 2025. Current issues
Congress may consider include the following:
duty-free treatment even if the yarns and fabrics used in
their production are imported from non-AGOA countries
FTA negotiations. An FTA would have implications
(e.g., apparel assembled in Kenya with Chinese fabrics can
for AGOA and U.S. trade relations in the region. As the
qualify for duty-free treatment under AGOA).
Biden Administration sets its FTA negotiating priorities
for the region in consultation with Congress, including
Trade capacity building (TCB). AGOA also directs the
President to provide TCB to AGOA beneficiaries. The U.S.
on whether to resume bilateral talks with Kenya, key
considerations include (1) what flexibilities (e.g., longer
Agency for International Development (USAID)
phase in periods, less extensive commitments, greater
administers certain TCB-related projects in support of
technical assistance, or flexible rules of origin such as
AGOA, including funding three African Trade and
Investment Hubs, which work to increase AGOA utilization
an AGOA style third-country fabric rule) are
appropriate; (2) effects on broader AGOA utilization;
and regional producers’ access to international markets .
and (3) effects on regional initiatives, such as the
AGOA also directs other agencies, including the Export-
African Continental Free Trade Area (AfCFTA).
Import Bank, U.S. Foreign Commercial Service, and
USDA, on their activities in sub-Saharan Africa.
Increased U.S. tariffs. The Trump Administration
imposed tariff increases (Section 232) on steel and
AGOA forum. AGOA requires the President annually to
aluminum, which raise the cost of imports from AGOA
convene a forum on trade and investment relations, and
countries, notably South Africa, a top U.S. supplier of
AGOA implementation. The forum typically alternates
aluminum. The tariffs remain in place unless the Biden
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African Grow th and Opportunity Act (AGOA)
Administration or Congress (through legislation)
Beneficiary country participation. Nearly 90% of U.S.
removes or amends them. Congress may examine the
non-energy imports under AGOA in 2020 came from
tariffs’ effects on AGOA participants and their
five countries. Congress may examine factors affecting
alignment with congressional goals .
other countries’ capacity to export under AGOA.
Third-party agreements. Reciprocal agreements
Brock R. Williams, Specialist in International Trade and
between AGOA beneficiaries and third parties (e.g.,
Finance
EU-South Africa) may disadvantage U.S. exporters.
Congress may examine possible U.S. responses.
IF10149
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https://crsreports.congress.gov | IF10149 · VERSION 15 · UPDATED