April 22, 2015
African Growth and Opportunity Act (AGOA)
What is AGOA? AGOA, a cornerstone of U.S. trade
policy toward sub-Saharan Africa since 2000, is a nonreciprocal U.S. trade preference program that provides
duty-free access to the U.S. market for most exports from
eligible sub-Saharan African countries. In addition to
preferential market access, the Act also requires an annual
forum, known as the AGOA Forum, held between U.S. and
AGOA country officials to discuss trade-related issues.
Additionally, AGOA provides direction to select U.S.
government agencies regarding their trade and investment
support activities in the region.
What countries are eligible? AGOA lists 49 sub-Saharan
African countries that are potential candidates for AGOA
benefits. AGOA eligibility criteria address issues such as
trade and investment policy, governance, worker rights, and
human rights, among other issues, which countries must
satisfy to be beneficiaries of the AGOA preferences. The
President annually reviews and determines each country’s
AGOA eligibility. There are currently 39 AGOA-eligible
countries, including Madagascar and Guinea-Bissau, whose
AGOA benefits were reinstated in 2014. Benefits were
removed for South Sudan, Swaziland, and the Gambia on
January 1, 2015, due to worker and human rights violations.
What is the authorization status? The AGOA preference
program was initially enacted in 2000. It has been amended
five times, including one overall extension in 2004, as well
as technical modifications and extensions of time-limited
provisions (e.g., third-country fabric provision). AGOA
authorization is currently set to expire on September 30,
What’s 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.
[T]o keep our trade growing, we need to renew
AGOA. But we’ve also got to make some decisions
about how we can make it more effective. President
Obama, July 1, 2013.
Supporting Views—Supporters of AGOA argue that the
program affords African producers a vital competitive
advantage in the U.S. market, thereby enabling exports,
encouraging investment in the region, boosting private
sector activity and economic growth, and ultimately
generating demand for U.S. goods and services as the
region’s economies develop.
Opposing Views—Opposition to AGOA comes primarily
from U.S. producers that may face increased import
competition from AGOA countries. Due to the relatively
small level of U.S. imports under the program, such
concerns may be relatively limited. Many observers are
generally supportive of AGOA, but would like reforms.
Key Aspects of AGOA
Trade Preferences—The primary component of AGOA is
the duty-free treatment of U.S. imports of certain products
from beneficiary countries. This tariff savings can
potentially help AGOA exporters compete with lower-cost
producers in other countries.
Relation to the Generalized System of Preferences—The
Generalized System of Preferences (GSP) is another U.S.
preference program, but unlike AGOA, GSP is not
regionally based. The AGOA preferences include all
products covered by GSP, as well as some products
excluded from GSP, such as autos and certain types of
textiles and apparel. In both GSP and AGOA, additional
benefits are granted to least-developed countries.
Apparel and Third-Country Fabric Provision—AGOA’s
duty-free treatment of certain apparel products is significant
because (1) apparel articles face relatively high U.S. import
tariffs; (2) they are excluded from GSP; (3) they can be
manufactured in developing countries as their production
utilizes lower-skilled labor and requires little capital
investment; and (4) production in this sector can be a firststep toward higher value-added manufacturing. The thirdcountry fabric provision in AGOA, which some argue is
critical to AGOA countries’ competitiveness in the sector,
allows some U.S. apparel imports from least-developed
sub-Saharan African countries to qualify for duty-free
treatment even if the yarns and fabrics used in their
production are imported from non-AGOA countries.
Trade Capacity Building—Unlike other U.S. preference
programs, AGOA directs the President to provide U.S.
government technical assistance and trade capacity building
(TCB) in AGOA beneficiary countries. This assistance aims
to encourage governments to (1) liberalize trade policy; (2)
harmonize laws and regulations with WTO membership
commitments; (3) engage in financial and fiscal
restructuring; and (4) promote greater agribusiness
linkages. The United States Agency for International
Development (USAID) administers certain TCB-related
projects in support of AGOA, including funding for the
three African Trade Hubs, which work to increase AGOA
utilization by beneficiary countries.
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
the South African Customs Union (SACU), but were
eventually suspended in 2006. Until the provision expired
in 2008, AGOA also required the President to report
annually to Congress on U.S. trade and investment policy
toward sub-Saharan Africa and AGOA implementation.
AGOA also directs the Overseas Private Investment
Corporation (OPIC), Export-Import Bank, and U.S. Foreign
Commercial Service to expand their activities in subSaharan Africa.
AGOA Forum—AGOA requires the President to convene
an annual forum to discuss expanding trade and investment
relations and the implementation of AGOA. The 13th
AGOA Forum took place in Washington D.C. on August 4,
2014, in conjunction with the larger U.S.-Africa Leaders
Summit, and focused on AGOA’s potential renewal.
Utilization of benefits— In 2014, over 70% of U.S. nonenergy imports under AGOA came from South Africa, and
AGOA exports were less than $1 million for the majority of
countries. Some view AGOA country export strategies and
greater targeting of TCB toward potentially competitive
industries as important to increase use of the program.
U.S. Imports Under AGOA
U.S. non-energy imports under AGOA have grown from
$1.3 billion in 2001 to $4.4 billion in 2014, but they remain
highly concentrated in select countries and industries.
• U.S. imports under AGOA were $14.2 billion in 2013.
• Crude oil accounted for 68% of U.S. AGOA imports,
but crude imports have declined by more than $40
billion since 2011, largely due to U.S. production.
Angola, Nigeria, Chad, Gabon, and Republic of Congo
are the major oil exporters under AGOA.
• Non-energy imports (excluding crude and refined
petroleum products) were $4.4 billion, with much of this
coming from South Africa ($3.1 billion, with $1.3
billion in South African autos alone). Other top products
were apparel and metals.
• Aside from South Africa and the oil producers, Kenya,
Lesotho, and Mauritius, which export mostly apparel
products, are the top users of the preference program.
Together with South Africa these countries accounted
for 92% of all U.S. non-energy imports under AGOA in
Figure 1. U.S. Non-Energy Imports Under AGOA
($ in millions 2014)
Product coverage—AGOA covers most products, but
some, mostly agricultural products, remain excluded.
Including more products under AGOA may increase use of
AGOA benefits, but may be opposed by U.S. producers.
Trade capacity building funding—Many supporters argue
that AGOA may be underutilized due to beneficiary
countries’ inability to take advantage of AGOA benefits.
Although AGOA mandates that TCB assistance be
provided to increase program use, there is debate over the
types and levels of TCB and its effectiveness.
Duty-free, quota-free beyond Africa—Some argue that
all least-developed countries, including non-African ones,
should receive AGOA preferences, but others are concerned
that this could erode the competitiveness of African exports
to the United States, due to greater competition.
Reciprocal access and two-way trade—There is a greater
push for reciprocal trade agreements with some AGOAeligible countries, particularly those that have already
negotiated reciprocal agreements with other parties. Such
agreements, like that between South Africa and the
European Union, could disadvantage U.S. exports to Africa.
Trade disputes and poultry exports—Some Members of
Congress have expressed concern over antidumping duties
placed on U.S. poultry exports to South Africa, suggesting
South Africa’s AGOA benefits be removed if the situation
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.
1009, have been introduced. Among other aims, they would
renew all components of the program for 10 years, modify
the process of terminating or suspending preferential
treatment, allow direct processing costs to count toward a
product’s required regional value content, encourage the
creation of country-specific AGOA strategies and the
negotiation of FTAs, and require additional reporting.
Country eligibility and reauthorization—Many views
exist regarding the appropriate scope of AGOA eligibility
criteria and the length of AGOA authorization. Some
stakeholders support less stringent eligibility requirements,
less frequent reviews, and a longer or indefinite
reauthorization period, while others argue that shorter
authorization terms allow for greater congressional
oversight and that strong eligibility requirements and
annual reviews encourage needed domestic reforms.
Source: Analysis by CRS. Data from USITC.
Notes: Non-energy refers to all goods except HTS Chapter 27.
For more information, see CRS Report R43173, African
Growth and Opportunity Act (AGOA): Background and
Brock R. Williams, firstname.lastname@example.org, 7-1157
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