April 26, 2019 DCCI Team

Did You Know? AGOA

Did you know? AGOA

A brief discussion about the AGOA trade agreement and what it means for the U.S.

What is AGOA?

The African Growth and Opportunity Act (AGOA) is a preferential trade program meant to establish closer ties between the United States and selected countries in Sub-Saharan Africa. Initially approved for fifteen years under President Clinton on May 18, 2000, it was extended for another ten years in 2015 with an end-date for 2025. AGOA marked a fundamental shift in the US policy towards Sub-Saharan Africa as it was previously defined by ‘‘Cold war calculations, donor-recipient relations, aid for poverty alleviation and emergency relief’’.

How does it work?

As a form of economic integration, AGOA is a trade pact that reduces the import tariffs on certain products from countries who are parties to the program. It does not absolutely cancel out tariffs. The AGOA legislation is unilateral and non-reciprocal. This means that trade preferences relate only to the opening of US markets to the qualifying countries. In order to qualify for the AGOA program, countries are required to meet a number of conditions on an ongoing basis. Where such requirements are not met, the country’s preferential access can be suspended.

What does it cover?

AGOA covers more than 6,000 products using the HTS-8 Tariff Classification. The HTS refers to the U.S. Harmonised Tariff System that is based on the internationally standardized Harmonized Commodity Description and Coding System managed by the World Customs Organization.

Where does it stands today?

Despite increasing AGOA imports totalling $13.8 billion in 2017, many challenges still plague the program. Many local traders and officials cite the following: long and complicated process making it difficult for artisan groups and small traders to join the program, communication issues due to language barriers, low soft and enabling infrastructure.

To learn more about your organization can take advantage of AGOA, email International Trade and Development at info@dcconsultintl.com.

Curated by Editor in Chief @neneananaba

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DCCI Team

DC Consult International is a business consulting firm specializing in mediation and negotiations, business advisory, emerging markets, and myriads of other consulting services.

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