UN Division for Sustainable Development

Case Study Detail Record

Organization type:	Government

Name of Ministry/Agency:	Department of State

Country:	United States of America

Name of Focal Point:	Hiram Larew

Initiative Title:	Expanding Trade Opportunities and Building Prosperity in Africa

Internet links:	http://www.agoa.gov/index.html

Scope:	Regional: - Africa

Status:	Ongoing

Timeframe:	Start: End:

Lead Institution:	U.S. Government

Stakeholders/Partners:	Sub-Saharan African exporters.

Relevent issues:	- Poverty reduction strategies and policies - Reducing rural poverty - Empowering the poor, including women and indigenous people

Objectives/Challenges:

Signed into law in May 2000, the U.S. African Growth and Opportunity Act (AGOA) legislates reduced barriers to trade, increasing exports, creating jobs, and expanding opportunity for sub-Saharan African countries.
AGOA provides trade preferences to countries that are making progress in economic, legal, and human rights reforms. Targets include establishing market-based economies, the rule of law and political pluralism, eliminating barriers to U.S. trade and investment, protecting intellectual property, combating corruption, developing policies to reduce poverty, increasing the availability of health care and educational opportunities, protecting human rights and worker rights, and eradicating certain child labor practices.

Under AGOA, eligible countries can export almost any product to the United States duty-free – nearly 6,500 items, ranging from apparel to automobiles and footwear to fruit. AGOA also provides a framework for technical assistance to help countries take advantage of the trade preferences. Currently, 39 AGOA-eligible countries can take advantage of duty-free access for yarns, textiles apparel and other products exported to the U.S. market.

Lessons Learned:

While the absence of import duties under AGOA increases the competitiveness of African exports, certain factors like inefficient energy supplies, the high cost of electricity and limited access to financial services remain obstacles to full competitiveness. These constraints must be addressed to achieve long-term productivity gains, and to ensure that for sub-Saharan African countries remain competitive in global markets.

Summary:

Key Results: AGOA has motivated substantial new investments, trade, and job creation in Africa. It has also helped promote sub-Saharan Africa's integration into the multilateral trading system and a more active role in global trade negotiations. Finally, AGOA has contributed to economic and commercial reforms that make African countries more attractive commercial partners for U.S. companies. Since 2000, AGOA has helped increase two-way trade between the U.S. and sub-Saharan Africa.

• In 2006, U.S. total exports to sub-Saharan Africa rose by 17 percent over 2005, to $12.1 billion. U.S. total imports from Africa increased by 17 percent to $59.2 billion.

• In 2006, over 98 percent of U.S. imports from AGOA-eligible countries entered the United States duty-free; these imports totaled $44.2 billion. While increases in U.S. imports have been largely oil, non-oil AGOA trade has also increased, notably in footwear, fruits, nuts, prepared vegetables, and cut flowers.

Next Steps: The U.S. African Global Competitiveness Initiative, a $200 million, five-year Presidential Initiative, will support AGOA by helping to eradicate the obstacles to export competitiveness. This includes increasing access to financial services, improving the cost and availability of energy, streamlining customs procedures and productions practices, and advancing the market knowledge and skills of private enterprises.