Obama Administration Wants Africa Trade Act Extended to 2025

The Obama administration wants to reauthorize the African Growth and Opportunity Act (AGOA), which is set to expire in 2015, through 2025, Assistant Secretary of State for African Affairs Johnnie Carson says, citing the measure’s success in enhancing trade levels between the United States and the African continent.

Speaking at the Center for Strategic and International Studies in Washington May 13, Carson said AGOA “remains the centerpiece of our trade and investment policy with Africa,” and has “made progress in creating jobs, spurring economic growth and facilitating a dialogue on key economic and political challenges” since the legislation took effect in 2000.

In 2000, U.S. exports to Africa were valued at $5.9 billion and its imports totaled $23.4 billion. Thanks to AGOA, those levels rose to $17.1 billion in exports and $64.3 billion in African imports in 2010, Carson said. But, he added, neither the United States nor African nations should “become complacent” about the increase in trade and economic opportunities over the past 10 years.

“Africa still faces huge challenges and we need to continue and revitalize our economic partnership,” he said. The region “has not experienced a genuine economic revolution.”

The continent also continues to struggle to compete in an increasingly competitive global economy. “For these reasons I am fully committed to revitalizing AGOA,” Carson said.

The annual AGOA Forum is scheduled to take place June 8-10 in Zambia, with Secretary of State Hillary Rodham Clinton, U.S. Trade Representative Ron Kirk and other senior U.S. officials in attendance.

Carson praised the Zambian government’s planning of the event and said he expects “a dynamic forum” with a strong turnout from African government officials, civil society and the private sector.

The assistant secretary said the United States also wants to extend AGOA’s Third Country Multi-Fiber provision through 2022. That provision allows AGOA member states to obtain their raw materials from other countries while maintaining preferred access to the U.S. market. He also said the administration wants to add South Africa to the provision.

A major goal for the United States is helping U.S. importers of African products increase their tax savings by eliminating the U.S. tax on repatriated revenues levied on American companies that invest in African factories that produce AGOA exports to the United States.

AGOA “At the heart” of U.S. Africa Policy

In prepared remarks at the same event, Deputy U.S. Trade Representative Demetrios Marantis said AGOA is “at the heart of our Africa policy,” and it has defined the U.S. trade relationship with the continent for three presidential administrations.

“In the same way that the United States uses trade to increase exports, grow our economy and support jobs here at home, our Africa trade policy helps Africans grow their economies and create jobs through exports,” he said.

But because many studies show that African economies continue to face constraints, a lack of trade capacity, or are “otherwise insufficiently competitive to take advantage of export opportunities,” the Obama administration is asking “tough questions” about the impediments to Africa’s continued economic growth, he said.

Marantis cited reports of bribes and unnecessary checkpoints within and between countries in West Africa as well as poor infrastructure and customs delays that hurt African agriculture exports.

“These are real problems that hurt Africa’s competitiveness. And these problems mean that much of AGOA’s potential remains untapped,” he said.

The Obama administration is intent on finding the “right, informed answers” behind the constraints to African economic growth, and those answers “will shape the future of our Africa trade and investment policy and anchor our ties to this important part of the world,” Marantis said.