AGOA’s Ticking Clock
As the expiration date for the African Growth and Opportunity Act (AGOA) of 2000 approaches in September, members of Congress are calling for a rapid-fire renewal process to protect the work that AGOA has accomplished so far.
Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Ranking Member Senator Ron Wyden (D-Ore.), and House Ways and Means Committee Chairman Paul Ryan (R-Wisc.) and Sander Levin (D-Mich.) have introduced The AGOA Extension and Enhancement Act of 2015 that will renew the act for ten years.
Originally signed into law in May of 2000, the AGOA was a bipartisan initiative intended to strengthen economic relations between the United States and Africa. By creating trade preferences for African products that allowed for duty-free entry into the United States, the AGOA sought to provide an exclusive economic partnership with budding African industries and American consumers. The Brookings Institution, a Washington, DC-based think tank, estimates that the AGOA has created several hundred thousand direct s in Africa—particularly in textiles.
Under the agreement, eligible African nations would receive “unlimited duty free and quota free access to the U.S. market for apparel made in Africa from U.S. fabric and U.S. thread.” Several African nations saw unprecedented growth in exports to the United States. For example, Kenya saw a 1,375% increase in exports to the U.S. between 2000 and 2001.
“The legislation [AGOA] has helped transform the economic landscape for Sub-Saharan Africa by stimulating new trade opportunities for African and Americans businesses, creating new jobs, and investments worth hundreds of millions of dollars,” wrote a U.S. Administration 2002 report.
The AGOA was initially set to expire in 2008 until a new round of legislation pushed the expiration date back to September 2015.
In addition to the African jobs created by the AGOA, there are many American jobs dependent on the trade network that this legislation has formed. The United States Trade Representative has estimated that exports to Africa are responsible for more than 120,000 American jobs. The AGOA has provided a level of security that have lead to a four-fold increase in exports to Africa—something that helped to pay thousands of salaries stateside.
“This legislation will promote American trade and strengthen our economic ties with important countries,” said Sen. Paul Ryan in April. “It will encourage our friends in Africa and Haiti to pursue free enterprise and solidify the rule of law. This legislation demonstrates that more trade can create opportunity at home and promote our economic values abroad.”
Brookings has argued that uncertainty over the act’s renewal could halt the progress made so far by the AGOA. Without the stability of the legislation, textile factories are less likely to receive orders in enough time to produce clothing for a new season of shopping. In the void left by the AGOA, competing manufacturers like China will be eager to step in and soak up the businesses that were once protected by the AGOA.
– Emma Betuel
