On Jan. 17, 2018, the House of Representatives passed H.R. 3445, the AGOA and MCA Modernization Act. The legislation adds on to the original African Growth and Opportunity Act, or AGOA, which was passed into law on May 18, 2000, by the 106th Congress.
As an extension of AGOA, the AGOA and MCA Modernization Act encourages plans to promote trade and cooperation while also providing aid to countries that are AGOA eligible. The region of focus of the legislation is sub-Saharan Africa, with the goal being to build private sector growth. Under the bill, the President will be directed to create a website with information about AGOA along with encouraging embassies in chosen countries to promote export opportunities to the United States.
In addition, the bill would give the Millennial Challenge Corporation (MCC) the authority to develop a second concurrent compact with countries, provided the compact focuses on regional economic development. The ability to enter into a second compact will be limited to countries that demonstrate progress toward meeting the objectives of the first compact and capacity to handle an additional compact.
The MCC was created in 2004 by the Bush administration, with the aim to reduce poverty through economic growth. The MCC has committed more than $10 billion in 58 projects in 25 countries. Around 70 percent of this investment has gone into infrastructure projects like highways and ports and an increasing percentage is being invested in energy.
On the House floor prior to the vote, House Foreign Affairs Committee Chairman Rep. Ed Royce (R-CA-39) said that the AGOA and MCA Modernization Act “seeks to facilitate trade and private sector-led growth in poor but relatively well-governed countries, particularly in Africa, so they can grow their own way out of poverty.”
“Through AGOA, goods produced in eligible African countries enter the U.S. on a duty-free basis. To be eligible, countries must be committed to the rule of law, eliminating barriers to U.S. trade and investment, combating corruption and supporting counterterrorism activities. So AGOA advances U.S. interests on many levels.”
Trade being a driver of economic development and increased civilian participation in politics is one of the main arguments for passing the AGOA and MCA Modernization Act. Economists and experts agree that the legislation does not just benefit sub-Saharan Africa, but also the United States, as it helps create jobs and benefits consumers and companies through free-market principles.
Rep. Karen Bass (D-CA-37) was enthusiastic about the passage of the AGOA and MCA Modernization Act by a unanimous vote. Bass is a ranking member of the House Africa Subcommittee. She is an avid supporter of the legislation and said the policy would foster economic development, as well as strengthen the United States as an international leader and boost the domestic job market and economy.
The bill was introduced to the House by Rep. Royce. At the time the bill was initially introduced, Rep. Royce along with fellow representatives Bass, Eliot Engel (D-NY) and Chris Smith (R-NJ), stated that steering developing countries toward trade and away from aid helps African countries and women. Africa’s consumer spending nearing $1 trillion was what prompted the four to push for the passing of the AGOA and MCA Modernization Act.
The AGOA and MCA Modernization Act still needs to be approved by the Senate. The bill has been introduced by Sens. Ben Cardin (D-MD), Johnny Isakson (R-GA) and Chris Coons (D-DE) as S.832. Sen. Coons stated that it is vital that Congress does all it can do to promote economic growth in developing countries and expand American business access to foreign markets. He is excited that the act will encourage trade with sub-Saharan Africa.
The recent passing of the AGOA and MCA Modernization Act in the House may give the legislation the momentum it needs to soon be accepted in the Senate. Visit The Borgen Project Action Center to contact your representative about this critical legislation.
– Blake Chambers
Photo: Wikimedia Commons