USTR AGOA Report Lays Out Path to Renewed Eligibility for Swaziland, DR Congo
The Office of the U.S. Trade Representative suggested it could consider reaccepting Swaziland and the Democratic Republic of the Congo as beneficiaries under the African Growth and Opportunity Act (AGOA) if the countries make certain political reforms. Congo’s eligibility will largely depend on whether its 2016 presidential election is “free and fair,” while the U.S. is withholding benefits from Swaziland pending satisfaction of U.S. calls to protect freedom of speech and amend anti-terrorism legislation that currently functions to suppress political dissent, USTR indicated in its first biennial report of AGOA implementation required by the Trade Preferences Extension Act of 2015 (here). Notably, the report did not say how the nine other sub-Saharan countries ineligible for AGOA might regain tariff preferences.
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Sub-Saharan AGOA- and Generalized System of Preferences-related exports to the U.S. rose from $8.2 billion in 2001 to $66.3 billion in 2008, but dipped back to $9.3 billion in 2015, mostly because of the Great Recession and decreasing oil exports. Crude oil, precious metals and auto products were still among the top overall U.S. imports from the region in 2015, USTR said. On the other hand, total U.S. exports to sub-Saharan Africa hit $17.8 billion last year, the top products being machinery, aircraft, vehicles, mineral fuels and cereal. USTR lamented a patchwork of biosafety laws throughout Africa that the agency said have dampened trade.
While most sub-Saharan countries have recently opted to embark on securing AGOA renewal -- enacted last year -- instead of negotiating free-trade agreements with the U.S., Kenya and Mauritius have expressed interest in such actions. Kenya advocated for a “free trade status” designation from the U.S., expressing hope that, once completed, the Tripartite and Continental free-trade areas could accede to and help strengthen any emergent pact. Key considerations for any FTA with sub-Saharan nations include whether to negotiate with regional economic communities or their individual members, USTR said. “There may be many different options for engaging countries that are at different levels of capacity and willingness,” the report says. “For the most forward leaning countries, for example, comprehensive, high-standard free trade agreements may be possible in the relative short term. For others, a more incremental approach may be needed.”