THE AFRICAN GROWTH AND OPPORTUNITY ACT (AGOA)
BACKGROUND
The African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000 as Title
1 of The Trade and Development Act of 2000. The Act offers tangible incentives for African
countries to continue their efforts to open their economies and build free markets. President
Bush signed amendments to AGOA, also known as AGOA II, into law on August 6, 2002 as
Sec. 3108 of the Trade Act of 2002. AGOA II substantially expands preferential access for
imports from beneficiary Sub-Saharan African countries.
AGOA provides reforming African countries with the most liberal access to the U.S. market
available to any country or region with which the United States does not have a Free Trade
Agreement. It supports U.S. business by encouraging reform of Africa’s economic and
commercial regimes, which will build stronger markets and more effective partners for U.S.
firms.
AGOA expands the list of products which eligible Sub-Saharan African countries may export to
the United States subject to zero import duty under the Generalized System of Preferences
(GSP). While general GSP covers approximately 4,600 items, AGOA GSP applies to more than
6,400 items. AGOA GSP provisions are in effect until September 30, 2008, nearly two years
longer than general GSP.
AGOA can change the course of trade relations between Africa and the United States for the
long term, while helping millions of African families find opportunities to build prosperity:
• By reinforcing African reform efforts;
• By providing improved access to U.S. technical expertise, credit, and markets; and
• By establishing a high-level dialogue on trade and investment.
Since its implementation, AGOA has encouraged substantial new investments, trade, and job
creation in Africa. It has helped to promote Sub-Saharan Africa's integration into the
multilateral trading system and a more active role in global trade negotiations. It has also
contributed to economic and commercial reforms which make African countries more attractive
commercial partners for U.S. companies.
IMPLEMENTATION
An AGOA Implementation Subcommittee of the Trade Policy Staff Committee (TPSC) was
established to implement AGOA. Among the most important implementation issues are the
following:
• Determination of country eligibility;
• Determination of the products eligible for zero tariff under expansion of the Generalized
System of Preferences (GSP);
• Determinations of compliance with the conditions for apparel benefits;
• Establishment of the U.S.-Sub-Saharan Africa Trade and Economic Forum; and
• Provisions for technical assistance to help countries qualify for benefits.
COUNTRY ELIGIBILITY
The U.S. Government intends that the largest possible number of Sub-Saharan African
countries are able to take advantage of AGOA. President Clinton issued a proclamation on
October 2, 2000 designating 34 countries in Sub-Saharan Africa as eligible for the trade
benefits of AGOA. The proclamation was the result of a public comment period and extensive
interagency deliberations of each country’s performance against the eligibility criteria
established in the Act. On January 18, 2001, Swaziland was designated as the 35th AGOA
eligible country and on May 16, 2002 Côte d'Ivoire was designated as the 36th AGOA eligible
country. On January 1, 2003 The Gambia and the Democratic Republic of Congo were
designated as the 37th and 38th AGOA eligible countries. On January 1, 2004, Angola was
designated as AGOA eligibile. Effective January 1, 2004, however, the President removed the
Central African Republic and Eritrea from the list of eligible countries. The U.S. Government
will work with eligible countries to sustain their efforts to institute policy reforms, and with the
remaining 11 Sub-Saharan African countries to help them achieve eligibility.
The Act authorizes the President to designate countries as eligible to receive the benefits of
AGOA if they are determined to have established, or are making continual progress toward
establishing the following: market-based economies; the rule of law and political pluralism;
elimination of barriers to U.S. trade and investment; protection of intellectual property; efforts
to combat corruption; policies to reduce poverty, increasing availability of health care and
educational opportunities; protection of human rights and worker rights; and elimination of
certain child labor practices. These criteria have been embraced overwhelmingly by the vast
majority of African nations, which are striving to achieve the objectives although none is
expected to have fully implemented the entire list.
The eligibility criteria for GSP and AGOA substantially overlap, and countries must be GSP
eligible in order to receive AGOA’s trade benefits including both expanded GSP and the apparel
provisions. Although GSP eligibility does not imply AGOA eligibility, 45 of the 48 Sub-Saharan
African countries are currently GSP eligible.
GSP PRODUCT ELIGIBILITY
AGOA authorizes the President to provide duty-free treatment under GSP for any article, after
the U.S. Trade Representative (USTR) and the U.S. International Trade Commission (USITC)
have determined that the article is not import sensitive when imported from African
countries. On December 21, 2000, the President extended dutyfree treatment under GSP to
AGOA eligible countries for more than 1,800 tariff line items in addition to the standard GSP
list of approximately 4,600 items available to non-AGOA GSP beneficiary countries. The
additional GSP line items which include such previously excluded items as footwear, luggage,
handbags, watches, and flatware were implemented after an extensive process of public
comment and review.
AGOA extends GSP for eligible Sub-Saharan African beneficiaries until September 30, 2008,
seven years longer than in the rest of the world. Sub-Saharan African beneficiary countries
are also exempted from competitive need limitations which cap the GSP benefits available to
beneficiaries in other regions.
Apparel Provisions - The Act provides for duty-free and quota-free access to the U.S. market
without limits for apparel made in eligible Sub-Saharan African countries from U.S. fabric,
yarn, and thread. It also provides for substantial growth of duty-free and quota-free apparel
imports made from fabric produced in beneficiary countries in Sub-Saharan Africa. Under
AGOA I, apparel imports made with regional (African) fabric and yarn are subject to a cap of
1.5% of overall U.S. apparel imports, growing to 3.5% of overall imports over an 8 year
period. AGOA II doubles the applicable percentages of the cap.
Under a Special Rule for Lesser Developed Beneficiary Countries, those with a per capita GNP
under $1,500 in 1998 will enjoy duty-free access for apparel made from fabric originating
anywhere in the world until September 30, 2004. Apparel imported under the Special Rule is
counted against the cap. 33 countries have been designated as eligible for the Special Rule,
once they have met the additional requirements for the AGOA apparel provisions. AGOA II
grants Lesser Developed Beneficiary Country status to Botswana and Namibia, qualifying both
countries for the Special Rule.
The cap is measured in square meter equivalents (SME’s), and has no dollar equivalent.
However, the first year cap which was in effect October 1, 2000 - September 30, 2001 allowed
AGOA eligible countries to ship nearly twice the volume of apparel to the United States which
they shipped in 1999.
Preferential treatment for apparel took effect on October 1, 2000, but beneficiary countries
must first establish effective visa systems to prevent illegal transshipment and use of
counterfeit documentation, and that they have instituted required enforcement and
verification procedures. Specific requirements of the visa systems and verification procedures
were promulgated to African governments via U.S. embassies on September 21, 2000. The
Secretary of Commerce is directed to monitor apparel imports on a monthly basis to guard
against surges. If increased imports are causing or threatening serious damage to the U.S.
apparel industry, the President is to suspend duty-free treatment for the article(s) in question.
The U.S. Government is now reviewing applications for approval of the required visa and
enforcement mechanisms from AGOA eligible countries.
Other Provisions - The Act directs the President to organize a U.S.-Sub-Saharan Africa Trade
and Economic Forum, to be hosted by the Secretaries of State, Commerce, Treasury, and the
U.S. Trade Representative. The Forum is to serve as the vehicle for regular dialogue between
the United States and African countries on issues of economics, trade, and investment. The
Secretary of Commerce is directed to ensure that at least 20 full-time Commercial Service
employees are assigned in at least ten different Sub-Saharan African countries, subject to the
availability of appropriations. The Act also calls for annual reports to Congress through 2008
on U.S. trade and investment policy in Africa and implementation of the Act.