After floating a draft of their bill for the past several months, key US senators on 11 April introduced legislation to renew America’s signature Africa trade programme until 2041.

The bipartisan bill from Democrat Chris Coons of Delaware and Republican James Risch of Idaho, both members of the Senate Foreign Relations Committee, is the most viable effort yet to reauthorise the African Growth and Opportunity Act (AGOA) before it expires in 2025.

This bipartisan bill aims to refine AGOA’s eligibility criteria, increase transparency and hold US agencies accountable

The AGOA Renewal and Improvement Act is cosponsored by Democrats Michael Bennet of Colorado, Dick Durbin of Illinois and Chris Van Hollen of Maryland, and Republicans Mike Rounds of South Dakota and Todd Young of Indiana.

The programme granting duty-free access to the US market for qualifying sub-Saharan countries has been the cornerstone of America’s trade engagement with the continent since it was enacted under former president Bill Clinton in 2000.

Revised conditions

The proposed bill would make several adjustments to improve investor confidence and take advantage of the African Continental Free Trade Area (AfCFTA). It would also give lawmakers a greater say in which countries get suspended or readmitted into the programme.

“AGOA plays a significant role in US-sub-Saharan Africa trade and investment, as well as in US foreign policy. This bipartisan bill aims to refine AGOA’s eligibility criteria, increase transparency and hold US agencies accountable for their advice to the president,” Risch said. “This legislation will bolster Congress’ involvement in the eligibility process and oversight, demonstrating a strong commitment to AGOA.”

Congressional reauthorisation is a priority for the Joe Biden administration.

“I strongly support reauthorisation of AGOA – a landmark, bipartisan law that has formed a bedrock for US trade with sub-Saharan Africa for more than two decades,” the president said in November.

“I encourage Congress to reauthorise AGOA in a timely fashion and to modernise this important Act for the economic opportunities of the coming decade.”

Key changes

There are 32 countries in sub-Saharan Africa currently eligible for AGOA benefits. Due to military coups or human rights abuses, Gabon, Niger, Uganda and the Central African Republic (CAR) were expelled at the beginning of the year. Ethiopia was suspended in late 2021 over the conflict in Tigray and surrounding regions.

The proposed bill would make several changes that could boost investor confidence in Africa, a key priority for the US government as it looks to diversify global supply chains away from China.

“Over the past 24 years, AGOA has created jobs and economic growth in one of the fastest-growing regions of the world and created investment opportunities for American businesses,” Coons said. “The AGOA Renewal and Improvement Act is necessary to support continued economic development on the continent while further strengthening ties between the US and partners in sub-Saharan Africa.”

Key provisions include:

• Extending the programme for 16 years, in line with the US-Mexico-Canada Agreement, by creating more business certainty.
• Lengthening the mandated eligibility review period from one year to two and empowering Congress to demand immediate out-of-cycle reviews, both to suspend problematic countries and to reinstate those deemed to be making progress.
• Offering the executive branch options beyond full termination of benefits for dealing with countries that fall short of the bill’s requirements, including partial termination for certain products, putting countries on notice if they don’t make changes in the coming year, or taking no action if US interests are better served that way.
• Modifying the bill’s rules of origin so that inputs from North African countries count towards the requirement that 35% of a product’s value originate in Africa.
• Ensuring that countries do not graduate out of the programme until they’ve maintained “high-income” status for five consecutive years, given the volatility of African GDPs.
• Clarifying eligibility criteria beyond upholding a market-based economy, good governance and human rights, including new requirements that beneficiaries not be subject to coup-related restrictions in US foreign aid appropriations, not be designated as a state sponsor of terrorism, and not be designated as a country in violation of the Child Soldiers Prevention Act.

Pan-Africanism

The bill comes as AfCFTA Secretary General Wamkele Mene was making the rounds in Washington this week to press the US to help with African economic integration. Every African country except Eritrea has signed the initiative and it was ratified by 47 countries.

Mene, who was unanimously reelected to a second four-year term in February, told a panel at the Brookings Institution earlier this week that his office hopes to finish negotiating rules of origin for the labour-intensive automobile and textile sectors by the end of the year, creating a free trade area that has 100% coverage of rules of origin, up from 92.3% currently.

He also reiterated the African position that AGOA should treat all countries on the continent equally as much as possible.

“We have to have consideration in the renewal of AGOA that AGOA going forward must support integration in Africa,” Mene tells The Africa Report. “And if there are countries that are out of AGOA, then it causes disintegration.”