African Trade Pact Extension Urged

The African Growth and Opportunity Act (AGOA) ihas been in place for 23 years, enacted in dureing the George W Bush Administration and since renewed to 2025.  Monday, the USTR held the AGOA’s 2024 Annual Review.

Testimony began urging the U.S. to withhold AGOA benefits from Ethiopia due to the country's alleged human rights violations, specifically in the Tigray region. Restoring these benefits prematurely, would undermine accountability efforts and fail to address ongoing human rights issues. 

 Meanwhile, the case was made to include Somalia as a trade partner, highlighting that despite the conflicts, there were areas under peaceful control conducive for commerce. Advocates emphasized the desire for trade over aid, positing that fostering business relationships could help build a more robust local economy.  Somalia had not been included in the original AGOA.

During the hearing, a proposal was made to amend the Act, allowing AGOA beneficiaries to negotiate an alternative trade arrangement before being subjected to the "graduation" from the benefits. This move is intended to protect countries reaching high-income status from sliding back into the middle-income bracket due to the loss of AGOA benefits.

The Children's Place, a major U.S. clothing retailer with substantial sourcing from Africa, urged for an early renewal of AGOA in 2023 and advocated for a new ten-year term. The company emphasized that the Act had enabled them to significantly reduce their sourcing reliance on China, from approximately 40% in 2011 to less than 8% in 2022.

Fashion companies expressed their concerns over Ethiopia's removal from the program in 2022. They noted that this has negatively impacted sourcing in the region and called for the AGOA benefits to be restored to Ethiopia once improvements on the ground were confirmed.

Several participants underlined the importance of AGOA's renewal as a testament to the United States' commitment to fostering mutually beneficial relationships with African nations, as well as strengthening diplomatic ties.

The potential expiration of AGOA in 2025 was cited as a significant risk to investments in Africa. Early renewal, preferably by 2023 and for a tenure of at least ten years, was strongly recommended to maintain investor confidence in the region.

Finally, concerns were raised about the status of copyright law reform efforts in Kenya, Libya, Nigeria, and South Africa, with their potential implications for intellectual property protections. Kenya and Nigeria were noted for positive steps towards copyright protection and enforcement.