USTR - AGOA Report Shows Increase in U.S.-Africa Trade
Office of the United States Trade Representative

 

AGOA Report Shows Increase in U.S.-Africa Trade
Details U.S. Programs to Help Africans Cut Poverty Through Trade 05/18/2006

WASHINGTON -- Today, the U.S. Trade Representative submitted a report to Congress on the benefits of the U.S. trade program with respect to sub-Saharan Africa.

The 2006 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act (AGOA) notes that two-way trade between the United States and sub-Saharan African countries has increased 115 percent since AGOA’s launch in 2000. It also describes the wide array of U.S. programs that are assisting African countries to bolster economic growth and development through trade.

"AGOA helps Africans use the power of trade to grow their economies and reduce poverty," said U.S. Trade Representative Rob Portman. "It also supports the efforts of those African countries undertaking difficult economic and political reforms. As these countries open their economies and increase their capacity to trade, opportunities are also arising for American exports to Africa."

"The United States recognizes how aid for trade helps developing countries participate more fully in the global trading system," Portman noted. "That’s why we committed $199 million to trade capacity building activities in sub-Saharan Africa last year."

The annual report to Congress provides an overview of the U.S. trade and investment relationship with sub-Saharan African countries, describes trade capacity building and other technical assistance programs undertaken in support of AGOA objectives, and summarizes developments in sub-Saharan African countries related to AGOA’s eligibility criteria. The full report can be found on the USTR web site: www.ustr.gov.

 

Highlights from the 2006 report:

  • Thirty-seven of the 48 sub-Saharan African countries are eligible for benefits under the African Growth and Opportunity Act (AGOA), which provides them duty-free access to the U.S. market for virtually all products. On January 1, 2006, Burundi was added to the list of eligible countries, and Mauritania was removed from the list. As of April 2006, twenty-five sub-Saharan African countries are eligible to receive AGOA’s apparel benefits. Fourteen of these countries also qualify for AGOA’s provisions for handloomed and handmade articles. One country, Nigeria, qualifies for AGOA’s ethnic printed fabric benefits.

  • Since its inception in 2000, AGOA has helped increase U.S. two-way trade with sub-Saharan Africa by 115 percent. In 2005, U.S. total exports to sub-Saharan Africa rose 22 percent from 2004, to $10.3 billion. U.S. total imports from sub-Saharan Africa increased by 40 percent to $50.3 billion. In 2005, over 98 percent of U.S. imports from AGOA-eligible countries entered the United States duty-free.

  • U.S. imports from sub-Saharan African countries under AGOA (including its GSP provisions) totaled $38.1 billion in 2005, up 44 percent over 2004 – largely due to oil. Several non-oil sectors experienced increases, including footwear, toys, sportswear, fruits, nuts and cut flowers. However, total non-oil AGOA trade declined by 16 percent, to $2.9 billion in 2005, mainly due to: increased global competition in the apparel sector, resulting in part from the end of global apparel quotas and the anticipated end of AGOA third country fabric provisions; an appreciation of key currencies such as the South African rand; decreased demand for key minerals and metals such as manganese; and production shifts in the South African automotive sector.

  • The Administration is intensifying its work with U.S. stakeholders, including Congress, private sector and non-governmental organizations, as well as with African governments, international financial institutions, and others to identify and address barriers inhibiting country and product utilization of AGOA.

  • The United States devoted $199 million to trade capacity building (TCB) activities in sub-Saharan Africa in FY2005, up more than 10 percent from FY2004, and up about 50 percent from FY2003. In addition to ongoing TCB work conducted by regional trade competitiveness hubs in Ghana, Botswana, and Kenya, a fourth hub was opened in Dakar, Senegal in October 2005 to help eligible African countries increase their exports under AGOA.

  • The United States was a leading provider of foreign direct investment to Africa. At year-end 2004, the U.S. direct investment position rose 23.4 percent from 2003, to $13.5 billion. U.S. direct investment in Africa supports U.S. trade with the region and enhances U.S.-African business partnerships.

  • The United States and the Southern African Customs Union (SACU) remained committed to concluding a comprehensive free trade agreement (FTA). In April 2006, the United States and SACU agreed to establish a framework that would form the basis for pursuing the FTA over the longer term, develop a joint work program to address a broad range of FTA and other related issues, and seek to conclude concrete trade- and investment-enhancing agreements.

  • The fourth annual meeting of the U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum was held in Senegal in July 2005. The official U.S. delegation was led by Secretary of Agriculture Mike Johanns. Secretary of State Condoleezza Rice joined the closing ceremonies, and other senior U.S. government representatives participated in the meeting. Ministers and senior officials from nearly all AGOA countries participated, as well as private sector and civil society representatives from the United States and AGOA countries. During the Forum, President Bush announced a new Presidential Initiative – the African Global Competitiveness Initiative (AGCI) – providing $200 million in funding over five years to support expanded African trade and improved African export competitiveness.

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