Building on AGOA, Strengthening U.S.-African Trade Ties
By Rep. Karen Bass (D-Calif.)
With strong bipartisan support in Congress, the Obama administration signed into law last year a ten-year extension of the African Growth and Opportunity Act (AGOA), the foundation of U.S. evolving trade policy with sub-Saharan Africa since 2000. The long-term renewal of AGOA serves as a powerful and enduring symbol of the U.S. trade and investment relationship with sub-Saharan Africa, while providing valuable incentives and predictability to investors seeking to capitalize on Africa’s dynamic, rapidly growing markets and to buyers looking to source from the continent.
Congress accompanied its renewal of AGOA with inquiries regarding the future of the U.S.-Africa trade relationship and its supporting policy, With a doubling of regional real GDP, a rapidly urbanizing population, and 300 million people connected to the world through the internet and mobile technologies, Africa has become better equipped to supply America with goods and to buy American products, over the past 16 years. African economies have created new industries – from ‘Nollywood’ movies to Kenya’s Internet-based financial services – whose strengths and policy needs are in intellectual property, data flow, and other areas rather than in tariff-based market access. Africa’s policy landscape has also changed substantially since 2000, with the region moving towards greater market opening and internal economic integration, as well as greater integration with China, the European Union, and other outside partners.
AGOA has provided the policy architecture for U.S.-sub-Saharan African trade and investment for the past 16 years, with its unilateral market access provisions, convening power, and basic eligibility requirements, including the establishment of market-based economies, rule of law, policies to reduce poverty, protection of internationally recognized worker rights, and efforts to combat corruption. It has helped increase trade, investment, and job creation in sub-Saharan Africa and in the U.S., as is the case of Los Angeles, where we export about $390 million a year to African customers and where we have a huge and vibrant diaspora community of Nigerians, Ethiopians, and Cameroonians, among others, eager to do business on the continent.
However, as with any temporary tariff waiver program, AGOA cannot produce the certainty and depth in the U.S.-Africa trade and investment relationship that parties on both continents need in the long-term.
The U.S. and Africa should maximize AGOA’s benefits in the remaining nine years of the renewal while also developing a policy framework beyond AGOA to deepen and strengthen the U.S.-Africa trade and investment relationship in the years to come. One major area we should focus is capacity training, which would enable African entrepreneurs to fully address the effective implementation of AGOA.
We should also develop shared principles to guide this new policy framework. These should include evolving towards greater reciprocity; driving African reforms across a broad range of policy areas; supporting Africa’s regional economic integration and integration into the global trading system; promoting Africa’s export diversification and value-added production; and accounting for different levels of readiness and capacity across the continent while preparing all African countries to assume higher standard commitments.
Second, we should work closely with our African partners to raise standards in key substantive building blocks that have the greatest potential to unlock value for business and investors. These should include fundamental areas of trade policy, including market access, trade facilitation, data flow and intellectual property, transparency, and anti-corruption, labor, and the environment.
Third, we should determine what form our future trade arrangements with our African partners should take. Possibilities could include free trade agreements with a single country, a regional economic community, or a combination of the two; a mega-regional free trade agreement building on existing African free trade agreements; or allowing African countries to join existing or renegotiated free trade agreements.
For its part, sub-Saharan Africa has long established several Regional Economic Communities (RECs) with an eye towards greater regional economic cooperation, coordination, and synergy – priorities of African Union leadership. The sheer size and potential scope of these regional markets, which include millions of upwardly mobile consumers, speak to why sub-Saharan Africa is viewed as increasingly attractive to both U.S. trade partners and competitors.
We should not look past last year’s historic renewal of AGOA. However, we should also not miss the opportunity to develop a mutually beneficial policy architecture that harnesses the true potential of the U.S.-Africa trade and investment relationship, and adapt to a changing Africa and global trading system. I stand ready to work hand in hand with my colleagues in Congress on both sides of the aisle, with the next administration, and with our partners and AGOA stakeholders in Africa.
Bass represents California's 37th District and is a member of the House Foreign Affairs Committee.