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Agoa comeback under threat from Africa free trade deal

The US government is exploring ways of renewing a preferential trade programme that gives countries in sub-Saharan Africa preferential access to US markets, allowing them to export products tariff-free.

President Joe Biden wants to improve on the African Growth and Opportunity Act (Agoa) which comes to an end in 2025, to tap into Africa’s expanding integration.

The proposals could be put on the table as Biden prepares to host his first physical US-African Summit to be held on December 13 in Washington.

This is despite the fact that, after nearly two decades of Agoa benefits, many East African Community states have failed to fully utilise the programme.

Rwanda, Ethiopia, Guinea and Mali, across the continent, were even suspended from the trade facility. Now these countries are a part of the fledgling Africa Continental Free Trade Area Agreement (AfCFTA), a 2018 trade deal meant to link up regional blocs to one another through trade.

Easier markets

The AfCFTA, if successful, could challenge the very US offer in Agoa by providing easier markets in the neighbourhoods of countries that struggled to meet standards into the US.

But it could offer Washington an opportunity to influence geopolitics by supporting open trade between African countries.

In its latest strategy report titled US Strategy Towards Sub-Saharan Africa August 2022, the US government has pledged to support Agoa and the implementation of the African Continental Free Trade Area agreement (AfCFTA).

Willing partners

“We will work with willing African partners to deepen and broaden our trade relationship, including trade negotiations, to deliver equitable and inclusive prosperity,” the report reads in part.

“We will work with the Congress on the future of Agoa, which expires in 2025, and will support the AfCFTA’s implementation.”

The US pledged to assist African countries to more transparently leverage their natural resources, including energy resources and critical minerals, for sustainable development while helping to strengthen supply chains that are diverse, open, and predictable.

“Africa will shape the future — and not just the future of the African people but of the world,” said Antony Blinken, the US Secretary of State.

Food insecurity

In addition, the United States will work closely with African and multilateral partners to address the drivers of food insecurity and boost food production to mitigate the risk of malnutrition and famine that the UN estimates are affecting nearly 800 million Africans.

The US also intends to “promote customs-to-business partnerships, increase the use of US Government trade transit cargo security measures, and expand data sharing with African partners.”

The continent will be home to one quarter of the world’s population by 2050 and hosts vast natural resources, including the world’s second-largest rainforest and 30 percent of the critical minerals that power the modern world.

The strategy outlines four objectives to advance US priorities in concert with regional partners in sub-Saharan Africa during the next five years.

“The United States will leverage all of our diplomatic, development, and defence capabilities, as well as strengthen our trade and commercial ties, focus on digital ecosystems, and rebalance toward urban hubs,” the strategy reads in.

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