Washington’s Trade Focus Turns to Sub-Saharan Africa

In this video from The Franklin Partnership, contributing author Omar Nashashibi discusses the potential renewal status of the African Growth and Opportunity Act (AGOA).

Since its entry into force in 2000, AGOA has provided eligible Sub-Saharan African countries with duty-free access to the U.S. market for 1,800 goods otherwise subject to tariffs. As of 2024, 32 countries are eligible for benefits under AGOA after Congress extended and updated the agreement in 2015. The agreement — which many government officials believe is the most important U.S. policy towards the African continent — is currently set to expire on September 30, 2025, if Congress doesn’t act.

Imports from AGOA nations in 2022 totaled $9.4 billion, up 57 percent over the previous year. Total trade between Sub-Saharan Africa and the U.S. totaled $47.5 billion in 2023. Many of the products eligible for duty-free treatment under AGOA include textiles and apparel, transportation equipment, minerals and metals, chemicals, cocoa and cotton. Washington policymakers see the agreement’s importance extending beyond imports and to broader relations towards Africa as China expands its influence on the continent.

Where the Biden administration stands on trade with Sub-Saharan Africa

The Biden administration has not pursued any formal Free Trade Agreements (FTA) since taking office, but has launched the U.S.-Kenya Strategic Trade and Investment Partnership (STIP) in July 2022. However, many on Capitol Hill and in the business community are eager to see Washington pursue an FTA, and an AGOA extension is likely the closest trade supporters will get this year to achieving that goal.

The Office of the U.S. Trade Representative (USTR) released its 2024 Biennial Report on AGOA’s implementation on June 28. The report reviews trade with each AGOA country and addresses trade capacity building. USTR also held a forum on AGOA in Washington from July 24-26 featuring plenary sessions on investment cooperation and other topics related to regional integration.

The chances of an African Growth and Opportunity Act extension this year

Lawmakers are increasingly hopeful they can pass an AGOA extension in the lame duck period after the November election. Congress has several trade priorities outstanding for 2024, including lowering the de minimis threshold from $800, reinstating the Generalized System of Preferences, and passing a Miscellaneous Tariff Bill to lower the duty rate for goods not manufactured in the U.S. Supporters of an AGOA extension hope to include an extension in a trade package to possibly add 16 years to the agreement, pushing the expiration date to 2041.

There’s urgency to extend the AGOA in 2024 due to expected uncertainty next year in trade policy following the U.S. elections in November. In June, the House Ways and Means Committee held a hearing on the future of trade with Sub-Saharan Africa in preparation for AGOA expiring. The powerful committee’s chairman, Republican Jason Smith of Missouri, said the agreement “has a successful track encouraging economic development in Sub-Saharan Africa and greater access for U.S. agriculture products in that region.”

Holding the hearing is an important part of the process should Congress have an opportunity to move an AGOA extension in the lame duck in December of this year.

Regardless of whether lawmakers can move an extension in 2024, trade with Africa will only increase in the coming years as policymakers seek to reduce barriers for both imports and exports while strengthening ties on the continent.

How CLA can help

We will continue to keep you updated on the post-election congressional session and whether lawmakers move on an AGOA extension. Reach to learn more about trade opportunities under AGOA and products eligible for duty-free treatment.