The chief trade official for the African Union stated on Thursday that Africa wants the US Congress to extend its flagship trade programme for the continent for a minimum of ten years and that any changes to the initiative should be taken into consideration at a later date.
AU Trade Commissioner Albert Muchanga also stated that tariff-free entry to a new African free trade area will not be provided to the United States during his opening remarks at the beginning of three days of negotiations between African trade ministers and US officials.
The African Growth and Opportunity Act (AGOA), which was first introduced in 2000, allows duty-free access to the United States, the largest consumer market in the world, for exports from eligible African nations. Its expiration date is September 2025, and talks are already under progress about its potential revival.
“(An extension of) 10 to 20 years is very critical to the investment community. Anything lower than that would generate uncertainty,” Muchanga warned the ministers, who had convened in Johannesburg to agree on a shared stance over the program’s sustainability.
On Friday and Saturday, US officials, including US Trade Representative Katherine Tai, are scheduled to meet with the African ministers.
Legislators in the United States and the Biden administration have expressed support for extending AGOA, which allowed over $10 billion in duty-free imports from Africa into the country last year.
The question of whether the initiative has to be updated is being discussed in Washington, though.
Congress should take into consideration measures that would “make the programme more equitable,” according to Constance Hamilton, the Biden administration’s chief trade officer for Africa, who stated last week.
Governments in Africa and a few business associations in the United States caution that tinkering with AGOA during the renewal process might cause it to take longer to be reauthorized.
“If there are any enhancements to be made, those should be done after the extension,” Muchanga stated.
The duty-free provisions of AGOA are now biassed. National tariffs continue to apply to American exports to African markets. Legislators from the United States have previously proposed that the plan be made more reciprocal.
The African Continental Free Trade Area (AfCFTA) is being established with the goal of uniting 1.3 billion people in an economic bloc valued at $3.4 trillion. When it is fully operationalized, it will be the biggest free trade zone created since the World Trade Organisation was founded.