About AGOA
Saturday, 23rd March 2019

About AGOA

 

African Growth and Opportunity Act - AGOA


 

AGOA, the African Growth and Opportunity Act, was passed as part of The Trade and Development Act of 2000 to benefit countries in Sub-Saharan Africa through the most liberal access to U.S. markets available to any country or region with which the U.S. does not have a Free Trade Agreement. It seeks to strengthen African reform efforts, provide improved access to U.S. credit and technical expertise, and establish dialog on trade and investment between countries of Sub-Saharan Africa and the U.S.

Dependent upon origin and other conditions that are reviewed both annually and periodically by the U.S. government, most goods that enter the U.S. under AGOA do so as either duty free or at reduced duty rates. The original list of 1,800 goods that qualified under AGOA I have since been expanded to include all goods listed under GSP (the Generalized System of Preferences). GSP covers more than 4,600 items, and together, AGOA GSP covers more than 6,400 qualified items.

For apparel makers, AGOA offers a third-party provision that allows unfinished goods from non-AGOA countries to pass through an AGOA-qualified country where value-added processes are completed then re-exported directly on to U.S. markets under preferential treatment. The total per centum of required value-added to qualified goods varies under rules issued by the U.S. However, some value-additions of as little as ten-percent (10%) qualify for preferential treatment under the Act. AGOA GSP third-party provisions were extended in August, 2012 and are in effect until 30th September, 2015, subject to a cap.

For U.S. companies, by offering tangible incentives for African countries to implement economic and commercial reform policies, AGOA contributes to better market opportunities and stronger commercial partners in Africa. The Act seeks to forge stronger commercial bonds between Africa and the United States, while helping to integrate Africa into the global economy. U.S. firms may find new opportunities through privatization efforts of African state-owned  enterprises, or in partnership with African companies in infrastructure projects.