• Trade in goods between the US and sub-Saharan Africa increased nearly 6% to US$39bn between 2015 and 2017.
  • Sub-Saharan African non-oil exports to the US under AGOA equalled $4.3bn in 2017, up from $4.1bn in 2015, mainly due to increases in exports including apparel.
  • The US says it aims to strengthen bilateral trade relationships in sub-Saharan Africa, with a goal of  establishing a free trade agreement that could serve as a model for developing countries.
Kenya, Lesotho, Madagascar, and Mauritius have been the leading exporters of apparel under AGOA

Kenya, Lesotho, Madagascar, and Mauritius have been the leading exporters of apparel under AGOA

The US administration has said that strengthening bilateral trade relationships with sub-Saharan Africa remains a key goal for the country as it looks to build on the African Growth and Opportunity Act (AGOA).

Trade in goods between the US and sub-Saharan Africa increased nearly 6% to US$39bn between 2015 and 2017, according to a report delivered to Congress last week by the Office of the US Trade Representative (USTR).

Sub-Saharan African non-oil exports to the US under the African Growth and Opportunity Act (AGOA) equalled $4.3bn in 2017, up from $4.1bn in 2015, mainly due to increases in exports under AGOA in apparel, iron and steel, fruits and nuts, cocoa paste and cocoa powder, and footwear.

Since its enactment in 2000, AGOA has been at the core of US economic policy and commercial engagement with Africa. The trade agreement provides eligible sub-Saharan African countries with duty-free access to the US market for over 1,800 products, in addition to the more than 5,000 products that are eligible under the GSP programme. The additional products include value added agricultural and manufactured goods, such as processed food products, apparel, and footwear.

Many AGOA beneficiary countries have taken advantage of AGOA benefits related to the programme's tariff preferences and liberal rules of origin for apparel. AGOA beneficiaries' utilisation of these benefits led to an increase and diversification of sub-Saharan African exports of apparel to the US.

Kenya, Lesotho, Madagascar, and Mauritius have been the leading exporters of apparel under AGOA, accounting for almost 90% of apparel exports in 2017.

Speaking to Congress last week, US Trade Representative Robert Lighthizer said: "With today's report and next month's AGOA Forum, the Trump Administration is continuing to build on AGOA's success by strengthening bilateral trade relationships in sub-Saharan Africa with the goal of establishing a free trade agreement that could serve as a model for developing countries.

"By reducing barriers to trade, we create more opportunity, jobs, and wealth for workers in both the United States and Africa."

In order to participate in AGOA, countries must establish or make continual progress toward establishing a market-based economy, the rule of law, political pluralism, and the right to due process. Additionally, countries must eliminate barriers to US trade and investment, enact policies to reduce poverty, combat corruption, and protect human rights.

"By providing new market opportunities for African exports, AGOA has helped bolster African economic growth and alleviate poverty on the continent," the USTR report states. "Additionally, AGOA has helped create a more conducive environment for American investment and business interests as African markets continue to expand."

Expanding the US-Africa trade relationship beyond the African Growth and Opportunity Act will be the focus of the AGOA Forum to be held in Washington, DC on 11-12 July. The Forum's 2018 theme is 'Forging New Strategies for US-Africa Trade and Investment'.

In March, the USTR determined Rwanda was not making sufficient progress towards eliminating barriers to US trade and investment and subsequently suspend the country's duty-free treatment for all AGOA-eligible apparel products. A year earlier, the Secondary Materials and Recycled Textiles Association (SMART) filed a case with the USTR challenging policies that limit used clothing imports in Kenya, Rwanda, Tanzania and Uganda. Kenya, Tanzania and Uganda resolved the issue in 2017.