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The African Growth and Opportunity Act

Introduction

Under President George W. Bush, U.S. aid to Africa has more than doubled. The continent receives most of the funding from programs like the President's Emergency Program for AIDS Relief (PEPFAR) and the Millennium Challenge Corporation (MCC). But some analysts say potentially the most successful U.S. initiative in Africa is not aid, but trade. Since 2000, sub-Saharan Africa has enjoyedbroad access to U.S. markets due to the passage of the African Growth and Opportunity Act (AGOA). The legislation expanded the number of tariff-free goods-from textiles to agricultural goods to motor-vehicle components-that countries in the region could export to the United States. But while trade has increased between the United States and Africa, it remains concentrated on oil and other commodities produced in a handful of countries. Some analysts say the act's objective of spurring African economies will only be reached by steps such as the opening up agricultural trade between Africa and the United States, and improvements in the capacity of African states to trade with the United States and with each other.

Liberalizing Trade to Africa

The African Growth and Opportunity Act, passed in May 2000 and signed by President Bill Clinton, aims to increase trade between the United States and sub-Saharan Africa. To become eligible for trade benefits, a country must make progress on criteria that include: market-based reforms; the rule of law; reduced barriers to U.S. trade and investment; economic policies to reduce poverty; labor standards; and anti-corruption measures. As of May 2008, forty countries were eligible.

Eligible countries receive trade benefits that expand the list of duty-free goods they can export to the United States. Prior to AGOA, African countries received tariff-free benefits under the Generalized System of Preferences (GSP) program, an initiative aimed at expanding trade...

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