- The AGOA program expires in 2025
- Industries are exported from China
- Africa aspires to be a new investment destination
JOHANNESBURG, Nov 4 (Reuters) – U.S. businesses want certainty about the future of Washington’s flagship trade program for Africa as they reduce their reliance on China and consider investing on the continent, a Biden administration official said on Saturday.
In the wake of the global pandemic and the supply chain headaches it has caused, companies across a range of industries are relocating operations outside of manufacturing powerhouse China in an effort to reduce business risk and promote resilience.
The once-in-a-generation change comes as the African Growth and Opportunity Act (AGOA), a program that gives exports from qualifying African nations duty-free access to the US market, expires in 2025.
US officials were in Johannesburg, South Africa on Saturday to wrap up three days of talks with African trade ministers on the future of AGOA.
“American businesses want reauthorization of AGOA. Regardless of the sector, they made it very clear,” Britain’s Robinson, who heads the US administration’s Prosper Africa initiative, told Reuters on the sidelines of the meetings.
Prosper Africa was established in 2019 to strengthen US-Africa economic ties and deepen two-way trade and investment.
As U.S. companies increasingly look to Africa as an alternative investment destination as they move away from China, Robinson said they need the reassurance of AGOA’s expansion.
“(It is) extremely important. That’s what they told us,” she said, adding that the future of the program ultimately rests in the hands of the U.S. Congress. “We have no control over this.”
More than $10 billion worth of African exports entered the United States duty-free last year under the program. African countries are urging Congress to pass an early 10-year extension of AGOA without changes to reassure businesses and investors.
The initiative, originally launched in 2000, has long enjoyed bipartisan support from US lawmakers who see it as critical to countering Chinese influence in Africa.
But there are divisions in Washington over whether AGOA requires updating and how best to change it.
US Secretary of State Anthony Blinken said on Friday that the White House wants to work with Congress to improve AGOA, not just renew it without changes.
The ranking member of the US House Foreign Affairs Committee, Gregory W. Meeks, Democrat of New York, and Chairman Michael McCaul, Republican of Texas, said on Friday that they also support improving AGOA.
“But we believe the primary consideration should be to ensure a successful and timely reauthorization,” they said in a statement.
African governments and US industry associations worry that attempts to overhaul AGOA risk stalling renewal of the program in Congress, which already struggles to pass even the most critical legislation.
Namibian Trade Minister Lucia Ipumbu said African governments have communicated a unified position on AGOA and she is confident of its reauthorization.
“We don’t have to worry about what’s going on in other people’s houses as long as we get our house in order,” she said.
Reporting by Joe Bavier; edited by Clelia Oziel
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