Based on the Trump administration`s largely anti-trade stance, there have been some concerns about the lack of AGOA in the spotlight. But that`s very unlikely. AGOA was originally passed by a Republican Congress in 2000 and was not approved until 2015. It maintains broad support across partisan divides, and even if targeted by the Trump administration, congress is unlikely to approve its repeal. Moreover, it would be foolish for the Trump administration to abandon an instrument that gives the United States so much leverage to negotiate. As the incident of the South African chicken trade shows, the U.S. government is able to use access to U.S. markets to dictate trade opportunities in Africa. Countries such as Kenya have already expressed concerns about the need to restrict trade through AGOA.
Traditionally, sub-Saharan Africa as a whole has faced critical domestic trade problems, which increase its dependence on major foreign trading partners. This regional trade gap gives the United States greater influence in participation in trade negotiations. Finally, AGOA was used as a trading tool shortly before its new authorization in 2015. At the time, the South African government refused to sell the export of chicken products to South Africa to American chicken farmers. The United States has been accused of “dumping” of poor quality products and has not been allowed to export chicken to South Africa for more than 15 years. The South African argument was that U.S. exports would destroy its local poultry industry by underestimating prices. On the U.S. side, it was argued that the ban was a barrier to U.S.
trade and investment. It has also been argued that South Africa, with its advanced (albeit stalled) economy, does not need a preferential trade agreement (this is on agoA`s development side). The renewal of AGOA and the integration of South Africa into the renewed law have become questionable because of this only sensitive point. The United States has warned Kenya against any manipulation of the shilling against the dollar during ongoing discussions on a bilateral trade pact. The United States is committed to Kenya influencing market forces under the Shilling exchange rate trade agreement against the dollar. This precondition of the Free Trade Agreement (FTA) reflects the previous claims of the… Why is the United States concluding a bilateral trade agreement with Kenya despite Agoa, the multilateral trade agreement with the continent? Are there lessons to be learned from the bilateral trade agreement between Morocco and the United States? What is the impact of the draft agreement between Kenya and the United States on the African Continental Free Trade Area (AfCFTA)? To meet AGOA`s strict authorisation requirements, countries must establish an economy based on the market economy, the rule of law, political pluralism and the right to due process, or continue to grow. In addition, countries must remove barriers to trade and investment in the United States, adopt measures to reduce poverty, fight corruption and protect human rights. Although AGOA has been extended twice, the last time until 2025, it has been threatened over the past four years due to tariffs on major steel and aluminum products and the suspension of duty-free access to clothing imports from Rwanda.
Any further disruption to AGOA could devastate the region, particularly in the medium and long term, as economies seek to recover from the effects of COVID-19. Related Content Focus on Africa The United States and Kenya are entering into a free trade agreement. Will they succeed? Witney Schneidman and Brionne Dawson Wednesday, July 29, 2020 Future development ASEAN lessons for regional integration in Africa Souleymane Coulibaly Wednesday, July 29, 2020 Africa at the centre of uncertain events: prioritizing regional value chains globally to accelerate economic development