November 6, 2023

AGOA Summit 2023: A Crucial Crossroads for US-Africa Trade Relations

AGOA Summit 2023

The recent African Growth and Opportunity Act (AGOA) Summit held in Johannesburg marked a critical juncture in the ongoing trade relations between the United States and Africa. AGOA, which allows African member states preferential access to United States (US) markets, has long been an economic benefit to the African continent. However, this year’s summit took place against a backdrop of tension due to recent diplomatic spats between the US and South Africa.

AGOA, first established by the US Congress in 2000, provides duty-free exports to the US for many goods from member countries. As of last year, exports to the US under the act were valued at $16.5 billion, with South Africa taking the lion’s share. With the current iteration of the act set to expire in 2025, South African President Cyril Ramaphosa made clear his desire to see the trade deal renewed.

The summit explored the potential reshaping of trade norms, eyeing a more balanced economic relationship between the US and African nations. One of the significant outcomes of the summit was the call for the extension of AGOA beyond its current expiration date in September 2025. This extension is seen as crucial in maintaining a stable investment atmosphere for both African and American businesses.

However, the extension of AGOA is not guaranteed. Congress is currently considering whether AGOA, in its current form, will be continued or if it will evolve into a different arrangement entirely. President Biden has expressed strong support for the reauthorization, describing AGOA as “a landmark, bipartisan law that has formed a bedrock for US trade with sub-Saharan Africa for more than two decades.”

One of the factors complicating the future of AGOA is the mechanism of review and suspension. Most recently, Uganda, Gabon, Niger, and the Central African Republic were removed from AGOA, specifically for their violation of human rights.

Another notable change at this year’s summit was the inclusion of labour union and civil society members, with representatives from some of South Africa’s largest trade unions participating in the discussions.

In conclusion, the AGOA Summit 2023 highlighted the urgency of confirming AGOA’s renewal at the earliest opportunity. The extension of this trade agreement will be pivotal in shaping the economic relationship between the US and Africa, providing business certainty and supporting Africa’s continued economic growth. However, the consent of the US Congress remains a critical factor in determining the future of AGOA, especially at a time when South Africa’s conduct has brought its relationship with the US into question. The path forward will require careful consideration and deliberation to ensure a mutually beneficial trade relationship between the two regions.