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US Brands, Retailers Urge Renewal of AGOA

Signed into law in 2000 by then-US president Clinton, the African Growth and Opportunity Act (AGOA), has helped facilitate trade between the US and sub-Saharan African companies.

Some 300,000 jobs have been created in Africa since the inception of the law, and US imports from AGOA nations have also helped create jobs for Americans.

With the AGOA authorized only through September, 2015, both US and African companies which have profited from the law are now calling for an immediate renewal of the legislation.

Under provisions of the AGOA, all goods from the 37 sub-Saharan countries covered by the act, including textiles and garments, may be imported into the US duty-free.

The President of the United States is required by Congress to review AGOA countries each year and decide whether they meet the criteria for a renewal of AGOA benefits.

African nations seeking renewal must be making progress in establishing a market economy, the must be operating in accordance with the rule of law, and must also be working toward a reduction of poverty, protection of workers’ rights, and be fighting internal corruption.

The call for renewal of AGOA may seem premature since it expires in 2015, but early renewal is a necessity because of the long lead time required by manufacturers and retailers to establish their sourcing.

US imports from nations enjoying AGOA benefits totaled $70.6 billion in 2011, the most recent year with comprehensive data.  AGOA imports that year increased by 59 percent over the previous year.

That same year, more than 93 percent of AGOA products came into the US duty free — either under AGOA provisions,  the Generalized Systems of Preferences (GSP), or under the Most Favored Nations rules.