United States President Barack Obama has reinstated Mali’s eligibility for the African Growth and Opportunity Act (AGOA), effective January 1, 2014.
Much like the U.S.’s Generalized System of Preferences program (GSP), the AGOA extends duty-free access to U.S. markets for nearly all goods produced in beneficiary countries, covering about 6,800 products in total.
The U.S. government reviews AGOA eligibility on an annual basis. Now that Mali has been added to the list, the AGOA includes forty of the forty-nine countries in sub-Saharan Africa potentially eligible for preferred trade status for 2014.
U.S. Trade Representative Michael Froman celebrated both the inclusion of Mali in particular and the success of AGOA in general. He said, “We believe that AGOA has enhanced economic progress, promoted stability, and improved the business environment for the benefit of both African and American firms. We welcome the progress that Mali has made and look forward to further engagement with AGOA beneficiary countries.”
Mali was disqualified for inclusion in March 2012 after a government coup raised concerns about its commitment to civil freedom. However, it democratically elected a new president in July 2013, raising the chances that it could become a beneficiary again in 2014. Mali President Keita has won international praise for introducing a bevy of market reforms, battling rampant corruption in the public sector, bolstering the rule of law and making progress addressing grave human rights concerns.
Originally signed into law in 2000 by then-U.S. President Bill Clinton, the AGOA is generally interpreted as an important spur to trade between the U.S. and sub-Saharan nations. Many experts estimate that the program has led to the creation of as many as 300,000 jobs in Africa.
U.S. imports from AGOA nations totaled $70.6 billion in 2011, an astonishing 59 percent increase over the previous year. More than 93 percent of all AGOA products entered the U.S. market duty-free during that period.
As a whole, Africa’s economy grew approximately 5 percent in 2013, according to the International Monetary Fund (IMF). Africa’s exports, according to statistics issued by the World Bank, has spiked by more than 200 percent over the last ten years. Still, the continent has suffered from the lack of a sophisticated industrial base and the productive capacity necessary to remain competitive. The current demand for fabric, especially in the sub-Saharan market, far exceeds its present production capacity and supply.
The AGOA has called for further regional investment in weaving, spinning and dyeing. The AGOA’s proposed strategies have produced particularly impressive results in Ethiopia.
In May, Swaziland is scheduled to undergo its review to become an AGOA beneficiary. Its future status hinges on whether it has demonstrated progress in addressing its violation of workers’ rights.