Ask the White House: Africa Growth and Opportunity ActKaran Bhatia,
Deputy United States Trade Representative
June 5, 2006
June 5, 2006
The African Growth and Opportunity Act (AGOA) authorized a new U.S. trade and investment policy toward sub-Saharan Africa. AGOA promotes African development by reducing tariffs on African goods. It has transformed U.S.-Africa trade relations. U.S. imports from sub-Saharan Africa have more than doubled since AGOA was launched in 2000. Under AGOA, we’ve seen a growth in imports of everything from autos to apparel to agricultural goods. And, although AGOA is aimed at increasing African exports to the United States, it has clearly helped U.S. exports as well. U.S. exports to sub-Saharan Africa have nearly doubled since AGOA went into effect. This increased trade translates into tens and perhaps hundreds of thousands of jobs, both in African countries and the United States.
Jill, from Cincinnati writes:
What is AGOA?
The African Growth and Opportunity Act is a U.S. law passed in May 2000. Among other things, the Act provides duty free access to the U.S. market for substantially all products exported from eligible sub-Saharan African countries. Countries become eligible if they meet certain criteria specified by the Act concerning good governance, economic reform, rule of law, etc. AGOA is the cornerstone of the Administration’s trade and investment policy toward sub-Saharan Africa, aimed at promoting free markets, expanding U.S.-African trade and investment, stimulating economic growth, and facilitating sub-Saharan Africa’s integration into the global economy.
Joey, from Dallas, TX writes:
Mr. Bhatia, I have the impression that AGOA only benefits to the USA and not really to the sub-saharan-countries. A lot of people have this impression. What do you say about it? Thank you
Joey, thanks for your question. I’ve seen the benefits of AGOA first-hand, and many Africans will tell you themselves about the benefits. The reality is that since AGOA was enacted, African exports to the United States have more than doubled. Tens of thousands of jobs have been created and millions of dollars in investment have flowed into Africa. This has helped to provide desperately needed income and resources for Africa’s growth and development.
John, from Omaha, NE writes:
Is it possible that some of the funding we are sending to Africa to help the good people there is being diverted by African leaders or warlords into terrorist organizations?
John, the U.S. Agency for International Development, Millennium Challenge Corporation, and other U.S. agencies go to great lengths to ensure that our assistance dollars are being spent wisely and for the purposes intended. Funding is typically disbursed only after a project has been thoroughly reviewed and mechanisms put in place to ensure that funds are not diverted to illicit causes. No assistance monies are simply turned over to recipient governments or organizations.
Chuck, from New Haven, CT writes:
What do you think are the key factors involved in the successful implementation of the AGOA policy, and what are the main hurdles left to be overcome?
Thanks, Chuck. There are a number of factors that are important for successful AGOA implementation. First, African countries must identify where their comparative advantages lie – that is, what products might they produce and export that will enjoy particular advantages in the U.S. market – and invest in those areas. Second, countries need to focus on creating a business-friendly environment for trade and export – solid macroeconomic policies, strong legal systems, and regulatory systems that support trade. Third, African countries need to attract and retain investment, particularly in addressing problems they have getting goods to market, including poor roads, rails, and ports. We are providing technical assistance in all of these areas.
Bill, from Columbus, Ohio writes:
What is your role at the USTR? Do you work closely with the State Department? Who in the Bush Administration is primarily responsible for the Africa portfolio?
USTR is a small agency within the Executive Office of the President that is responsible for coordinating, formulating, and implementing U.S. trade policy. We negotiate directly with foreign governments to create trade agreements, resolve disputes and participate in global trade policy organizations. We also play a coordinating role within the U.S. Government on trade issues and help explain how free trade benefits millions of people in the United States and abroad. We coordinate with all U.S. Government agencies on trade and investment policy issues, including the State Department.
John, from Bel Air writes:
What is the biggest challenge currently facing Africa today?
That's a good question John. Africa faces many challenges, including in the areas of health, education, and poverty. President Bush has worked hard to help address these challenges, including through the Initiative to End Hunger in Africa, the Africa Education Initiative, the Anti-Corruption Initiative, the President’s Emergency Plan for AIDS Relief, and global debt relief for the poorest African countries. AGOA complements these and other initiatives by helping to encourage sustainable economic growth. It provides incentives to African countries to undertake the political and economic reforms necessary for them to integrate into the global economy.
Thanks for all your questions. African countries are important partners for the United States, and I’m pleased to see the level of interest in our AGOA program. For those who want to learn more, check out the AGOA website: www.agoa.gov.
Released on June 5, 2006