Economy

Africa to push for 15-year extension of AGOA scheme

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US Trade Representative Michael Froman delivers remarks on the future of the African Growth and Opportunity Act (AGOA) August 5, 2013, at the Brookings Institute in Washington, DC. Signed into law in May 2000, AGOA offers African countries that open their economies and build free markets trade incentives with the United States. AFP

African leaders have agreed to push for a 15-year extension of the Africa Growth and Opportunity Act (AGOA), which waives duty on a long list of exports to the United States.

According to Kenya’s Foreign Affairs and International Trade Cabinet secretary Amina Mohammed, the decision was reached at an African Ministerial Council meeting in Washington to discuss a common position on the future of AGOA.

The ministers unanimously agreed to seek an extension at the largest-ever meeting between African leaders and US government officials, which begins this week in the American capital.

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The future of AGOA, which expires in September 2015, is a key issue for leaders attending Monday’s meeting with US President Barack Obama. Signed into law on May 18, 2000 as Title 1 of The Trade and Development Act of 2000, it offers incentives for African countries to open their economies and build free markets.

“The (14-year-old trade) programme has had mixed results”, writes Washington-based trade reporter Doug Palmer on the influential Politico.com, “with oil from countries like Nigeria and Angola accounting for the lion’s share of exports under the programme, rather than value-added goods that create more jobs.”

Despite this, many leaders believe a new compact is essential to helping Africa trade its way out of poverty within a generation.

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Last week, US Trade Representative Michael Froman called for a new “compact” that goes beyond market access and considers help overcoming infrastructure challenges and other problems that prevent Africa from competing effectively in world trade. He also suggested simplifying “rules of origin”, devising reciprocal trade arrangements and expanding the list of allowed goods.

Ambassador Mohammed also said that Kenya has expressed support for Uganda's bid to host the AGOA forum in 2017. The forum is the only annual US Government ministerial meeting with officials and businesses from sub-Saharan Africa. It brings together senior US and African officials, African regional organizations, as well as business and civil society representatives.

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