Since its enactment in 2000, the African Growth and Opportunity Act (AGOA) has been at the core of U.S. economic policy and commercial engagement with Africa.

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To meet AGOA’s rigorous eligibility requirements, countries must establish or make continual progress toward establishing a market-based economy, the rule of law, political pluralism, and the right to due process. Additionally, countries must eliminate barriers to U.S. trade and investment, enact policies to reduce poverty, combat corruption and protect human rights.

By providing new market opportunities, AGOA has helped bolster economic growth, promoted economic and political reform, and improved U.S. economic relations in the region.

38 countries are eligible for AGOA benefits in 2020.  In 2015, Congress passed legislation modernizing and extending the program to 2025.

AGOA Eligible Countries

The legislation authorized the President of the United States to determine which sub-Saharan African countries would be eligible for AGOA on an annual basis. The eligibility criteria were to improve labor rights and movement toward a market-based economy. Each year, the President evaluates the sub-Saharan African countries and determines which countries should remain eligible.

Current Countries Eligible for AGOA Benefits

Countries’ inclusion has fluctuated with changes in the local political environment. In December 2009, for example, Guinea, Madagascar, and Niger were all removed from the list of eligible countries; by October 2011, though, eligibility was restored to Guinea and Niger, and by June 2014, to Madagascar as well. Notice was given that Burundi would lose its AGOA eligibility status as of 1 January 2016. In August, 2017, Togo was recognized as an eligible country.

On 1 January 2022, the United States removed Ethiopia, Mali and Guinea from the AGOA programme over alleged human rights violations and recent coups. In a statement the US Trade Representative explained the removal was “due to actions taken by each of their governments in violation of the AGOA Statute”. As of January 1, 2022, 36 countries are eligible to participate in AGOA.

From Wikipedia

The original AGOA legislation was signed into law as Public Law 106-200 during May 2000.

CLICK HERE TO DOWNLOAD ORIGINAL AGOA LEGISLATION

There have been subsequent updates to the African Growth and Opportunity Act (AGOA) legislation which were passed by the US Congress – a good example of this is the Miscellaneous Trade and Technical Corrections Act of 2004. Other updates, such as the AGOA Acceleration Act of 2004, extended the legislation beyond its original 8-year term.

Furthermore, additional amendments addressed aspects of the AGOA legislation that were set for earlier expiry, for example the special wearing apparel provisions that granted beneficiary countries favourable rules of origin pertaining to exports of clothing under AGOA. The most recent extension of AGOA, covering the period 2015 – 2015, is known as the AGOA Enhancement Act of 2015.

So you want to know if you need to “register” somewhere in order to export under AGOA.

The quick answer is No, an exporter is not required to “register” under the AGOA legislation in order to take advantage of its benefits when exporting goods to the US.

Having said that, each country has different rules and regulations and many countries require that an exporter be registered for export purposes with local customs or revenue authorities (this is unrelated to AGOA per se). Often this also involves receiving a unique exporter authorization number. These are national measures and different from country to country: it is advisable to contact the customs or revenue authorities in the home country to see what registration measures and related formalities may be required.

On African Trade Platform, registration is necessary as a security measure to ensure the safety and peace of mind for buyers and sellers. Sellers cannot upload a product without providing key details, likewise, buyers cannot bid or offer to purchase without also supplying key documentation.

Section 110 of the Trade Preferences Extension Act of 2015 (“the Act”), 19 U.S.C. § 3705 note, states that the President shall submit a report to Congress on the trade and investment relationship between the United States and sub-Saharan African countries no later than one year after the enactment of the Act, and biennially thereafter. This reporting function was delegated to the United States Trade Representative (USTR) in Executive Order 13720 of February 26, 2016.

The current report covers the period since then (July 2020 to the present). As required by the legislation, the report provides a description of the status of trade and investment between the United States and sub-Saharan Africa, changes in country eligibility for AGOA benefits, an analysis of country compliance with the AGOA eligibility criteria, an overview of regional integration efforts in sub-Saharan Africa, and a summary of U.S. trade capacity building efforts. As required by section 110, this report also fulfills the statutory requirements in the Act to report to Congress on potential trade agreements.

The US President may designate a country as a beneficiary Sub-Saharan African country eligible for AGOA preferences if he determines that the country meets the eligibility criteria set forth in: (1) Section 104 of AGOA (see 19 U.S.C. 3703); and (2) section 502 of the 1974 US Trade Act (see 19 U.S.C. 2462).

Only countries in Sub-Saharan Africa can be AGOA beneficiaries, since the legislation specifically seeks to enhance the trade, investment and political relationship between the US and Sub-Saharan Africa. In order for a country to qualify as an AGOA beneficiary, and to maintain its beneficiary status, it must meet a number of criteria set out for this purposes by the AGOA legislation as well as by the US Trade Act of 1974 (see links above). A country must also be eligible for the US Generalized System of Preferences (GSP), whose eligibility requirements and those of AGOA essentially overlap.

While GSP eligibility does not imply AGOA eligibility, 47 of the 48 Sub-Saharan African countries are currently GSP eligible.

Among the required criteria, a country must have established, or make continual progress towards establishing, a market based economy, political pluralism, respect private property rights, incorporate an open rules-based trading system, eliminate barriers to US trade and investment, respect internationally recognized human rights, protect worker rights and so forth.

In addition, the country may not engage in activities that undermine US national security or foreign policy interests.

Countries that do not meet these criteria will lose their AGOA beneficiary status. The US routinely assesses ongoing compliance with these criteria and in the event of a country no longer meeting the criteria will place that country on notice pending suspension from receiving AGOA preferences. Under the most recent AGOA legislation (2015), a variety of stakeholders including private organizations and entities have the right to apply for an AGOA beneficiary’s status under the AGOA legislation to be reviewed, should there be evidence of a country not or no longer meeting the AGOA eligibility requirements

AGOA’s (original) eligibility criteria – Section 104 of the Act

The African Growth and Opportunity Act (AGOA) forms part of US legislation and as such may be amended, extended or repealed for example through an Act of Congress.

Consequently, the status as an AGOA beneficiary is not permanent but rather based on the ongoing compliance with the AGOA eligibility requirements. A country that no longer fulfills these criteria may lose its AGOA status following a notice period; in such cases that country would revert to that of any other country without AGOA status (which may entail lesser GSP preferences, or even no preferential market access at all). When a country that is not AGOA eligible – or which has lost its AGOA status – meets the AGOA eligibility criteria, the President of the US may consider reinstating that country’s AGOA beneficiary status.

Under the most recent extension of AGOA, its preferences and privileges were extended by an additional 10 years from 2015 to 2025. This extension included the special preferences for wearing apparel, which allows beneficiaries subject to conditions to utilize imported fabric in their manufacturer of AGOA-compliant garments (previously, the special preferences for apparel exporters were more limited in duration).

The African Growth and Opportunity (AGOA)’s benefits go beyond mere market access, and include closer collaboration between the US and African countries in other areas, technical and economic assistance, aid, investment funding, political and strategic collaboration in certain fields, and so on. One of the key benefits however remains preferential market access to the US market for over 6,500 products when these are produced and (also) originate in Africa.

By removing US import duties on products covered by the AGOA legislation, producers and exporters in AGOA beneficiary countries receive a competitive advantage over exporters in other countries who may need to pay standard US import duties, which for certain textile articles might be more than 30% on the value of the product. This is a win-win scenario both for African producers and exporters as well as for US importers and consumers, the latter who may benefit from more competitive sourcing of products, compared to sourcing from elsewhere. Products that are AGOA eligible may thus claim duty-free status when imported into the US. AGOA products use the code ‘D’ in the US Harmonized Tariff Schedule to reflect their AGOA status when the relevant paperwork is filed on importation into the US. Apparel products are classified separately in the tariff database.

‘D’ – AGOA duty-free treatment

‘A’ – Generalized System of Preferences

etc.

While even a small duty rate can translate into a significant competitive advantage for a producers exporting to the US from Africa, there is a correlation between the size of the standard US import duty and the relative benefit that a US importer sourcing products from Africa can claim: the higher the duty saving, the greater the relative advantage of using AGOA when clearing goods for import into the US. In highly competitive sectors where even a small percentage saving can translate into a valuable advantage, AGOA preferences can play an important role in helping to facilitate trade between Africa and the US.

AGOA covers more than 6,000 products using the HTS-8 tariff classification. This includes approximately 5,000 products (tariff lines) that fall under the GSP as well as more than 1,000 tariff lines that are duty-free only for exports to the US from AGOA beneficiaries. A searchable list of products eligible for duty-free export to the US is available at this link (status: 2017).

What is the HTS-8 product classification?

The HTS refers to the US Harmonised Tariff System nomenclature, and is largely based on the internationally standardized Harmonized Commodity Description and Coding System managed by the World Customs Organisation. It classifies all traded products into sections, chapters, headings, sub-headings and so on.

Let’s take, for example, “pineapples in packages“:

• Section II represents vegetable products
• Chapter 08 covers edible fruit and nuts, peel of citrus/melons
• Heading 0804 covers dates, figs, pineapples, avocadoes etc.
• Sub-Heading 0804.30 covers pineapples
• The 8-digit sub-division 0804.30.40 covers ‘pineapples in crates or other packages’

Using the above example:

Tariff line 0804.30.40 has a standard US import duty of 2.11c / kg (as of 2017)

It also has the AGOA ‘D’ code in the US tariff book, meaning that when imported into the US from an AGOA beneficiary, this import duty is not applicable.

AGOA Eligible Products

In order for a product to qualify for AGOA preferences, a number of factors are considered (AGOA coverage falls within the area of responsibility of the US International Trade Commission, the US Congress and others).

These include the following:

(1) the product must be included in the list of GSP-eligible articles (without exclusions), or

(2) included in the list of new AGOA products (denoted ‘D‘), or be a qualifying apparel or textile item;

(3) It must be imported into the United States directly from the AGOA beneficiary country or pass through another country in a sealed container and addressed to a location in the United States;

(4) The article must be the growth, product, or manufacture of the AGOA beneficiary country by fulfilling the relevant Rules of Origin requirements for general or apparel items respectively

(5) If foreign materials are imported into the AGOA country first, to be used in the production of an AGOA-eligible product, the sum of the cost of the materials produced in the AGOA beneficiary country, plus the costs of processing, must equal at least 35 percent of the product’s value when the product is sold for export into the United States (see section on Rules of Origin);

(6) In the case of clothing/apparel, the 35% rule does not apply directly, instead, the goods need to comply with the respective textile and apparel Rules of Origin requirements;

(7) The US importer must request duty-free treatment under AGOA on the relevant customs entry form (Form 7501) by placing an “D” in column 27 in front of the US tariff number that identifies the imported article

AGOA Form 75010

The U.S. Government has conducted technical assistance seminars in Africa and the United States to explain the benefits of the Act, in order to ensure that African countries are able to take maximum advantage of its provisions.

AGOA II permits Botswana and Namibia to qualify for the “Special Rule,” which permits lesser developed AGOA beneficiary countries to utilize fabric manufactured anywhere in the world (extended until September 30, 2007 under AGOA III). Since Botswana’s and Namibia’s per capita GNP exceeded $1,500 (the 1998 World Bank level), they were not designated as a lesser developed beneficiary country and were not eligible for the Special Rule under the original AGOA legislation.

The Africa Investment Incentive Act of 2006 (AGOA IV) continues to grant lesser-developed beneficiary country status to Botswana and Namibia, qualifying both countries for the Special Rule. While an amendment to the AGOA Acceleration Act of 2004 granted lesser-developed beneficiary country status to Mauritius, AGOA IV did not continue to grant Mauritius lesser-developed beneficiary country status.

The President may designate Sub-Saharan African countries as eligible to receive the benefits of the Act if they are making progress in such areas as: establishment of market-based economies; development of political  pluralism and the rule of law; elimination of barriers to U.S. trade and investment; protection of intellectual property; efforts to combat corruption; policies to reduce poverty, increase availability of health care and  educational opportunities; protection of human rights and worker rights, and elimination of certain practices of child labor. Progress in each area is not a requirement for AGOA eligibility.

SMEs should compel policy makers to capture & develop policies, initiatives that are responsive to their needs by engaging and letting their voice be heard for strategies to be developed and implemented and should drive sectoral stakeholder engagements.

In addition should serve/ be represented on all national committees driving the strategy development. Apart from that SMEs should request governments to form part of industry bodies and registered on national databases to create enabling environments for AGOA & GSP as well as should advocate to form part of all capacity building programs development of frameworks.