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Debates ensue over US's tax-free trade program with Africa

Debates over the US's tax-free trade program with Africa ensues
  • The African Growth and Opportunity Act (AGOA) has successfully reduced poverty and created jobs in some Sub-Saharan African nations. 
  • Only five nations, South Africa, Kenya, Lesotho, Madagascar, and Ethiopia, exported non-petroleum goods duty-free to the United States between 2014 and 2021. 
  • The U.S. House of Representatives Ways and Means Committee ordered the research in order to inform the debate in Congress over whether to extend or reform AGOA, which expires on September 30, 2025.

A recent report to the U.S. Congress revealed on Monday that while a significant U.S. trade preference program for Sub-Saharan Africa has been successful in boosting the region's garment sector in some nations, its advantages are not felt equally by all countries and sectors.

The African Growth and Opportunity Act (AGOA) trade benefits, according to a report by the U.S. International Trade Commission (USITC), have reduced poverty and helped create jobs in several nations, particularly for women.

Just five nations, South Africa, Kenya, Lesotho, Madagascar, and Ethiopia, exported non-petroleum goods duty-free to the United States between 2014 and 2021, according to the analysis.

The U.S. House of Representatives Ways and Means Committee ordered the research in order to inform the debate in Congress over whether to extend or reform AGOA, which expires on September 30, 2025. The initiative, which serves as a pillar of U.S.-African trade ties, was established in 2000 with the goal of advancing democracy and the economic growth of Sub-Saharan Africa.

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The report singled out apparel as the program's greatest accomplishment, with the sector helping key exporters like Madagascar, Kenya, Lesotho, Mauritius, and Ethiopia reduce their levels of poverty.

"AGOA benefits appear to be essential for Sub-Saharan Africa countries to maintain their apparel exports to the United States," the USITC report said.

The report also observed that due to a lack of progress in the development of higher value-added downstream manufacturing, AGOA has had less effectiveness in decreasing poverty for workers in other sectors, such as cotton farming, cocoa production, and chemicals.

"While certain sectors and countries have benefited from the program, AGOA has not achieved all that we had hoped, and more work must be done to improve our economic relationships," said U.S. Representative Richard Neal, the top Democrat on the Ways and Means Committee.

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