The U.S. Congress has renewed the Africa Growth and Opportunity Act, considered a cornerstone of U.S.-Africa trade engagement.
The argument for passing AGOA was well understood by U.S. Congress, according to Brookings. Over the past several weeks, the Senate voted 97 to 1 and the House voted 394 to 37 to reauthorize AGOA for another 10 years.
Congresswoman Karen Bass, a member of the Africa Subcommittee, said in a prepared statement the reauthorization of AGOA was critically important in guaranteeing both a seamless and long-term extension of this important law.
In August 2014, President Barack Obama invited 50 African heads of state to an historic U.S.-Africa Leaders Summit. It was the largest event any American president had held with African heads of state, and helped create the momentum and the coalition that resulted in the Senate voting overwhelmingly Wednesday to extend AGOA, Bass said Thursday.
Congress cleared the legislation a day later.
AGOA, which was up for renewal in September, 2015, deadline, allows products — especially apparel made in Africa using African textiles — to come into the U.S. duty-free. Signed into law in 2000, AGOA was enacted to expand U.S. trade and investment in sub-Saharan Africa, home to some of the fastest-growing economies in the world, according to an earlier AFKInsider report.
For some U.S. companies interested in doing business in Africa, the extension of AGOA has been anything but seamless. Some apparel companies were reluctant to do so over uncertainty about whether AGOA would be renewed.
AGOA and trade with Africa are synonymous for the vast majority of the U.S. apparel and footwear industries doing business on the continent, Steve Lamar told AFKInsider. Lamar is executive vice president of American Apparel & Footwear Association, a 530-member U.S. trade association. Members do business in Lesotho, Swaziland, Bostwana, South Africa, Ethiopia, Kenya and Madagascar, among others.
The Apparel & Footwear Association conducted a member survey in 2013. Half the respondents said they were already doing business in Africa. The other half said they were holding back.
One of the things holding them back is worrying that AGOA won’t renew, said Marie D’Avignon, manager of government relations for the association.
AGOA has had great impact on sub-Saharan Africa’s clothing industry and is an important part of the reason why textile plants have started opening across the region, WallStreetJournal reports. It also explains why the trousers Americans buy at Walmart are increasingly from countries such as Ghana.
Lately, though, the law hasn’t encouraged much investment. African industrialists like Chid Liberty, who owns a T-shirt factory in Liberia, have had to worry that a gridlocked Congress would let the bill expire this September, according to WSJ.
“Congress tends to wait to the last minute to do things,” D’Avignon told AFKInsider. “In today’s supply chain, U.S. apparel and footwear companies need to know ahead of time to plan. Most companies plan 18 months out.”
Africa experts have been urging Congress for months to renew AGOA as soon as possible, according to Brookings.
The final step for AGOA is to be signed into law by President Obama, and he said he will do so as soon as it hits his desk, WSJ reports.