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AfricaMoney | August 22, 2017

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US to fine tune African Growth and Opportunity Act

US to fine tune African Growth and Opportunity Act

The four investigations into the Act include an overview assessing its impact on the economies of sub-Saharan Africa and the factors affecting trade, investment and the economic climate. (Image: US Government)

The US economy intends to showcase its focus on the emerging African continent by fine tuning the African Growth and Opportunity Act (AGOA) to create greater investment and trade opportunities with the fast growing economies in the region.

Towards this end, the US International Trade Commission (USITC) is launching four separate investigations on the AGOA at the start of next year.

The move, at the request of the US Trade Representative (USTR), comes as the Obama Administration works to renew and potentially modify AGOA, which first entered into force in 2000 and is due to expire on 30 September 2015.

The Act significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries. In order to qualify and remain eligible for AGOA, each country must be working to improve its rule of law, human rights, and respect for core labor standards.

In this context, a demand for renewal of legal measures as well as continuation of dispensation concerning “Third Country Fabric” for a period more than 10 years has been made by Sub-Saharan African countries.

If this request is approved, clothing manufacturers in African countries, including Mauritius, will continue to benefit from reduced taxes when they import their raw materials of third country and export their finished products to the US market.

The four USITC reports include one public report, an overview assessing the act’s impact on the economies of sub-Saharan Africa and the factors affecting trade, investment and the economic climate.

The other three reports will be confidential, including one on the effects of duty-free treatment for AGOA imports on US industries and consumers; one on possible changes to rules of origin under AGOA with the potential to increase exports from AGOA-eligible countries; and one the impact of the EU-South Africa free trade agreement on US exports to South Africa.

According to Stephen Hayes, President and CEO of the Corporate Council on Africa an organization representing the interests of African continent in the United States, factoring in the results of the study will allow the US to adopt a wiser approach in trading with Africa. It may very well strengthen African say in how the US develops future trade agreements and policies with these fast growing economies.

The USITC said it would hold a public hearing on the issues on 14 January next year, with all written submissions to be sent in by 21 January.

The reports will be sent to the USTR in spring 2014.

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