African Growth and Opportunity Act: Advancing the Role of Agriculture in US-Africa Trade

Signed into law by the President on June 29^th, the reauthorization of AGOA originally passed the Senate with a decisive 97-1 vote and the House 394 to 37. As the focal point and keystone for US-Africa trade relations, it is a preferential trade agreement created in 2000with the intent to stimulate economic development through export-led growth and help integrate Africa into the broader global economy.   While we applaud the 10-year renewal of such an important agreement for the development of African economies, the legislation is amissed opportunity to expand AGOA’s reach to benefit a wide range of industries and further foster diverse economic growth. Despite its crucial role for some sectors, such as natural resources, AGOA does not offer nearly as much to a sector that employs approximately 65 percent of Africa’s labor force: agriculture. Of Africa’s $52 billion in food and agriculture exports in 2012, less than 1 percent were destined for the US. In that same year, only 5 percent of the trade facilitated by AGOA was related to agriculture and food.

Congress, however, took an important step in the right direction by including an amendment to AGOA, which was introduced by Senate Agriculture Committee Chairman Pat Roberts (R-KS) and Ranking Member Debbie Stabenow (D-MI). The Roberts-Stabenow amendment aims to expand US technical assistance, especially to businesses that engage women farmers, by lifting the cap on the number of countries that can receive trade capacity support and broadening the type of technical assistance available. The amendment, which draws on concepts supported by The Chicago Council on Global Affairs, empowers the President to coordinate the executive branch on trade capacity-building efforts across federal agencies.

Despite this vast improvement to the legislation, more support for the agricultural industry is needed. From 2001 to 2013, petroleum products accounted for over 80 percent of US imports under AGOA.  While the share of non-petroleum products increased from 9 to 14 percent during the same period, the top three products were machinery and transportation equipment, textiles and apparel, and minerals and resources.

The Chicago Council’s recent paper on US-Africa trade relations, Grow Markets, Fight Hunger written by Non-Resident Senior Fellow, Andrea Durkin, proposes several means of amending AGOA and rethinking US-African trade in order to expand the role of agriculture and diversify beneficiaries. The report calls for a new approach to US-Africa trade centered around five goals addressing key barriers to the agriculture and food sectors:

The Chicago Council applauds Congress and the Administration for working together to pass AGOAand renew this flagship regional trade agreement.It is crucial to ensure technical assistance and trade capacity-building for farmers is included and that the role of agriculture within AGOA be expanded. We salute Congress for their bipartisan acceptance of this fundamental premise of international agriculture development.