In a recent event, Senate Finance Committee Chairman Orrin Hatch (R–Utah) emphasized the importance of the timely renewal of the African Growth and Opportunity Act (AGOA):
[W]e have to renew [AGOA] before the end of this summer. As you all know, the AGOA program encourages African countries to further open their economies to international trade and investment in hopes of achieving sustainable economic development… Trade with beneficiary countries has more than tripled since AGOA’s enactment in 2000, and U.S. direct investment in Africa has grown almost six-fold in that time… We need to do more to ensure the program reaches its full potential.
AGOA is a critical feature of America’s economic engagement with Africa, boosting U.S. investment on the continent, fostering African integration in the world trading system, and providing new opportunities for American consumers to enjoy a variety of products at competitive prices. Those benefits are at risk not just because of the threat that AGOA might not be renewed, but also because of the delay in congressional action. Each day that AGOA is not reauthorized leading up to its September 2015 expiration is a day of uncertainty about the future of American business on the continent. Businesses are already making investment decisions based on whether they believe AGOA will be renewed. Uncertainty generated by delaying AGOA renewal is causing American companies to question whether to continue or expand their operation in Africa. This impairs Africa’s ongoing development and risks undermining the goodwill that AGOA has generated for the U.S. on the continent.
Over its 15-year history, AGOA has garnered broad support across the political spectrum and effectively has served as the cornerstone of America’s trade and investment partnership with the continent. Both Congress and the Obama Administration have repeatedly expressed their intention for a “seamless” renewal, but the time to achieve that is running short. As pointed out by Fred Oladeinde, chair of the AGOA Civil Society Organization Secretariat, “Waiting until the last minute to reauthorize the law does not instill the sort of confidence needed to attract private investment.”
Renewing AGOA, or better yet enhancing it with provisions to transition it into a true free trade agreement, would maintain America’s economic engagement with Africa and establish a strategic vision for building AGOA into a dynamic economic partnership with the continent.