US businesses want certainty about the future of Washington’s flagship trade program for Africa as they reduce their reliance on China and consider investing in the continent, a Biden administration official said on Saturday.
In the wake of the global pandemic and the supply chain headaches it has caused, companies across a range of industries are moving their operations out of manufacturing powerhouse China in a bid to de-risk their businesses and build resilience.
The generational change comes as the African Growth and Opportunity Act, a program that grants exports from eligible African countries duty-free access to the US market, is set to expire in 2025.
US officials were in Johannesburg, South Africa on Saturday to wrap up three days of talks with African trade ministers on the future of AGOA.
“American businesses want AGOA reauthorized. Regardless of the sector, they have made it very clear,” Britain’s Robinson, who heads the US government’s Prosper Africa initiative, told Reuters on the sidelines of the meetings.
Prosper Africa was established in 2019 to strengthen US-Africa economic ties and deepen two-way trade and investment.
While US companies are increasingly looking to Africa as an alternative investment destination as they move away from China, Robinson said they need the assurance of an AGOA extension.
“(It is) extremely important. That’s what they told us,” he said, adding that the future of the program is ultimately in the hands of the US Congress. “We have no control over that.”
More than $10 billion worth of African exports entered the United States duty-free last year under the program. African countries are pushing Congress to approve an early 10-year extension of AGOA without changes to reassure businesses and investors.
The initiative, originally launched in 2000, has long enjoyed bipartisan support from US lawmakers, who see it as critical to countering Chinese influence in Africa.
But there are divisions in Washington over whether AGOA requires updating and the best way to amend it.
US Secretary of State Anthony Blinken said on Friday that the White House wants to work with Congress to improve AGOA, not just renew it without changes.
House Foreign Affairs Committee Ranking Member Gregory W. Meeks, D-New York, and Chairman Michael McCaul, R-Texas, said Friday they also support improving AGOA.
Published in The Express Tribune, November 5u2023.
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