AGOA’s Next Challenge: Agriculture
By BRIAN CORRY
WASHINGTON — The African Growth and Opportunity Act (AGOA) has still not had a significant effect on agricultural exports from sub-Saharan Africa. This is critical because the agricultural sector in Africa employs 60% of the population, and makes up a disproportionate percentage of African GDP. In 2009, agriculture made up 12.9% of African GDP— nearly quadruple the global average of only 3.2%. In order for AGOA to have widespread impact in spurring sustainable economic growth in Africa, America’s protectionist agricultural policies need to be reduced, and there needs to be technical assistance to get African agricultural goods to U.S. markets.
Although AGOA liberalized trade for thousands of non-agricultural products, liberalization of agricultural products was limited. Tariff reductions for agricultural products were mostly focused on items that were already being imported from sub-Saharan Africa such as cocoa, coffee, and rubber. These are not produced in large quantities in the United States and even before AGOA was enacted, tariffs on these items were not very high. In order for AGOA to be truly impactful, more agricultural tariff lines need to be added to allow greater duty-free, quota-free access to African agricultural products. This would also allow for greater value-addition for African exports. As it stands, a cocoa exporter in Cote d’Ivoire would not be able to competitively manufacture chocolate to export to the United States. Protectionist policies regarding sugar and milk imports make it so the only viable business model is the export of raw materials. If tariffs on a greater variety of agricultural products were lowered, it would not only increase imports but also create the conditions for greater value-addition.
Another barrier to entry for African agricultural exports are regulations from the U.S. government regarding the import of food products. The USDA has very specific packaging and quality standards that are required for the import of food, creating a technical barrier to trade. Even when exporters are eligible for AGOA, they may not have the technical knowledge regarding labeling standards. In a survey conducted by the United Nations Economic Commission for Africa, 73.4% of respondents indicated that technical assistance and capacity building on standards, sanitary, and phytosanitary measures would be one of the most beneficial improvements possible for the future of AGOA. It is clear that AGOA has been successful in increasing trade with Africa; however, in order for AGOA to reach its stated goal of promoting “stable and sustainable economic growth and development in sub-Saharan Africa,” the promotion of agricultural trade growth must be made its primary goal.