According to Katherine Tai, the U.S. Trade Representative, a 22-year-old U.S. trade strategy that granted duty-free access to more than 40 African nations is no longer sufficient to support their development, and more investment is now necessary.
Tai said this following a meeting with African colleagues at the start of a summit of Sub-Saharan African leaders in Washington. He said that the African Growth and Opportunity Act (AGOA) has to be amended to encourage more fair and sustainable growth.
Tai claimed that ministers had told her at a recent conference organised by the U.S. Export-Import Bank that more investment and access to new markets were essential.
"We want you to engage with us on establishing... economic situations that are favourable to greater confidence for investors," the minister's statement, as reported by Tai, states.
After promising ministers she would conduct an "honest examination" of AGOA, which has facilitated trade between the United States and Africa for over two decades, Tai has finally started.
The AGOA expires on September 30, 2025, and was first passed in 2000 to support Africa's growth, development, and governance reforms. Another requirement of the programme is the elimination of trade and investment barriers in the United States.
She was "interested in addressing today's methods in which we can strengthen AGOA, including how we can increase the utilisation rates, particularly among smaller and less developed nations, as well as guarantee that the program's benefits completely reach all segments of society," according to Tai.
According to data conducted by the Brookings Institution and published last year, just about half of the AGOA-eligible countries have plans to fully utilise their benefits under the programme.
Tai claims that since the creation of AGOA, the world has seen significant change. Following the COVID-19 outbreak, supply systems were made vulnerable, Russia invaded Ukraine, and the climate calamity worsened.
She expressed optimism for AGOA because of its ability to serve as a "stepping stone to address regional and global concerns,", particularly in light of Africa's youthful and entrepreneurial population.
“The future is Africa, and engaging with this continent is the key to prosperity for all of us,” Tai said.
South Africa, the region’s most developed economy, and oil exporters Nigeria and Angola are among AGOA’s most notable winners.
Kenya has begun a non-tariff trade and investment engagement with Washington, which might lead to more comprehensive trade negotiations with the United States.
Tai announced on Monday that the United States would sign a memorandum of understanding with the African Continental Free Commercial Area, an organisation including 55 African countries, to begin discussions on developing the next stage of the trade cooperation between the two continents.