Aug. 12 (Bloomberg) -- American companies should share the benefits of trade with sub-Saharan Africa as the U.S. examines extending duty-free access for imports from many nations on the continent, Trade Representative Michael Froman said.
The U.S. African Growth and Opportunity Act, approved by the U.S. Congress in 2000 and extended in 2004, is meant to boost economies on the world’s poorest continent. The law eliminates import levies on products ranging from textiles to manufactured items for about 40 sub-Saharan African nations that meet criteria including good governance and poverty reduction. AGOA may be renewed before it expires in 2015.
“How do we think about AGOA in the context of two-way, reciprocal trade agreements?” U.S. Trade Representative Michael Froman said, in copy of speech handed to reporters today in Ethiopian capital, Addis Ababa.
“As we think about renewing AGOA, we certainly do not want U.S. firms to be put at a competitive disadvantage in the rapidly growing and dynamic African market,” Froman said.
The U.S. is cognizant of the terms of free trade deals being discussed by the European Union and some Africa nations, Froman said. The EU is negotiating to give preferential market access, known as Economic Partnership Agreements, across most of the continent before an October 2014 deadline.
AGOA doesn’t go far enough in helping African exporters become more competitive, President Barack Obama said last month on a three-nation African tour. The U.S. also wants to help African countries ease trade and investment barriers by simplifying customs procedures and improving the flow of goods across borders, among other measures, Obama said.
The U.S. and the five-nation East African Community, a common market of about 135 million people, are discussing trade facilitation and investment agreements to strengthen commercial ties, Froman said today in a separate statement.
U.S. imports from sub-Saharan Africa fell 33 percent to $49.7 billion last year as shipments of oil, mineral fuel, precious stones and metals declined. Of that amount, $34.9 million was shipped under the terms of AGOA, according to the U.S. Department of Commerce’s website. Total two-way trade was $72.3 billion, down 24 percent from 2011.
Oil remained the largest portion of AGOA imports accounting for 86 percent of the total. Under AGOA, the top exporters were Nigeria and Angola, the largest oil producers in Africa, the continent’s biggest economy, South Africa, as well as Chad and Gabon, according to the statement.
AGOA, which is being reviewed by U.S. and African officials in Addis Ababa today and tomorrow, should be extended another 15 years to 20 years, South Africa’s Deputy Trade and Industry Minister Elizabeth Thabethe said in an interview today in the city.
“We feel that will give us space to do a lot of development and for industrialization to take place,” Thabethe said.
To contact the reporter on this story: William Davison in Addis Ababa at email@example.com