Obama Makes AGOA Beneficiary Changes

by Mike Godfrey, Tax-News.com, Washington

02 January 2015

United States President Barack Obama has made his annual determination regarding country eligibility for the African Growth and Opportunity Act (AGOA), and has reinstated Guinea-Bissau's eligibility for its benefits, but withdrawn those of South Sudan and The Gambia, with effect from January 1, 2015.

At the center of the AGOA are its substantial trade preferences that, along with those under the US Generalized System of Preferences tariff treatment and its third country-fabric provision, allow duty-free treatment for almost all goods produced in AGOA-eligible countries – approximately 6,800 products – to enter the US market duty free.

The AGOA is currently in effect until September 30, 2015. It has, since 2000, contributed to more than doubling trade with eligible African countries that are now, in general, asking for a longer term extension, and President Obama has initiated a review of how AGOA could be improved to boost trade with and within Africa.

The reinstatement of Guinea-Bissau and withdrawal for South Sudan and The Gambia are an outcome of a review that the Administration conducts annually to examine whether each country eligible for AGOA benefits has met or made "continual progress" during the year in meeting AGOA's eligibility criteria, which include the "establishment of a market-based economy, rule of law, economic policies to reduce poverty, protection of human rights and worker rights, and efforts to combat corruption."

In a cryptic statement, the Gambian Government reacted by "congratulating" the US Administration on its removal from the list of eligible countries under AGOA, "which Act The Gambia has never benefitted from in the first place, since [it was] designated as a beneficiary sub-Saharan African country on March 28, 2003."

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