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US Reinstates Mali's AGOA Benefits

by Mike Godfrey, Tax-News.com, Washington

30 December 2013


United States President Barack Obama has made his annual determination regarding country eligibility for the African Growth and Opportunity Act (AGOA) in 2014, and has reinstated Mali's eligibility for its benefits with effect from January 1, 2014.

In addition to continuing the eligibility of the 39 current beneficiary countries, the addition of Mali will mean that 40 of the 49 potentially eligible countries in sub-Saharan Africa will now be eligible to receive benefits under AGOA in 2014.

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 recently initiated a review of how AGOA could be improved to boost trade with and within Africa.

"We believe that AGOA has enhanced economic progress, promoted stability, and improved the business environment for the benefit of both African and American firms," said US trade Representative Michael Froman. "We welcome the progress that Mali has made and look forward to further engagement with AGOA beneficiary countries."

The reinstatement of Mali is an outcome of a review that the Administration conducts annually to examine whether each country already 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 internationally recognized worker rights, and efforts to combat corruption."

In January 2013, President Obama determined that Mali was ineligible for AGOA because of a government coup in March 2012. In July 2013, Mali inaugurated a democratically-elected president. It is seen that President Keita's new Government has focused on implementing market-based reforms, investing in infrastructure and human capital, and has pledged to address public sector corruption, combat human rights abuses, and strengthen the rule of law.

As part of this year's review of countries, the US Government also took special note of its continuing concerns regarding workers' rights issues in Swaziland. In May 2014, the US government will conduct an interim AGOA eligibility review of Swaziland, the results of which will be reflected in a recommendation to the President regarding Swaziland's continued AGOA eligibility.

TAGS: tax | business | Swaziland | public sector | law | tariffs | Mali | United States | import duty | trade | Africa

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