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Textile and apparel exports from Kenya to the US have grown from about USD 50 million when AGOA was first introduced to around USD 500 million today
After 25 years, the African Growth and Opportunity Act (AGOA) has officially expired on Tuesday, leaving the future of trade between the United States and Africa in uncertainty.
The multilateral agreement has given thousands of products from African nations duty-free access to US markets since it was introduced in 2000.
White House officials say President Trump supports a one-year renewal of the law but the clock is ticking and a lot hangs in the balance. Advocates say it will also be bad for US firms – restricting choices and raising prices on imported raw materials. The law’s only realistic path for renewal is to be attached to a stopgap funding bill Republicans are pushing to keep the US government open beyond Tuesday. For many African businesses, their ability to stay open is also at stake.
In Kenya, it has allowed the country’s textile and apparel sector — makers of jeans, for instance — to effectively compete with Asian exporters such as in Bangladesh and Vietnam.
Textile and apparel exports from Kenya to the US have grown from about USD 50 million when AGOA was first introduced to around US$500 million today.
In Kenya, more than 66,000 people, many of them women, were employed through now-vulnerable textile and apparel exporters to the U.S. In the garment districts of Nairobi, job cuts and fears over livelihoods have already begun.
Kenya is not the only country which has dependence on the AGOA. Countries like South Africa, Lesotho, Nigeria, etc. exports significantly to the US market through the AGOA route. Experts also feel that the scheme, even if it is rolled over, may not operate in the same way as it was in the earlier dispensation. It may become an effective tool with the US Administration to bring more countries under its fold.
AGOA had also given African countries hope that major elements of their export economies would be exempt from blanket tariffs of 10% — and in some cases much higher — announced by the US earlier this year.
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Experts say several African economies are likely to face the adverse effects of both AGOA’s end and Donald Trump’s new tariffs.
