Will AGOA be a goer?

Author:Parker, Gillian
Position:Trade - African Growth and Opportunity Act - Statistical data
 
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A preferential trade deal with the US that has reportedly created 350,000 jobs since 2000 is set to expire in September. As Congress mulls over its renewal, many in Africa are watching anxiously.

As dawn breaks in Maseru, Lesotho, hundreds of textile workers make their way to work along a narrow dirt track lined with wooden shacks selling corn, hot tea and bread rolls.

"Wages are small and it is hard work but it is all we have," says textile worker, Winned Magala. "I am supporting many people with my wage alone," she adds before rejoining a line of people shuffling towards a nearby clothing factory.

US market concessions under the African Growth and Opportunity Act (AGOA) have attracted a wave of investors to operate in Lesotho, allowing its textile industry to flourish. But the future of thousands of livelihoods in Africa currently hangs in the balance as the US Congress mulls over the renewal of the preferential trade deal which is due to expire in September.

Former US President Bill Clinton sanctioned AGOA in 2000 with the aim of boosting trade and development in eligible African countries. The trade programme grants 39 sub-Saharan African countries duty-free access for around 6,400 different products --many of them garments--into the US market. By 2014, exports from Africa to the US represented about $30bn, creating an estimated 350,000 new jobs.

Before AGOA, the Lesotho textile and clothing industry employed about 20,000 people, with South Africa and Europe being the principal export market. But in the years following 2000, the focus shifted to the US. Employment in the sector rose to 55,000 with 100% of exports being facilitated under AGOA, and the industry is now the second-biggest employer after the government.

Petroleum-producing states have also benefited greatly from the deal, with the likes of Angola exporting over $4bn worth of products in 2014. South Africa meanwhile has been another sizable beneficiary from the trade deal, having made $1.7bn in export revenues last year.

AGOA has stimulated South Africa's automobile industry, creating 30,000 jobs, and had a similar effect on its citrus industry, creating 85,000 jobs. US government estimates suggest that the South African agricultural sector has the potential to expand their exports to the US by over $175m in the near future.

However, Congress is currently debating the deal's terms, and given that AGOA is a unilateral agreement, several African countries are beholden to the US...

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