March 22, 2023
US-Africa Trade Ties: African Countries Fear that AGOA will be Seriously Affected

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According to news sources the US and the sub-Saran African country, Kenya is holding negotiations towards seeking a possibility of entering into bilateral free trade agreement with each other. Since Donald Trump took over the charge as the President of the United States, Trump’s administration has focused on developing trade relationships with other countries on the basis of bilateral trade rather than unilateral trade. However, so far no agreement of bilateral trade between Kenya and the US has ever been executed. 

Experts from the field of trading are of the view that bilateral free trade agreements with smaller countries like Kenya who does not have a stable economy and that the country’s economy has not enough funds to fulfill the commitment made under the agreement, therefore such an agreement would substantially undermine the growth of Kenya. If both the countries decide to enter into the free bilateral trade agreement that it will directly affect the African continent’s efforts aimed towards building Africa’s own economic block through the African Continental Free Trade Area (AfCFTA).

People reported having started debating the issue of free bilateral agreement between the two countries and reminded of African Growth and Opportunity Act (AGOA), which was signed by former US President Bill Clinton in the year 2000. According to AGOA, the countries within the African continent were given the opportunity to export more than 65,000 duty-free products to the US, which were produced/manufactured within the continent, on the basis of unilateral agreements which resultantly allowed African countries a competitive edge in the global trading market.

Resultantly over a period of more than 20 years since the passing of the AGOA, the countries with the African region were able to grow sustainably wherein the private sector was promoted to create more jobs within the region otherwise there was an acute shortage of employment opportunities in the countries. The Act was though for a certain period of time however, since its passing, it has been extended twice and is applicable till 2025. 

However, due to the ongoing negotiations, it is feared amongst the African countries that AGOA has been seriously damaged because for the past four years US has suspended duty-free to Rwanda who was otherwise exporting apparel to the US. Similarly, the US also imposed various non-friendly tariffs upon aluminum and steel.

Apparently, the negotiations between the US and Kenya are still under process where no free trade bilateral agreement has been executed between the countries. However, the countries with the continent of Africa are under immense pressure that any further threats to AGOA will seriously damage the well-being of the entire region indirectly and due to the present pandemic going on, there are chances that the countries will not be able to sustain and will be compelled to face long-lasting challenges.

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