US companies want trade certainty in Africa, Biden official says

by MMC
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AGOA program expires in 2025

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Industries are leaving China

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Africa seeks to become a new investment destination

By Joe Bavier

JOHANNESBURG, Nov 4 (Reuters) – U.S. companies want certainty about the future of Washington’s flagship Africa trade agenda, as they reduce dependence on China and consider investments on the continent, a Biden administration official said Saturday.

In the wake of the global pandemic and the supply chain issues it has caused, companies across various industries are moving operations out of manufacturing powerhouse China in an effort to reduce risks to their businesses and foster resilience.

The once-in-a-generation change comes as the African Growth and Opportunity Act (AGOA), a program that grants exports from eligible African countries duty-free access to the U.S. market, is set to expire in 2025 .

U.S. officials were in Johannesburg, South Africa, on Saturday to conclude three days of negotiations with African trade ministers on the future of AGOA.

“US companies want AGOA reauthorized. Regardless of the sector, they have made that very clear,” British Robinson, who leads the US administration’s Prosper Africa initiative, told Reuters in margins of meetings.

Prosper Africa was established in 2019 to strengthen economic ties between the United States and Africa and deepen bilateral trade and investment.

As U.S. companies increasingly look to Africa as an alternative investment destination as they move away from China, Robinson said they need reassurance from an expansion of the AGOA.

“(It’s) extremely important. That’s what they told us,” she said, adding that the future of the program was ultimately in the hands of the U.S. Congress. “We have no control over that.”

Last year, under this program, more than $10 billion in African exports entered the United States duty-free. African countries are pushing for Congress to pass an early 10-year extension of AGOA without changes to reassure businesses and investors.

The initiative, initially launched in 2000, has long enjoyed bipartisan support from U.S. lawmakers, who view it as key to countering Chinese influence in Africa.

But there are divisions in Washington over whether AGOA needs updating and how best to change it.

U.S. Secretary of State Antony Blinken said Friday the White House wants to work with Congress to improve AGOA and not simply renew it without changes.

U.S. House Foreign Affairs Committee Ranking Member Gregory W. Meeks, a Democrat from New York, and Chairman Michael McCaul, a Republican from Texas, said Friday they also support the enhancement of AGOA.

“But we believe the primary consideration should be ensuring a successful and timely reauthorization,” they said in a statement.

African governments and U.S. industry associations fear that attempts to radically change AGOA risk bogging down renewal of the program in a Congress that already struggles to pass even the most critical legislation.

Namibian Trade Minister Lucia Iipumbu said African governments had communicated a unified position on AGOA and she was confident in its reauthorization.

“We shouldn’t worry about what’s happening in other people’s houses as long as we put our house in order,” she said.

(Reporting by Joe Bavier; editing by Clélia Oziel)

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