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The writer is a senior fellow and director of the Africa programme at the Carnegie Endowment for International Peace
It is often said that Africa does not matter to America. Unlike China, the US does not pursue a policy of exporting surplus industrial capacity to low-income regions of the world. Accounting for less than 2 per cent of US global commerce, Africa remains more the target of aid programming than an economic priority for Washington.
This is the context in which to consider the future of the US trade programme, the African Growth and Opportunity Act. Agoa provides duty-free access to the US market for exports across 1,800 product lines from eligible African countries. It is meant to help increase trade and investment with the continent, promote sustainable economic growth and encourage the rule of law and market-oriented reforms. Because the programme expires in 2025, there are discussions under way as to whether it should be reauthorised or left to quietly die.
The idea of allowing Agoa to expire is not as unpopular as one might think. Since the programme’s launch in 2000, Africa’s minuscule share of US global trade has barely budged. The aggregate US-Africa trade volume reached a peak of $142bn in 2008 and has been declining since, falling to $72bn in 2022. Given this trend, some argue that Agoa should be replaced by a few bilateral trade agreements with countries such as Kenya and South Africa.
But to do that would be a strategic blunder. In an era of renewed great power competition, a revitalised US-Africa trade relationship will be crucial. For some time, China has been steadily expanding its commercial engagement with Africa, becoming the continent’s largest bilateral trade partner in 2009.
However, Africa has a significant trade deficit with China (it stood at roughly $47bn in 2022). Since it is aimed specifically at increasing African exports to the American market, Agoa hands the US a latent advantage in its competition with China, given its potential for helping African countries reduce pressures on their foreign exchange supplies and government budgets.
Agoa is the most politically acceptable policy lever the US has to provide a competitive edge over China on the continent. The current aversion of significant numbers of both Democrats and Republicans to free trade means there is no appetite for negotiating new deals with any region of the world. Donald Trump’s “America First” approach led to the US abandoning the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which would have created the world’s largest free trade area. The Biden administration has shown similar protectionist instincts, with national security adviser Jake Sullivan distancing the US from the “international economic project of the 1990s” of reducing tariffs. In this context, Agoa is the best bet for strengthening trade relations between the US and Africa.
However, for it to succeed in this geopolitically fraught era, Agoa must be recast to advance American strategic interests in synergy with African development priorities. First, a key objective of reauthorisation should be the diversification of US sources of “critical” minerals supplies. Agoa can be a tool for expanding the existing minerals trade between the US and Africa by encouraging investment from G7 countries in the refining and processing that African countries require before export of critical minerals for final use in battery packs and solar panels.
Second, Agoa should have a narrower focus on achieving specific geostrategic commercial goals rather than a wide array of governance-related objectives. Consider that since 2021, the Biden administration has expelled a record eight African countries from Agoa for governance challenges, while human rights infractions in countries such as India and Saudi Arabia have not elicited a punitive response. The Treasury department’s Office of Foreign Assets Control is the best vehicle for imposing sanctions on perpetrators of electoral or human rights abuses, rather than suspending Agoa privileges, which cripples nascent export-oriented industries, as in the case of Ethiopia recently.
Finally, Agoa should be rebranded. I propose changing its name to the Strategic Economic Partnership with Africa, or the Step with Africa Act, to convey the shift from a quasi-aid instrument to a strategic trade partnership fit for today’s geopolitical realities.
Like the rebranding of Nafta as the US-Mexico-Canada Agreement, “Step with Africa” could galvanise powerful new supporters to ensure the US does not abandon its trade relationship with Africa.
