2000 | 2023 | |
---|---|---|
Total | $22.1 billion | $29.6 billion |
Crude oil | 67.7% | 29.3% |
Unworked diamonds & precious metals | 8.4% | 16.9% |
Ores, slag, and ash | 1.8% | 1.8% |
All else | 22.5% | 52.0% |
Note: Nigeria, Angola, Chad, Equatorial Guinea principally oil exporters; South Africa metals and automotive; Botswana and Namibia diamonds both cut/polished and unworked; Kenya, Ethiopia, Madagascar, Senegal, Ghana, Mauritius light manufactures, clothing, agriculture.
The quick story of U.S.-African trade since 2000: Americans buy less African crude oil, but more clothes, cocoa paste, flowers, wigs and hair extensions, shea butter, polished diamonds, auto parts, birdseed, and branded coffee. Crossing the Atlantic eastward, meanwhile, more American-made cars and tractors, telecom equipment, chicken and computer parts.
Where to next? Looking ahead at July’s “AGOA Ministerial Conference”, the 29 participating African governments expressed three policy-speak hopes:
Background: The AGOA law, passed in the last year of the Clinton administration, and last reworked in 2015, has two core components. The first, a tariff waiver, gives duty-free status to nearly all things grown or made in participating countries. (Currently 32 of the 49 sub-Saharan African countries.) The second, a large “convening” program, holds annual Trade Minister conferences (the Washington session in July was the 20th) along with business dialogues, civil society fora, etc. The hope was to create a much larger U.S.-African economic relationship, and to shift Africa’s trade away from heavy reliance on energy and metal ore exports toward more labor-intensive and stable manufacturing and agricultural goods.
How well has it worked out? In raw dollars, U.S.-Africa trade is larger than in 2000, but not spectacularly so. Americans bought $22.2 billion worth of African* goods in 2000 and $29.6 billion in 2023. America’s own exports to Africa have grown faster — $5.9 billion in 2000, $18.2 billion last year — but aren’t very large either. And looking out from Africa the U.S.’ place in trade seems relatively smaller than it was in 2000: where that year’s $22.2 billion was about 20% of Africa’s $112 billion in exports to the world, 2023’s $29.6 billion is about 7.5% of a larger $406 billion.
These bottom lines are a bit misleading, though, because they mix volatile (and falling) oil with more stable (and growing) farm and factory goods. As U.S. oil imports from Africa have dropped from $15 billion to $9 billion, everything else — the clothes, cocoa paste, shea butter, auto parts, worked diamonds, hair extensions, etc. noted above — has jumped from $7 billion to $20 billion. So outside the big continental oil-producers Nigeria and Angola, trade data often look pretty impressive. A quick table:
IMPORT SOURCE | 2000 | 2023 | Change |
---|---|---|---|
Sub-Saharan Africa |
$22.21 billion | $29.61 billion | +21% |
Nigeria | $9.68 billion | $5.97 billion | -38% |
Angola | $3.34 billion | $1.18 billion | -65% |
South Africa | $4.20 billion | $13.88 billion | +220% |
Ghana | $0.21 billion | $1.72 billion | +719% |
Kenya | $0.11 billion | $0.89 billion | +709% |
Madagascar | $0.16 billion | $0.72 billion | +350% |
Botswana | $0.04 billion | $0.57 billion | +1325% |
Ethiopia | $0.03 billion | $0.49 billion | +1533% |
Senegal | $0.01 billion | $0.16 billion | +1500% |
Thus, though China and more recently India long since overtook the U.S. as buyers of Africa’s oil and metal ores, Americans play a larger role in manufactured goods and farm products. In that sense, AGOA does seem to be fulfilling one of its main goals, and the Ministers have good reason to hope Congress will act soon to keep it going. Lots of ideas on next steps, and some background below on the Ministers’ “utilization” and “eligibility reviews” points along with some American thinking. Their Point 1, on the need for a renewal very soon, is timely and clear and doesn’t need much explanation.
* Using the “sub-Saharan” definition in AGOA — 49 countries — rather than the 55-country count of the African Union, which adds Egypt, Libya, Tunisia, Algeria, Morocco, and Western Sahara.
** Most don’t really need changes in the AGOA law, and the sad outcome of a 2020 attempt to rewrite the broader “Generalized System of Preferences” tariff waiver program for small and lower-income countries in a four-year-long lapse in the program coupled with endless arguments and tactical gambits – suggests it would be good to be cautious about big legal revision.
2024 AGOA Ministerial readout from the State Department and U.S. Trade Representative Office.
And for background, the USTR’s biennial reports on AGOA.
African perspectives:
African Trade Ministers on AGOA renewal, via the African Union.
“Utilization”: One of AGOA’s puzzles, highlighted in the Ministers’ comment on “utilization,” is that fewer countries use its tariff waivers than the program’s designers had expected. The clothing tariff waiver, for example, provides not only duty-free status but “rules of origin” which in theory make AGOA cheaper and easier to use than U.S. free trade agreements. (Clothes are typically high-tariff products in the United States – top AGOA clothing imports such as acrylic sweaters get tariffs as high as 32%, and unlike Central American countries using the “CAFTA-DR” free trade agreement, duty-free African clothes can be made of fabric from anywhere in the world.) But only six of the 32 current AGOA countries — Ghana, Kenya, Lesotho, Madagascar, Mauritius, Tanzania — sell any substantial amount of the clothes that show up in American outlets and malls. Their $1.14 billion in clothing exports last year made up 99.6% of all AGOA clothing.
Why the relatively low use of this “centerpiece” AGOA feature? U.S. government analysis and outside observers see at least part of the reason in African policies. Some AGOA-country governments haven’t developed the implementation plans the program suggests. Some have geographical and cost disadvantages tariff benefits can’t overcome, as land-locked countries with shaky road and air connections to customers. And many have problems with port management, infrastructure quality, and import limits that raise production costs and erode competitiveness, and can be fixed at home.
Eligibility reviews: The Ministers, though, aren’t wrong to highlight “eligibility reviews” as a contributing factor. Since 2016, AGOA’s membership has shrunk from 38 countries to 32, as U.S. administration has removed countries for failure to meet program eligibility rules on rule of law, human rights, and other topics. (Eight countries on the 2016 ‘eligible’ list are gone: Burkina Faso, Cameroon, Ethiopia, Gabon, Guinea, Mali, Niger, Uganda; two others, Mauritania and the Democratic Republic of Congo, have returned.) Each decision had its own logic and legal background of course. But experience also shows that removals have costs. As a local example, Eswatini’s removal in 2014 over labor issues led to the collapse of AGOA garment trade and employment; they haven’t revived despite Eswatini’s return to the program in 2017. And in general, the Ministers are probably right to believe that this level of volatility reduces buyers’ confidence in AGOA as a long-term economic and developmental policy.
As an example, here are the January 2024 changes, with Mauritania back on the eligibility list and Gabon, Niger, and Uganda removed.
From the U.S. government:
U.S. “next-steps” ideas typically involve some way to manage “graduation” of countries reaching high-income status (as required under a different “preference” law, the Generalized System of Preferences), and seeking more reciprocal relationships with countries at higher income levels and with a more diversified industry. The Obama administration’s 2016 “Beyond AGOA”, even at eight years old, remains fresh.
And next steps:
A renewal proposal from Sen. Chris Coons (D-Dela.) and James Risch (R-Idaho).
June hearings on AGOA renewal from the House Ways and Means Committee and the Senate Finance Committee.
Assessment from Stellenbosch-based TRALAC (Trade Law Centre).
… while the International Monetary Fund looks at the Africa-China economic relationship.
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.