African Growth and Opportunity Act (AGOA-III): An Inside View.

In this chapter, I will be examining AGOA III. AGOA stands for the African Growth and Opportunity Act. Importantly, AGOA is a United States law; it is not an agreement. I mention this because people regularly ask question about US agreements, "such as AGOA". AGOA is not an agreement, it's a law, and it's a United States law. President Clinton signed the act into law in May 2000, and it started to take effect later in that year. However, when we are sure trade statistics under AGOA, the starting point is generally January 2001, because it works on a calendar year cycle. The original legislation was to be in effect until 30 September 2008. There were a lot of skeptics at the beginning; people did not understand the motivation for the legislation, and what it would lead to. In fact, some countries were not in favour of it. But it was the result of a long process. Comparatively, if you look at the United States' trade relations with the rest of the world, there are preferential agreements with the Pacific countries; there is a special relationship with the Asian countries under the Asian and Pacific Economic Cooperation Forum (APE); there is the Caribbean Based Initiative (CBI); and there is the North American Free Trade Agreement (NAFTA). As can be seen there was a gap in terms of links with Africa. All that was in place was a general programme of dealing with developing countries and the least developed countries (LDCs) known as her Generalized System of Preferences (GSP). Most African countries were covered by the GSP. This programme did encounter some problems, because the GSP is a preferential programme to allow duty-free treatment for imports into the United States from developing countries. But there were some hurdles to get there, and if a country did well it could graduate from the GSP as it was considered that it no longer needed preferential treatment.