Agoa waiver extension approved

The World Trade Organisation’s Goods Council has approved a request from the US for the extension of the waiver of the Africa Growth and Opportunity Act (Agoa).

The waiver means that goods from African countries will continue to have free access to the US market and are exempt from the most favoured nation and non-discrimination provisions under the WTO’s General Agreement on Tariffs and Trade.

The US enacted legislation in June 2015 extending the Agoa programme for 10 years, or until 30 September 2025.  The waiver will run until the expiry of the programme.

It is estimated that with the approval, trade under Agoa in the East African countries will bring in $100 million in new investment to the region, which will create about 10,000 jobs in the period through to 2019.

Imports of goods under Agoa provisions totalled $11.8 billion in 2014. Over 91 per cent of US imports from Agoa-eligible countries entered the US duty-free under the Generalised System of Preferences (GSP), or other zero-tariff provisions, it added.

According to Nelson Ndirangu, director of economic affairs and international trade at Kenya’s Ministry of Foreign Affairs and International Trade, the waiver had to be approved because it is inconsistent with the most favoured nation obligation.

“Programmes such as the GSP, under which developed countries grant preferential tariff rates to developing country products, require a waiver by WTO because they accord some countries more favourable tariff treatment,” said Mr Ndirangu.

Agoa enables about 6,500 commodities from sub-Saharan African countries to enter the US market on a quota- and duty-free arrangement.

Analysts say the preference regime has not fully achieved its intended objectives as trade between Africa and the US remains limited and highly concentrated in certain sectors. Currently, only 1 per cent of US imports come from the 39 African countries benefiting from Agoa.