Deal on US and Africa trade relationship is tentative at best
The fate of trade relations between the US and Africa is reaching a tipping point.
As a part of the government funding package, the Senate passed a short-term extension to revive AGOA, the US-Africa trade program.
But even if the package succeeds when it returns to the House in the coming days, there are jitters among African policymakers, manufacturers, and exporters that the relationship will be fractured for some time.
AGOA, the African Growth and Opportunity Act that started in 2000, gives eligible sub-Saharan African countries duty-free access to the US market for thousands of products, in sectors such as fuel, agricultural goods, apparel, and automotive manufacturing.
It’s been a bipartisan legislative initiative in the past, but the Trump administration’s upending of trade relations has scrambled the politics.
The wider spending package has been bogged down by DHS funding negotiations and potential restrictions on ICE in the wake of recent fatal shootings by agents in Minnesota.
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Although the House overwhelmingly passed a three-year AGOA extension last month, a late shift resulted in the House passage of an extension lasting only until the end of the year.
On the Senate side, there have long been significant supporters of a long-term extension, but the focus on the DHS stalemate left little time to push back on the AGOA extension timescale.
“A number of members of Congress would have liked to see the longer duration, but at this point further changes are unlikely,” said a Senate Democratic aide before the Senate passage on Friday. The aide did not want to be identified due to the sensitivity of the negotiations. With this extension, legislators want to “signal that Congress doesn’t want the program to expire” and that a push for a long-term reauthorization is on the way.
The Trump administration argues a one-year extension gives time for stakeholders to work on a deal “to modernize and align the program, or any future trade program with African trading partners, with the America First Trade Policy,” an administration official told Semafor.
Still, an extension through the end of the year is unlikely to reassure investors or ease concerns in countries that fear job losses without a long-term renewal.
Witney Schneidman, a former US deputy assistant secretary of state for Africa, called the proposed renewal “at best a holding pattern,” noting that firms are unlikely to make long-term commitments without greater policy certainty.
Oge Onubogu, director of the Africa Program at the Center for Strategic and International Studies think tank, told Semafor that the Trump administration’s penchant for tariffs, along with its emphasis on bilateral dealmaking over multilateral or regional negotiations, has prompted African governments to shift strategies.
“We see many African countries pivoting, either looking inwards and putting more energy towards the conversation around regional integration with the African Continental Free Trade Area or looking towards the European Union or China or elsewhere,” said Onubogu.
Step Back
Lawmakers are still divided on what the modernization of AGOA looks like.
Some favor stricter eligibility criteria tied to governance or foreign policy alignment while others argue expanded criteria would further weaken AGOA’s economic impact.
Schneidman said the exclusions hamper trade. “You don’t see China or the EU turning on and off trade relations,” he said.