AGOA, set to expire in September 2025, plays a key role in bolstering economic ties between the US and eligible African countries. Credit: Shutterstock

Senators Chris Coons and James Risch have earned praise from the AAFA for their introduction of the AGOA Renewal and Improvement Act of 2024 which aims to extend the programme’s lifespan from 2025 to 2041, providing businesses with the necessary stability to invest in Sub-Saharan Africa.

AGOA, described as the “cornerstone” of US economic engagement with Sub-Saharan Africa stands as a critical trade preference programme facilitating duty-free access to the US market.

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“As companies work to diversify away from China today more than ever, immediate and long-term renewal of AGOA for a 16-year period would be incredibly impactful and timely,” said AAFA president and CEO Steve Lamar. “AGOA renewal would bring quality work opportunities for African workers, many of whom are women, as companies commit to retain or grow orders from African factories as vital partners in their sourcing matrices.”

AGOA, set to expire in September 2025, plays a key role in bolstering economic ties between the US and eligible African countries and has effectively reduced trade costs, spurred investment, and catalysed sustainable economic development across the region.

The proposed AGOA Renewal and Improvement Act of 2024 aligns with the 16-year sunset provision embedded in the US-Mexico Canada Agreement (USMCA), further underlining the strategic importance of AGOA in fostering long-term economic partnerships.

Additionally, AGOA serves as a pivotal link to broader trade agreements such as the African Continental Free Trade Area (AfCFTA) and the US-Kenya Strategic Trade and Investment Partnership (STIP).

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Beth Hughes, vice president of trade and customs policy at AAFA, highlighted the urgency of the situation, cautioning against the potential repercussions of delaying AGOA renewal. She said: “Sourcing decisions are already being made for goods that will be shipped after AGOA’s current expiration.

“As we fast-approach the September 2025 expiration date, we do not want to see trade begin to drop off as sourcing is shifted away from African countries. The current expiration of the Generalized System of Preferences – which we are hoping will also be renewed for a long term during 2024 – is fuelling speculation that a similar fate awaits AGOA. Action now, well before the programme expires, eliminates that uncertainty.”

At the sidelines of the Source Fashion show in London in February, the president of Ethiopia’s Hawassa Industrial Park Investors Association (HIPIA) Hibret Lemma, confessed to Just Style that two years on from Ethiopia losing access to the AGOA trade agreement, the country is just at the start of its shift away from relying solely on the US for its garment exports.