As Congress scrambles to prevent a partial government shutdown, the House Appropriations Committee released the text of its much-awaited continuing resolution (CR) late on Tuesday night. Notably absent in the 1,547-page document was funding to extend the African Growth Opportunity Act (AGOA). This is highly concerning. The program is now nine months from expiry. The clock is ticking. If the AGOA ship sinks, so will the U.S. relationship with Africa.
Fingers are pointing every which way for what will prove to be an economic and geopolitical catastrophe for the United States should AGOA lapse. By the time this article is published, perhaps there will be a legislative resolution, but as of writing, that appears unlikely.
The program has received wide-ranging bipartisan support for most of its existence, and there were bipartisan efforts made for its renewal over the past year. Worthy of particular praise, Senators Chris Coons (D-DE) and James Risch (R-ID) introduced the AGOA Renewal and Approval Act of 2024 in April.
However, despite the Biden White House releasing a statement in strong support of the reauthorization of the program last year, the Biden administration never advanced a coherent strategy to deepen U.S.-Africa trade and investment ties. Talks with Kenya on the Strategic Trade and Investment Partnership were meant to be the flagship of a new approach but never produced an agreement, and there was no serious effort to engage on a broader agenda. The result is a strategic-level failure that threatens to leave not just AGOA, but the African continent forgotten by the United States. Beyond the drama surrounding the CR, the bottom line of AGOA expiration is simple: the United States and Africa lose; China and Russia win.
Since its enactment in 2000, AGOA has played a pivotal role in transforming the U.S. sub-Saharan African relationship from one that is primarily aid-based to a mutually beneficial business partnership. For over 25 years, the act has allowed for duty-free access to the U.S. market for over 1,800 products from at least 32 eligible sub-Saharan African countries, spanning sectors such as textiles, apparel, food, and machinery.
The ease of access to U.S. markets due to AGOA has stimulated economic growth and development across Africa. The program directly has generated 300,000 jobs on the continent, and indirectly sustains as many as 1.3 million African jobs related to AGOA-dependent businesses. AGOA has led to major growth in sectors like apparel, with exports to the United States nearly doubling over 20 years. These African exports have helped lower costs for Americans while also creating important new markets for American inputs, like machinery and cotton.
Beyond economic considerations, through its eligibility requirements, AGOA incentivizes deeper economic and political reforms, including eliminating barriers to U.S. trade and investment, enacting policies to reduce poverty, combating corruption, and protecting human rights. AGOA has been a tool that furthers American economic interests and American values. It is a vehicle to promote the liberal international order.
Yet the United States has dithered and ceded the mantle of global leadership to the likes of Xi Jinping. Almost all African states have forged or deepened economic ties with Beijing under the framework of the Belt and Road Initiative, allowing China to overtake the United States as the continent’s largest trading partner and equity investor. The volume of U.S. trade with African states is just one-fifth the size of China-Africa trade, and the United States currently trails behind China, Russia, and the United Arab Emirates (UAE) in foreign direct investment (FDI).
I warned policymakers just six months ago in my testimony before the House Ways and Means Subcommittee on Trade that “champagne corks will pop in Beijing and Moscow over our failure to renew AGOA.” Unfortunately, the actions taken earlier this week have moved that possibility closer to reality. Xi Jinping is holding the corkscrew in his hand. Will the United States let him use it?
To be clear, AGOA as it exists today is not perfect. Its administration has been clunky, with annual reviews removing and reinstating countries in an often-confusing process that has sometimes penalized factory workers more than rulers for policy decisions the United States didn’t like. It also doesn’t include North Africa and threatens to “graduate” countries that succeed economically, effectively penalizing them for using programs like AGOA to develop economically. The biggest knock on the program is that it hasn’t been used as much as initially hoped. That is often combined with the observation that, in the quarter century since the program’s inception, the world has changed: the digital economy has boomed, and the United States has not taken the opportunity to keep pace by expanding its relationship beyond AGOA to address the development of digital and other service sectors in the dynamic African market. I have been vocal about the need to update the U.S. relationship to respond to these shifts. However, given the state of the current Congress, this is a game of trade-offs. If the United States wants a twenty-first century relationship with Africa and if it wants to properly compete with China, AGOA must be in its tool kit, and extending the program for at least another 10 years without fussing over updating it is better than letting the program fall to the wayside. Forgetting AGOA from the CR so close to its expiration sends a terrible signal to Africa: your relationship is not important to the United States.
Moreover, Africa presents a massive business opportunity for U.S. companies. The continent is the world’s most rapidly growing market, with its current population of 1.3 billion expected to nearly double within the next 25 years, reaching 2.5 billion people. The sub-Saharan region needs tens of millions of new jobs for young people to prepare for the looming youth population boom, which, under the right conditions, could create a “demographic dividend” where a growing, educated, and healthy population coupled with good governance could accelerate economic growth. Africa is already putting in the hard work to realize this potential through the African Continental Free Trade Agreement (AfCFTA), combined with innovative programs to drive development through key sectors like automotives, agribusiness, information and communication technology (ICT), and transportation—all areas that represent key U.S. economic strengths, and in which Africans are seeking U.S. partners. As AfCFTA creates regional and continental value chains, access to markets like the United States through programs like AGOA have never been more important. If AGOA expires, it is African jobs, American companies, and American consumers that will be hurt, including by foregoing the United States’ most appropriate tool to engage with Africa’s evolving market.
The second Trump administration and the next Congress have an opportunity to remedy the situation. The first step should be renewing AGOA early, ideally before the February 15–16 African Union Heads of State Summit. Thanks to the Risch–Coons bill, the end product of serious thinking is already on the table. This would broadcast a powerful message that the United States is interested in partnering with Africa to expand trade and investment ties.
A Trump White House also has an opportunity to go “beyond AGOA” with a broader engagement that would address the key sectors likely to drive African development, including critical minerals, ICT, and health. Washington would be best served by engaging with African leaders to come up with a practical program over the next six to nine months that could set the United States on a truly strategic course with Africa.
In an era of accelerating great power competition, AGOA has never been more important to U.S. strategic interests. Africa is on track to be increasingly consequential in the global economy. With a fast-growing population, ample natural resources, and the world’s largest free trade area, the continent has a dynamic economic landscape with immense potential for private sector growth, foreign commercial investment, and sustainable development. With AGOA, the United States possesses a promising tool to both support and benefit from Africa’s economic ascendancy. U.S. competitors in Europe, the Middle East, and Asia have not missed the opportunity to capitalize on Africa. The United States cannot fight something with nothing. AGOA is part of the United States’ something. It must be renewed.
Daniel F. Runde is a senior vice president, director of the Project on Prosperity and Development, and holds the William A. Schreyer Chair in Global Analysis at the Center for Strategic and International Studies in Washington, D.C.
