The African Growth and Opportunity Act, Exports, and Development in Sub-Saharan Africa

28 Pages Posted: 20 Apr 2016

Date Written: August 1, 2006

Abstract

The African Growth and Opportunity Act (AGOA) is the flagship of U.S. commercial and development policy with Sub-Saharan Africa. This paper looks at the impact of the trade preferences that are the central element of AGOA on African countries' exports to the U.S. and puts them in the perspective of the development of the region. The paper finds that, while stimulating export diversification in a few countries, AGOA has fallen short of the potential impetus that preferences could otherwise provide African exporters. The impact of AGOA would be enhanced if preferences were extended to all products. This means removing tariff barriers to a range of agricultural products and to textiles and a number of other manufactured goods. There also needs to be a fundamental change in approach to the rules of origin. Given the stage of development and economic size of Sub-Saharan Africa, nonrestrictive rules of origin are crucial. For all countries in Africa, those that have and those that have not benefited from preferences, there are enormous infrastructure weaknesses and often extremely poor policy environments that raise trade costs and push African producers further away from international markets. Effective trade preferences (those with nonrestrictive rules of origin) can provide a limited window of opportunity to exports while these key barriers to trade are addressed. But dealing with the barriers is the priority.

Keywords: Free Trade, Economic Theory & Research, Trade Policy, Agribusiness & Markets, Markets and Market Access

Suggested Citation

Brenton, Paul and Hoppe, Mombert, The African Growth and Opportunity Act, Exports, and Development in Sub-Saharan Africa (August 1, 2006). World Bank Policy Research Working Paper No. 3996, Available at SSRN: https://ssrn.com/abstract=927139

Paul Brenton (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Mombert Hoppe

World Bank ( email )

Washington, DC 20433
United States
+1-202-4587007 (Phone)

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