The Contested Eligibility of South Africa for AGOA Benefits
There is a longstanding debate over the compliance of South Africa with the eligibility criteria for preferential trade benefits under the African Growth and Opportunity Act (AGOA). The debate revolves around two sets of concerns. One is barriers to US trade. The other is actions that undermine US national security and foreign policy interests. To address these concerns, Senator Chris Coons has proposed a mandatory out-of-cycle review of the eligibility compliance of South Africa. Unfortunately, important aspects of this proposal have been misconstrued in the South African media. This reveals a problem that demands more attention. There is a high risk of misinformation and disinformation being spread on the US legislative efforts to extend AGOA and exercise more oversight on South Africa.
AGOA provides unilateral preferential trade access to the United States market for select imports from beneficiary countries in Sub-Saharan Africa. Per the United States International Trade Commission (USITC), the agreement is intended to serve as an extension of the US Generalized System of Preferences (GSP) by providing duty-free access for additional products and effectively removing access limitations for others. To qualify for beneficiary status, a country must request to join AGOA. Then, the country must meet a specific set of eligibility criteria. First, it must be in the statutory-defined region of Sub-Saharan Africa. Second, it must be GSP-eligible. Third, it must meet the following sets of criteria:
- Economic criteria related to market economy, economic reform, and elimination of barriers to US trade;
- Foreign policy and national security criteria are related to international terrorism, US national security, and US foreign policy;
- Labor and human rights criteria related to worker rights, forced labor, child labor, and human rights;
- Political criteria related to the rule of law, political pluralism, and anti-corruption;
- Poverty reduction criteria are related to policies aimed at reducing poverty.
The President of the United States is responsible for determining whether a particular country meets the eligibility criteria for preferential trade benefits under AGOA. Every year, the White House conducts a standard review and transmits the findings to the United States Congress. In addition, the President has the right to conduct an out-of-cycle review. This option has been exercised on several occasions, including:
- In 2015, the Trade Preferences Extension Act of 2015 mandated that the President conduct an out-of-cycle review of South Africa.
- In 2017, a petition from the Secondary Materials and Recycled Textiles Association (SMART) motivated the President to conduct an out-of-cycle review of Rwanda, Tanzania, and Uganda.
Whenever there are concerns about a particular country being compliant with the eligibility criteria, the White House has a wide range of actions at its disposal. Examples include communicating concerns to the foreign government, limiting the application of duty-free treatment concerning specific articles, and withdrawing eligibility in its entirety.
Spectrum of Non-Compliance Actions
A common misconception is that an out-of-cycle review will necessarily result in the loss of eligibility for preferential trade benefits under AGOA. This is a false assumption. Consider the historical record. There were no changes made to the eligibilities of South Africa, Tanzania, and Uganda as a result of their previous out-of-cycle reviews:
- No further action was taken on Tanzania and Uganda: Both countries made commitments that demonstrated sufficient progress toward the elimination of barriers on apparel products that harmed United States trade and investment.
- Intended action was notified against South Africa but revoked before it became effective: The White House determined that South Africa was not making sufficient progress toward the elimination of barriers on agricultural products that harmed United States trade and investment. However, South Africa took corrective actions before the sixty-day effective date of the suspension of preferential trade benefits concerning the agricultural sector under AGOA. Subsequently, the President determined that South Africa had come into compliance with the AGOA eligibility criteria and the suspicion was revoked before it took effect.
In the case of Rwanda, there was a suspension in the application of duty-free treatment concerning apparel products. However, that was well short of a complete withdrawal of eligibility.
The Biden Administration has been aggressive in taking non-compliance actions against AGOA beneficiaries:
- In 2022, the White House terminated the AGOA beneficiary status of Ethiopia (human rights), Guinea (political pluralism and rule of law), and Mali (human rights, political pluralism, rule of law, and worker rights).
- In 2023, it terminated the AGOA beneficiary status of Burkina Faso (rule of law).
- In 2024, the White House notified that it will reinstate the eligibility of Mauritania and terminate the eligibility of the Central African Republic (human rights, political pluralism, rule of law, worker’s rights), Gabon (political pluralism and rule of law), Niger (political pluralism and rule of law), and Uganda (human rights) next year.
The Biden Administration appears to value the coercive power of AGOA. Next year, there are expected to be a total of sixteen Sub-Saharan African countries ineligible for AGOA benefits. The current administration is expected to be responsible for initiating the eligibility terminations of half of those countries.
Terminations of AGOA Eligibility under Biden Administration
The United States Congress has been extremely critical of the White House for its stance on the eligibility of South Africa. On the eve of the AGOA Forum, the ranking member of the United States Senate Foreign Relations Committee, James Risch, released a public rebuke of the White House. According to Risch, “South Africa’s relationship with Russia, and most recently with Iran and Hamas, undermine necessary eligibility safeguards in the AGOA statute.” For those reasons, Risch argued that the Biden Administration should have taken “formal actions to communicate AGOA-related concerns to South Africa through a warning letter or demarche.” That criticism was echoed in a separate statement from the Ranking Member of the Senate Committee on Foreign Relations Subcommittee on Africa and Global Health, Tim Scott. In the background, they were joined by others. Although there was a diversity of opinions on the best course of action, there was bipartisan support for at least a letter of concern among key stakeholders on AGOA renewal. There was also questioning of the decision to schedule the AGOA Forum to follow on the heels of the expected public disclosure of the annual review determinations. It was felt that the timing was a mistake as it made it unnecessarily difficult to carry out a non-compliance action against the host.
“disappointed to learn that South Africa will remain fully eligible for AGOA’s duty-free trade preferences in 2024, despite South Africa’s continued actions that subvert US national security and foreign policy interests.”
- Senator James Risch
In Congress, there is a feeling that the Biden Administration has failed to give due consideration and regard to “previous bicameral and bipartisan efforts to raise concerns about the South African government’s actions against US national security interests, possibly in contravention of AGOA’s eligibility criteria.” It is therefore not surprising that there are efforts underway to take a different approach, including legislative action:
- On 6 November 2023, Coons published a discussion draft for the AGOA Renewal Act of 2023. Similar to the Trade Preferences Extension Act of 2015, the discussion draft included a mandatory out-of-cycle review for South Africa.
These efforts have provoked significant media coverage in South Africa. Unfortunately, the discussion draft was misunderstood by several prominent commentators:
- One commentator declared that “Coons’ bill intends to eject SA by calling for an ‘out-of-cycle’ review of the country’s eligibility.”
- Another warned that “South Africa would be removed from the programme” if the discussion draft was “accepted in its current form.”
Both claims appear to be unreasonable. Neither Senator Coons nor his staff have been quoted saying that the discussion draft was motivated by an intention to terminate the eligibility of South Africa, and an out-of-cycle review can lead to several outcomes aside from a termination of eligibility, as evidenced by the historical record.
Michael Walsh is a Visiting Researcher at the Georgetown School of Foreign Service.
[1-2] Walsh, M. (2023). Terminations of AGOA Eligibility under the Biden Administration. [White Paper]. Foreign Policy Research Institute.
The opinions expressed on this blog are solely those of the authors. They do not reflect the views of the Wilson Center. The Wilson Center’s Africa Program provides a safe space for various perspectives to be shared and discussed on critical issues of importance to both Africa and the United States.
About the Author
Michael Walsh is a Senior Fellow in the Foreign Policy Research Institute's Africa Program.
The Africa Program works to address the most critical issues facing Africa and U.S.-Africa relations, build mutually beneficial U.S.-Africa relations, and enhance knowledge and understanding about Africa in the United States. The Program achieves its mission through in-depth research and analyses, public discussion, working groups, and briefings that bring together policymakers, practitioners, and subject matter experts to analyze and offer practical options for tackling key challenges in Africa and in U.S.-Africa relations. Read more