AGOA Renewal Bill Sponsor Says Package Faces 'Headwinds'

Although the prospects for renewing the African Growth and Opportunity Act before its expiration next year look positive, the renewal still faces “headwinds” due to an unusually partisan atmosphere on Capitol Hill, Sen. Chris Coons, D-Del., said during a Wilson Center panel June 18.

“Anything involving trade has become partisan and difficult,” the senator said.

However, he said that he had “literally just" discussed the topic with Senate Finance Committee ranking member Mike Crapo, R-Idaho, and hearings in both the House and Senate about reauthorization also have demonstrated bipartisan support for the trade deal.

Coons and Sen. Jim Risch, R-Idaho, introduced a bill in April that would renew AGOA for 16 years, rather than 10, would soften the income graduation rules and would give the administration less punitive options than kicking countries out of the program when there are eligibility concerns (see 2404120007). It would give the administration the option to take no action if the president believes that best serves the national interest, and also to issue a warning letter that termination would come in a year if the problem persists, or only eliminate some products from the tariff preferences.

Coons said during the panel that in addition to giving this "broader menu of options," it would reduce the frequency of reviews. In AGOA now, each country is evaluated annually.

"I think this clarity is important, as both the Congress and the president assess some challenging calls like South Africa, given their growing closeness, some integration issues with both Russia and China with a path forward for AGOA," he said.

Crapo said in a recent hearing that he would like a renewal to pass in July, in time for the AGOA Forum. Coons said that would send a great message. "But if somehow we don't get this done by then, we need to extend it at least before the end of this calendar year. We should not once again -- as has happened before -- suffer the dislocation of the embarrassment, the consternation of it coming right up to the end."

Florizelle Liser, the Corporate Council on Africa's president and CEO, said the way AGOA’s impacts are measured “needs to be widened." She said during the panel that the trade deal is “transformative” in its ability to pull Africans into the global markets.

“When you see, you know, 50 women in a factory, or 500 -- largely women -- using the factory, or 3,000, as I recently saw in Tanzania, it is small on our side, but on their side, it is huge, and it is impactful,” she said.

However, she and the other panelists said they also are watching for improvements in the next iteration of AGOA.

Sam Dupont, Coons’ economic policy adviser, discussed AGOA’s “controversial” enforcement system. Under the trade deal, countries that don’t meet a certain threshold for issues such as human rights or press freedoms lose their eligibility to participate. Critics, however, say that removing eligibility doesn’t affect decision-makers but harms workers.

The new legislation would provide a larger “menu” of enforcement options, letting the executive branch do more than simply remove a country from the program, Coons and Dupont said. Dupont said the president could start by writing a letter to the leaders of a country that falls out of compliance. Dupont also said that the bill would be more specific about the eligibility criteria, potentially tying eligibility directly to State Department reports on issues such as child labor.

The panelists also discussed methods to increase utilization of the deal. The bill, Dupont said, includes a section to encourage African governments to develop better strategies to take advantage of AGOA’s benefits. It also includes a “relatively modest amount of additional trade capacity building assistance,” conditioned on developing such strategies, he said.

Robie Kakonge, the Ugandan ambassador to the U.S., attended the panel as an audience member. She asked whether a path forward would be available for countries that have recently lost eligibility. Uganda was removed on Jan. 1 because of a harsh anti-homosexual law its government passed in 2023.

Not at this time, Dupont said: The bill wouldn't change the way eligibility is reviewed and enforced, so it will still be up to the executive branch to make those decisions.

“I think we could have a conversation about possible changes to the program to find backdoors at the back end for countries that are once again meeting the eligibility criteria,” but that would have to be deferred for another time, he said.