The US Trade Representative (USTR) said in a statement that Mali, Ethiopia, and Guinea would be removed from the African Growth and Opportunity Act (AGOA), due to actions taken by their respective governments that violated the AGOA statute.
The militaries of Guinea and Mali have overthrown their respective governments. Despite the fact that the governments were unpopular, regional and international bodies have condemned the coups. Ethiopia is at war, and both sides have committed human rights violations.
The Role of AGOA in Africa
AGOA is a legislation that gives goods manufactured in sub-Saharan African nations duty-free access to the US market. It was launched in 2000 by former US President Bill Clinton to facilitate trade between the US and Africa. To qualify, nations must eliminate barriers to US trade and investment. Nations must also make progress towards political pluralism.
Each year, the US reviews which African nations qualify for AGOA. In 2020, AGOA had a total of 38 eligible countries. The president of the US has complete discretion on whom he or she can add or withdraw from the AGOA.
In a statement banning the three countries, the USTR said Ethiopia, Mali, and Guinea might be able to rejoin AGOA if they meet the statute's provisions.
The Expulsion Will Affect Trade
The country which will lose the most from this announcement will likely be Ethiopia. Mali and Guinea aren't major exporters under AGOA, but Ethiopia, on the other hand, is the fifth largest exporter under the program.
Ethiopia has a textile industry that supplies global brands. The expulsion could negatively affect its growth. Ethiopia plans to become a light industry manufacturing hub, but the pandemic, civil war, and AGOA could hamper that. According to Ethiopian government statements, the expulsion from AGOA could affect more than 200,000 low-income families.
In 2020, Ethiopia exported $245 million worth of goods under AGOA, representing half its exports to the US market. Ethiopia's economic plans are in danger due to a civil war between the Tigrayan leadership and Prime Minister Abiy Ahmed Abiy. The war started in November 2020 and has claimed tens of thousands of people, and the Tigray region may have up to 40,000 civilians facing famine.
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