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AGOA 2006 Report ŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜ 2006 COMPREHENSIVE REPORT ON U.S. TRADE AND INVESTMENT POLICY TOWARD SUB-SAHARAN AFRICA AND IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT PREPARED BY THE OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE THE SIXTH OF EIGHT ANNUAL REPORTS MAY 2006 ŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜ 2006 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act The Sixth of Eight Annual Reports May 2006 Foreword........................................................................................................................................ iii I. U.S.-African Trade and Investment Highlights ..............................................................1 II. Executive Summary...........................................................................................................3 III. The African Growth and Opportunity Act (AGOA) .....................................................8 A. AGOA Summary, Country Eligibility, and Product Coverage ...............................8 B. AGOA Trade in 2005 ............................................................................................12 C. AGOA Implementation and Outreach ...................................................................13 IV. Economic and Trade Overview ......................................................................................16 A. Economic Growth .................................................................................................16 B. Africa’s Global Trade ...........................................................................................17 C. Trade with the United States..................................................................................19 D. Investment and Debt ..............................................................................................21 E. Economic Reforms ...............................................................................................22 F. Regional Economic Integration .............................................................................24 G. Africa and the WTO...............................................................................................26 V. Trade Capacity Building .................................................................................................29 A. Overview................................................................................................................29 B. USTR Activities.....................................................................................................32 C. USAID Activities...................................................................................................33 D. U.S. Department of Commerce Programs .............................................................40 E. U.S. Department of Agriculture.............................................................................41 F. U.S. Trade and Development Agency ...................................................................43 G. Small Business Administration .............................................................................44 H. African Development Foundation..........................................................................45 I. Other TCB Activities .............................................................................................47 VI. Other Assistance Supportive of AGOA Objectives ......................................................48 A. Millennium Challenge Account.............................................................................48 B. USAID Programs...................................................................................................49 C. Sustainable Development and the Environment....................................................52 D. Labor ....................................................................................................................54 E. Transportation and Communication Infrastructure Development .........................55 F. Energy Infrastructure Development.......................................................................58 G. HIV/AIDS..............................................................................................................61 H. Overseas Private Investment Corporation ............................................................63 I. Export-Import Bank Initiatives..............................................................................64 J. U.S. Department of Commerce Initiatives ............................................................65 K. U.S. Bureau of Customs and Border Protection ...................................................66 VII. U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum…….…………68 VIII. Free Trade Agreement with the Southern African Customs Union ...………………69 IX. AGOA Country Reports..................................................................................................71 X. Other Resources for Information on U.S. Trade and Investment Policy Toward Africa and AGOA Implementation .............................................................138 Annexes A. AGOA Beneficiary Countries ...................................................................................140 B. AGOA Eligibility Criteria .........................................................................................141 C. Country Memberships in Major Regional Organizations ..........................................144 D. List of Frequently Used Acronyms ...........................................................................145 ii Foreword Section 106 of the African Growth and Opportunity Act (AGOA), Title I of the Trade and Development Act of 2000, states that the President shall submit a report to Congress annually through 2008 on trade and investment policy toward Africa and on implementation of AGOA. The Act also states that the President shall submit a report to Congress on potential free trade agreements with sub-Saharan African countries. These reports under AGOA continue a series of annual Presidential reports to Congress on U.S. trade and investment policy toward Africa under the Uruguay Round Agreements Act of 1994. The President delegated the reporting requirement to the United States Trade Representative by Executive Order 13346 of July 8, 2004. This is the sixth of eight annual reports under AGOA. The current report builds on the information provided in previous reports, providing new and updated information on U.S. trade and investment policy toward sub-Saharan Africa, including the implementation of AGOA, the designation of AGOA beneficiary countries, the impact that AGOA has had on U.S. trade and investment with sub-Saharan Africa, and information on reforms being undertaken by AGOA beneficiary countries. It was prepared by the Office of the United States Trade Representative with input from numerous federal agencies and offices including the National Security Council, the Departments of Agriculture, Commerce, Energy, Health and Human Services, Labor, State, Transportation, and Treasury, as well as the African Development Foundation, the Council of Economic Advisors, the Environmental Protection Agency, the Millennium Challenge Corporation, the Overseas Private Investment Corporation, the Small Business Administration, the U.S. Agency for International Development, the U.S. Bureau of Customs and Border Protection, the U.S. Export-Import Bank, the U.S. International Trade Commission, and the U.S. Trade and Development Agency. iii I. U.S.-African Trade and Investment Highlights • Thirty-seven of the 48 sub-Saharan African countries are eligible for benefits under the African Growth and Opportunity Act (AGOA) – which provides them duty-free access to the U.S. market for virtually all products. On January 1, 2006, Burundi was added to the list of eligible countries, and Mauritania was removed from the list. As of April 2006, twenty-five sub-Saharan African countries are eligible to receive AGOA’s apparel benefits. Fourteen of these countries also qualify for AGOA’s provisions for handloomed and handmade articles. One country, Nigeria, qualifies for AGOA’s ethnic printed fabric benefits. • Since its inception in 2000, AGOA has helped increase U.S. two-way trade with sub-Saharan Africa by 115 percent. In 2005, U.S. total exports to sub-Saharan Africa rose 22 percent from 2004, to $10.3 billion. U.S. total imports from Africa increased by 40 percent to $50.3 billion. In 2005, over 98 percent of U.S. imports from AGOA-eligible countries entered the United States duty-free. • U.S. imports from sub-Saharan African countries under AGOA (including its GSP provisions) totaled $38.1 billion in 2005, up 44 percent over 2004 – largely due to oil. Several non-oil sectors experienced increases, including footwear, toys, sportswear, fruits, nuts and cut flowers. However, total non-oil AGOA trade declined by 16 percent, to $2.9 billion in 2005, mainly due to: increased global competition in the apparel sector, resulting in part from the end of global apparel quotas and the anticipated end of AGOA third country fabric provisions; an appreciation of key currencies such as the South African rand; decreased demand for key minerals and metals such as manganese; and production shifts in the South African automotive sector. • The Administration is intensifying its work with AGOA stakeholders in the United States (including Congress, private sector and civil society) as well as with African governments, international
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