Monday, May 20, 2024
NewsEthiopia reinstatement uncertain as US senators push for AGOA reauthorization

Ethiopia reinstatement uncertain as US senators push for AGOA reauthorization

Lawmakers in Washington are pushing a bill that would see a 16-year extension of a US preferential trade regime with Sub-Saharan Africa but there have been no official indications that Ethiopia will be reinstated to the African Growth and Opportunity Act (AGOA).

The bipartisan reauthorization bill proposes to grant members of the US Congress the authority to call for a review of a country’s AGOA eligibility at any time, a privilege previously reserved for the president only. It also proposes that scheduled eligibility reviews take place every other year instead of annually.

The trade deal, which allows the import of a wide range of African goods into the US duty free, was enacted in 2000 with an initial expiration date in 2015 but extended by ten years, slated to end in 2025. Members of the US Senate are now proposing to extend the deadline to 2041.

The Biden administration delisted Ethiopia from the trade program in December 2021 for “gross violations of internationally recognized human rights” midway through the two-year war in the north.

It was a heavy blow to the country’s industrial output, particularly in textiles, which accounted for a large portion of Ethiopian duty-free exports to the US. Close to half of USD 530 million in exports to the US in 2020, primarily textiles and leather products, were duty free under AGOA.

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The duty privileges from AGOA were a key factor in the Ethiopian government’s push for foreign investment in industrial parks. Textile and apparel manufacturers in the flagship Hawassa Industrial Park have either scaled back operations significantly following Ethiopia’s delistment, or shuttered completely.

During a visit to Ethiopia last year, US Secretary of State Anthony Blinken said the Ethiopian government must meet certain criteria for reinstatement to AGOA, including the implementation of the ceasefire agreement that ended the war in November 2022. Blinken was partly referring to the withdrawal of external forces from Tigray.

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