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United States Reinstates DR Congo Into AGOA Trade Pact

Apr 12, 2021
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United States Reinstates DR Congo Into AGOA Trade Pact

The African Growth and Opportunity Act (AGOA) is a US trade act that gives certain Sub-Saharan African (SSA) countries increased access to American markets by providing duty-free benefits on the importation of certain products from the SSA countries. On October 2, 2000, former President Bill Clinton issued a proclamation that designated thirty-four countries in Sub-Saharan Africa, including the Democratic Republic of the Congo (DRC), as eligible for the trade benefits of AGOA. However, in December 2010, former President Barack Obama ended the designation of the DRC as a beneficiary of AGOA because the country was not making much progress in meeting the agreed requirements.

The termination took effect in January 2011. Before the termination, DRC was among the top five AGOA-eligible oil exporters to the US, contributing around $68.2 billion in exports. This termination also took a toll on DRC since it lost the free trade opportunities and foreign investments of AGOA. Thus, DR Congo President Félix Tshisekedi is now working to reform and strengthen the country's democratic institutions, protect human rights, and combat corruption.

Exports News

On December 22, 2020, former President Donald Trump issued a proclamation to reinstate the DRC as an AGOA beneficiary country. Here are some ways the country will benefit from the reinstatement:

  • Help build stronger bilateral relationships: The AGOA pact will bolster the US-DRC bilateral trade relations, which could reposition the country’s rich natural resources trajectory if it keeps up with the requirements and consolidates an enabling business environment.
  • Maintain good governance: Eligibility criteria for AGOA include democratic practices and instituting fundamental human rights. The DRC government will have to maintain its record of promoting human rights, press freedom, and more to remain as a beneficiary of the AGOA.
  • Promote the growth of SMEs: The AGOA pact gives duty-free access to over 6,800 products, including textiles and apparel, which are some of the most prominent SME-driven sectors in the DRC. Also, DRC is the thirty-ninth exporter of coffee in the world. This could move up as the AGOA will allow SMEs to export the product to the US without having to worry about tariffs and taxes.

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