The African Growth and Opportunity Act: The Perils of Pursuing African Development through U.S. Trade Law

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ABSTRACT

Six years after enactment, the African Growth and Opportunity Act (AGOA) remains the cornerstone of U.S. economic policy toward subSaharan Africa. Ryan McCormick's note explores whether AGOA has served as a catalyst for African economic development. The author examines the legislative history that led to AGOA, the legal framework that resulted, and the economic consequences for African states. Analyzing multilateral developments in trade law, such as reforms required by the Agreement on Textiles and Clothing and China's accession to the WTO, the note considers AGOA's effect on Africa's nascent textile and apparel industry. And in case studies, the note examines AGOA's influence on two small African states, Lesotho and Benin. The author argues that three main factors have limited AGOA's effectiveness: constraints imposed by the legislative process, dependence on a one-dimensional strategy of tariff reduction, and the inherent limitations of "special and differential" trade law treatment. The author concludes with a series of legislative proposals and policy reforms designed to maximize AGOA's development impact in the years ahead.

I. INTRODUCTION

[M]an has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. '

When President Clinton signed into law the African Growth and Opportunity Act (AGOA) in May 2000, the legislation was billed as a historic turning point in U.S.-African relations.2 The landmark trade legislation authorized the president to grant duty-free and quota-free treatment to a wide range of exports from qualified sub-Saharan African countries. Passed with overwhelming bipartisan support, AGOA promised to unleash a wave of bilateral trade and American investment in sub-Saharan Africa. AGOA exemplified the new Washington Consensus among the American foreign policy establishment-a firm commitment towards a "trade-not-aid" approach to promoting economic development in the world's poorest regions.

For many law and development scholars, AGOA represented a welcome change in Congressional attitudes toward Africa. Policy initiatives and foreign assistance programs adopted by Congress in the years preceding AGOA's enactment had failed to effectively promote African development.3 AGOA ushered in a new era of development discourse in Washington, a dialogue previously absent from policymaking circles outside the confines of USAID (the U.S. government's primary foreign aid agency) and the World Bank. On Capitol Hill, where general apathy and thinly disguised neglect had previously presided over U.S. policy toward Africa,4 Congressional leaders were actively deliberating the merits of various development paradigms. During the Congressional floor debate on AGOA, U.S. Representative Philip English (R-PA) captured the essence of the classic liberal market-oriented philosophy driving the African trade legislation:

By opening our markets and looking to Africa as a market for our goods, we can do more to lift Africa out of poverty and help build its economic self-sufficiency while at the same time increasing our exports and creating jobs right here in America. By passing this bill, we can buttress the economic reforms now being embraced by sub-Saharan Africa and stimulate much needed economic growth and investment.5

The final product was an amalgam of trade preferences, policy pronunciations, and process-oriented reforms. AGOA was sold as a win-win for all parties involved. Supporters dismissed opponents' claims that the tangible benefits of the bill were illusory. They insisted preferential access to the American market would lead to greater export earnings and economic growth for the nations of sub-Saharan Africa. For the United States, closer ties with the African continent would enhance opportunities for investment, stabilize fragile democracies, and promote political cooperation.

Today, six years since passage of the original legislation, AGOA remains the cornerstone of the U. …