A Time Series Analysis of the African Growth and Opportunity Act: Testing the Efficacy of Transnationalism

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INTRODUCTION AND BRIEF BACKGROUND ON AGOA

Free trade agreements are seen as necessary to help the countries involved with tariff costs, while providing employment for their citizens. African countries have been striving for economic stability and freedom through the African Growth and Opportunity Act (AGOA) of 2000. This Act was designed to provide participating Sub-Saharan African countries access to the United States market through building relationships with American businesses and to encourage the reform of African countries through economic and commercial means. Since some observers say that the AGOA has been lucrative for the United States and some Sub-Saharan African countries but others say that it has not benefited Africa, this paper critically analyzes the necessity for a free trade agreement to be instituted for the region. By employing Transnationalism Theory, it is hypothesized in this essay that if the legislation takes into consideration the economic needs of all the AGOA countries, then these countries will enjoy substantial exports to the United States. By analyzing practices of the Act, this paper draws conclusions from the facts. The paper uses a triangulative approach, which entails both qualitative and quantitative methods. Data Collection was based on the archival technique by analyzing the statements of the Act, other government documents, scholarly articles, books, and Internet sources.

The African Growth and Opportunity Act, or AGOA (Title I, Trade and Development Act of 2000, P.L. 106-200), investigated in this essay is a legislation that was approved by the United States Congress in May of 2000 to assist the economies of Sub-Saharan Africa and to improve economic relations between the United States and the region. The major objective of the Act is to encourage African countries to make continual progress toward establishing the following aspects: market-based economies; the rule of law and political pluralism; elimination of barriers to United States trade and investment; protection of intellectual property; efforts to combat corruption; policies to reduce poverty, increasing availability of health care and educational opportunities; protection of human rights and worker rights; and elimination of certain child labor practices. (1)

The legislation authorizes the President to determine which Sub-Saharan African countries would be eligible for the AGOA each year. As of this writing, the following are the 40 AGOA-eligible countries: Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Cape Verde, Chad, Republic of Congo, Democratic Republic of Congo, Djibouti, Ethiopia, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania, Togo, Uganda, and Zambia. (2)

According to the International Trade Administration of the United States Department of Commerce, the United States government intends that the largest possible number of Sub-Saharan African countries is able to take advantage of the AGOA. President Bill Clinton issued a proclamation on October 2, 2000 designating 34 countries in Sub-Saharan Africa as eligible for the trade benefits of the AGOA. The proclamation was the result of a public comment period and extensive interagency deliberations of each country's performance against the eligibility criteria established in the Act. On January 18, 2001, Swaziland was designated as the 35th AGOA eligible country and on May 16, 2002 Cote d'Ivoire was designated as the 36th AGOA eligible country. On January 1, 2003 The Gambia and the Democratic Republic of Congo were designated as the 37th and 38th AGOA eligible countries. On January 1, 2004, Angola was designated as AGOA eligible. Effective January 1, 2004, however, the President removed the Central African Republic and Eritrea from the list of eligible countries. …

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