The African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000 as Title 1 of The Trade and Development Act of 2000. The Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets. President Bush signed amendments to AGOA, also known as AGOA II, into law on August 6, 2002 as Sec. 3108 of the Trade Act of 2002. AGOA II substantially expands preferential access for imports from beneficiary Sub-Saharan African countries.
By modifying certain provisions of the African Growth and Opportunity Act (AGOA), the AGOA Acceleration Act of 2004 (AGOA III, signed by President Bush on July 12, 2004) extends preferential access for imports from beneficiary Sub Saharan African countries until September 30, 2015; extends third country fabric provision for three years, from September 2004 until September 2007; and provides additional Congressional guidance to the Administration on how to administer the textile provisions of the bill.
The Africa Investment Incentive Act of 2006 (signed by President Bush on December 20, 2006) further amends portions of the African Growth and Opportunity Act (AGOA) and is referred to as "AGOA IV". The legislation extends the third country fabric provision for an additional five years, from September 2007 until September 2012; adds an abundant supply provision; designates certain denim articles as being in abundant supply; and allows lesser developed beneficiary sub-Saharan African countries export certain textile articles under AGOA.
AGOA provides reforming African countries with the most liberal access to the U.S. market available to any country or region with which the United States does not have a Free Trade Agreement. It supports U.S. business by encouraging reform of Africa’s economic and commercial regimes, which will build stronger markets and more effective partners for U.S. firms.
AGOA expands the list of products which eligible Sub-Saharan African countries may export to the United States subject to zero import duty under the Generalized System of Preferences (GSP). While general GSP covers approximately 4,600 items, AGOA GSP applies to more than 6,400 items. AGOA GSP provisions are in effect until September 30, 2015.
AGOA can change the course of trade relations between Africa and the United States for the long term, while helping millions of African families find opportunities to build prosperity:
By reinforcing African reform efforts;
By providing improved access to U.S. technical expertise, credit, and markets; and
By establishing a high-level dialogue on trade and investment.
Since its implementation, AGOA has encouraged substantial new investments, trade, and job creation in Africa. It has helped to promote Sub-Saharan Africa's integration into the multilateral trading system and a more active role in global trade negotiations. It has also contributed to economic and commercial reforms which make African countries more attractive commercial partners for U.S. companies.
IMPLEMENTATION
An AGOA Implementation Subcommittee of the Trade Policy Staff Committee (TPSC) was established to implement AGOA. Among the most important implementation issues are the following:
Determination of country eligibility;
Determination of the products eligible for zero tariff under expansion of the Generalized System of Preferences (GSP);
Determinations of compliance with the conditions for apparel benefits;
Establishment of the U.S.-Sub-Saharan Africa Trade and Economic Forum; and
Provisions for technical assistance to help countries qualify for benefits.
COUNTRY ELIGIBILITY
The U.S. Government intends that the largest possible number of Sub-Saharan African countries are able to take advantage of AGOA. President Clinton issued a proclamation on October 2, 2000 designating 34 countries in Sub-Saharan Africa as eligible for the trade benefits of 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 Côte 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 eligibile. Effective January 1, 2004, however, the President removed the Central African Republic and Eritrea from the list of eligible countries. On December 10, 2004, the President designated Burkina Faso as AGOA eligible. Effective January 1, 2005, the President removed Côte d'Ivoire from the list of eligible countries. Effective January 1, 2006, the President designated Burundi as AGOA eligible and removed Mauritania from the list of eligible countries. Effective December 29, 2006, the President designated Liberia as AGOA eligible. Effective June 28, 2007, the President again designated Mauritania as AGOA eligible. Effective April 17, 2008, the President designated Togo as AGOA eligible. Effective June 30, 2008, the President designated Comoros as AGOA eligible. Effective January 1, 2009, the President again removed Mauritania from the list of AGOA eligible countries. The U.S. Government will work with eligible countries to sustain their efforts to institute policy reforms, and with the remaining nine Sub-Saharan African countries to help them achieve eligibility.
The Act authorizes the President to designate countries as eligible to receive the benefits of AGOA if they are determined to have established, or are making continual progress toward establishing the following: market-based economies; the rule of law and political pluralism; elimination of barriers to U.S. 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. These criteria have been embraced overwhelmingly by the vast majority of African nations, which are striving to achieve the objectives although none is expected to have fully implemented the entire list.
The eligibility criteria for GSP and AGOA substantially overlap, and countries must be GSP eligible in order to receive AGOA’s trade benefits including both expanded GSP and the apparel provisions. Although GSP eligibility does not imply AGOA eligibility, 47 of the 48 Sub-Saharan African countries are currently GSP eligible.
GSP PRODUCT ELIGIBILITY
AGOA authorizes the President to provide duty-free treatment under GSP for any article, after the U.S. Trade Representative (USTR) and the U.S. International Trade Commission (USITC) have determined that the article is not import sensitive when imported from African countries. On December 21, 2000, the President extended dutyfree treatment under GSP to AGOA eligible countries for more than 1,800 tariff line items in addition to the standard GSP list of approximately 4,600 items available to non-AGOA GSP beneficiary countries. The additional GSP line items which include such previously excluded items as footwear, luggage, handbags, watches, and flatware were implemented after an extensive process of public comment and review.
AGOA extends GSP for eligible Sub-Saharan African beneficiaries until September 30, 2015. Sub-Saharan African beneficiary countries are also exempted from competitive need limitations which cap the GSP benefits available to beneficiaries in other regions.
APPAREL PROVISIONS
AGOA provides duty-free and quota-free treatment for eligible apparel articles made in qualifying sub-Saharan African countries through 2015. Qualifying articles include: apparel made of U.S. yarns and fabrics; apparel made of sub-Saharan African (regional) yarns and fabrics until 2015, subject to a cap; apparel made in a designated lesser-developed country of third-country yarns and fabrics until 2012, subject to a cap; apparel made of yarns and fabrics not produced in commercial quantities in the United States; textile or textile articles originating entirely in one or more lesser-developed beneficiary sub-Saharan African countries; certain cashmere and merino wool sweaters; and eligible handloomed, handmade, or folklore articles, and ethnic printed fabrics.
Under a Special Rule for lesser-developed beneficiary countries, those countries with a per capita GNP under $1,500 in 1998, will enjoy an additional preference in the form of duty-free/quota-free access for apparel made from fabric originating anywhere in the world. The Special Rule is in effect until September 30, 2012 and is subject to a cap. AGOA IV continues the designation of Botswana and Namibia as lesser-developed beneficiary countries, qualifying both countries for the Special Rule.
AGOA IV provides for special rules for fabrics or yarns produced in commercial quantities (or "abundant supply") in any designated sub-Saharan African country for use in qualifying apparel articles. Upon receiving a petition from any interested party, the International Trade Commission will determine the quantity of such fabrics or yarns that must be sourced from the region before applying the third country fabric provision. It also provides for 30 million square meter equivalents (SMEs) of denim to be determined to be in abundant supply beginning October 1, 2006. The U.S. International Trade Commission will provide further guidance on how it will implement this provision.
Preferential treatment for apparel took effect on October 1, 2000, but beneficiary countries must first establish effective visa systems to prevent illegal transshipment and use of counterfeit documentation, and that they have instituted required enforcement and verification procedures. Specific requirements of the visa systems and verification procedures were promulgated to African governments via U.S. embassies on September 21, 2000. The Secretary of Commerce is directed to monitor apparel imports on a monthly basis to guard against surges. If increased imports are causing or threatening serious damage to the U.S. apparel industry, the President is to suspend duty-free treatment for the article(s) in question. The U.S. Government is now reviewing applications for approval of the required visa and enforcement mechanisms from AGOA eligible countries.
OTHER PROVISIONS
The Act directs the President to organize a U.S.-Sub-Saharan Africa Trade and Economic Forum, to be hosted by the Secretaries of State, Commerce, Treasury, and the U.S. Trade Representative. The Forum is to serve as the vehicle for regular dialogue between the United States and African countries on issues of economics, trade, and investment. The Act also calls for annual reports to Congress through 2008 on U.S. trade and investment policy in Africa and implementation of the Act.
AGOA accords duty-free treatment to virtually all products exported by beneficiary sub-Saharan (SSA) countries to the United States. AGOA provides beneficiary countries with the most liberal access to the United States market accorded to any country or region that has not negotiated a free trade agreement with the United States.
The AGOA bill which was enacted in 2000 originally expired on September 30, 2008 but as a result of the July 13, 2004 signing of the AGOA Acceleration Act of 2004, AGOA has been extended until September 30, 2015.
AGOA benefits are currently extended to 37 SSA countries and to more than 1,800 tariff line items in addition to the 4,600 items already enjoying duty-free status under the U.S. Generalized System of Preferences (GSP) program. AGOA has added to the list of duty-free products such major import-sensitive items as apparel, footwear, luggage, handbags and watches.
What are the main benefits available to exporters from AGOA beneficiary countries?
AGOA accords duty-free access for eligible products to the largest single market in the world. It also provides beneficiary countries with a significant competitive advantage over non-AGOA countries that must pay normal tariff rates to enter the United States. This is particularly true with respect to products that have high U.S. tariff rates in many instances, such as apparel, footwear and agricultural products.
The program also promotes export diversification in AGOA countries through its provision of duty-free and quota-free benefits to virtually all products. AGOA also encourages expanded regional integration and production sharing among beneficiary countries, and provides job creation and economic growth within those countries.
In addition, AGOA provides significant opportunities for companies and business organizations to build relationships with their U.S. counterparts. It also provides security for both SSA exporters and potential U.S. investors by ensuring AGOA benefits until 2015.
. Eligibility Requirements
The eligibility requirements set forth in AGOA were developed by the U.S. government in consultation with African countries, and constitute "best practice" policies that will help these countries to attract trade and investment. These criteria include either the establishment of, or continual progress toward establishing, a market-based economy; removal of barriers to U.S. trade and investment; establishment of rule of law; efforts to combat corruption; protection of intellectual property rights and internationally recognized worker rights and policies to reduce poverty.
In addition, countries cannot engage in activities that undermine U.S. national security or foreign policy interests; cannot engage in gross violations of internationally recognized human rights; cannot provide support for acts of international terrorism, and must have implemented their commitments to eliminate the worst forms of child labor.
Who makes the determinations regarding AGOA eligibility?
A U.S. government interagency panel chaired by the Office of the United States Trade Representative reviews the eligibility of African countries for AGOA benefits annually, based on the criteria set forth in the AGOA legislation. All U.S. government agencies involved in U.S. trade policymaking take part in this process. The panel relies on information provided by U.S. embassies, SSA governments, U.S. government agencies and comments submitted to the U.S. government by interested parties. Interagency recommendations on eligibility are submitted to the President for final determination.
Can a beneficiary country lose its AGOA benefits?
Yes. The U.S. government annually reviews progress in each eligible country toward meeting the AGOA eligibility criteria set forth. The President must withdraw AGOA benefits from a beneficiary country if on the basis of the interagency review it is determined that the country is not making continual progress toward meeting the eligibility criteria.
The President has cited a variety of reasons for withdrawing AGOA benefits, as well as for denying AGOA benefits to countries that have not yet been designated beneficiary countries. These include absence of economic reform, rule of law, human rights, foreign policy and political circumstances.
Which products are eligible for AGOA benefits?
Nearly all products exported by SSA countries to the United States are eligible with very few exceptions, as long as they meet the AGOA rule of origin requirements and are exported directly from a beneficiary country to the United States. The President takes into account the advice received from the U.S. International Trade Commission on the import sensitivity of products.
How do I determine if the products I want to export to the United States are eligible for duty-free treatment?
There are three means by which products exported by SSA countries to the United States may be accorded duty-free treatment. The U.S. government has already eliminated the tariff on many imports in general as a result of previously negotiated agreements. In addition, many developing country products enter the United States duty-free under the U.S. Generalized System of Preferences program (GSP). Under AGOA, numerous additional products are receiving duty-free treatment from the United States. AGOA added approximately 1,800 tariff line items to the 4,600 items already entering the United States under GSP.
The first step you need to take to determine the U.S. tariff rate for a product is to find out what the U.S. Harmonized Tariff Schedule (HTSUS) number is for that product. You can determine that by going to: www.usitc.gov/tata/index.htm . An alphabetized index and listing of articles is located at the rear of the HTSUS. Once you determine the HTSUS number, you will be able to find out the U.S. tariff rate.
What are the specific AGOA requirements concerning products exported by SSA countries to the United States?
The products in question must have been deemed eligible for AGOA benefits by the U.S. government. They must also have been grown, produced or manufactured by a beneficiary country through more than a simple combining or packaging operation, and must be exported directly to the United States. The products must also meet the specific rule of origin requirements, and must be accompanied by import documentation that claims AGOA benefits on the relevant shipping documents.
There are also additional requirements for specific types of products. In the case of apparel products, beneficiary countries must adopt a U.S.-government approved visa system and domestic laws and enforcement measures to prevent illegal transhipment of the apparel and use of counterfeit documents. In the case of agricultural products, they must comply with regulations established by the U.S. Agriculture Department to protect the health of the American public. In addition, beneficiary countries exporting agricultural products to the United States will have to provide the U.S. Food and Drug Administration with advance notice of each shipment entering the United States to permit the agency to target inspections more effectively and help ensure the safety of those products.
What are the AGOA rules of origin criteria for products exported by SSA countries to the United States?
With respect to non-apparel products, the product must be the growth, product or manufacture of a beneficiary country, and an AGOA country must provide at least 35 percent value added in the course of the production process. Up to 15 percent of that 35 percent may be derived from U.S. parts or materials used to produce the product.
The rules of origin regarding apparel products vary with the product. As noted above, beneficiary countries must establish effective visa systems and institute required enforcement and verification procedures before any of their apparel exports to the United States can receive AGOA benefits.
Specifically, AGOA extends duty-free and quota-free treatment to SSA apparel made from U.S. yarn and fabric and knit-to-shape sweaters made in the region from cashmere and some merino wools. AGOA also accords such benefits to SSA apparel made from yarns and fabrics not produced in commercial quantities in the United States, and to SSA products that are either hand loomed fabric, handmade goods of hand loomed fabric or folkloric items (as determined through consultations between the United States and the exporting SSA country).
AGOA benefits are also extended to SSA apparel made from regional fabric and yarn. However, such products are subject to an annual cap by the United States. With the extension implemented by the AGOA Acceleration Act of 2004, the ceiling goes up every year to a cap of 7 percent of the U.S. apparel market by 2015. AGOA also provides a special provision in the cap that allows beneficiary countries with an annual Gross National Product of under $1,500, referred to as "lesser developed beneficiary countries" to use fabric inputs from any country until September 30, 2007.
What constitutes an "effective visa system" with respect to SSA apparel exports to the United States?
An effective visa system is a government-private sector process that demonstrates that the items for which AGOA benefits are claimed were actually produced in a beneficiary country or countries in accordance with the required rules of origin. The U.S. government has advised SSA countries on what the visa system should entail. This includes that each shipment be covered by an original visa stamped on an original invoice. The visa needs to contain certain information such as the date of the visa, the quantity of goods that are shipped and a country code.
In addition to extending AGOA and the third country fabric benefits, what are the some of the additional provisions of the AGOA Acceleration Act of 2004?
Expands definition of "folklore" products to include ethnic printed fabrics that are made on machines to qualify for duty-free treatment.
Allows the use of third country collars and cuffs, drawstrings, shoulder pads or other padding, waistbands, belts attached to the article, straps containing elastic, or elbow patches to articles that meet the requirements for preferential treatment.
Extends duty free benefits retroactively from October 1, 2000 to knit-to-shape apparel in AGOA eligible countries that was previously disqualified. Importers must file their requests for refunds with the U.S. Bureau of Customs and Border Protection at the port of entry within 90 days from the enactment of the legislation (July 13, 2004). Retroactive AGOA visas and certificates of origin must be filed with the request.
Directs the President to develop policies to support infrastructure development in ecotourism, roads, railways, ports, energy, telecommunications and agriculture processing. In addition, the President must submit a report to Congress, no later than one year from the enactment of this Act, that highlights the sectors of each eligible sub-Saharan African country's economy that show the greatest potential for growth, identifies any barriers that exist, and makes recommendations on how the United States can provide technical assistance to remove these barriers and increase opportunities for U.S. investors, businesses, and farmers.
Exportable products under AGOA
Nigeria’s top exports to the U.S include cocoa beans, feed/fodder (i.e. bran, bird seed), spices, tree nuts, dried fish fingerlings, fish fillet shrimps, cassava starch, palm kernel oil, ginger, cashew nut, shea butter, garlic, snail, palm kernel cake, cocoa butter, sesame seed, groundnuts, chili pepper, honey, mushroom, gum Arabic, fruit juice, sea foods, yam, yam flour, agricultural and forestry products, foot wear, fat and oil and preparations, leather articles, solid minerals, tobacco, beverages, assorted handicrafts, and aluminum products.
All you need to do is to choose three perfect product under AGOA, discover the money making potential of each one and use them as your keys to success.
These products are in high demand in the U.S and most of the exporting countries lack the type of preferences which Nigeria enjoys.
AGOA will help you fill the necessary forms; they will also provide logistics and make sure your product arrives the U.S without any hitches.
You can start your export business with little capital. Source for these products locally and sell to major exporters and start making your money without going through the rigors of company registration or NEPC (Nigerian Export Promotion Council) registration. The profit from the first transaction can be ploughed back and an investor should be able to build up his capital base to start exporting directly to the U.S.
The export business is highly profitable. Because of the low overhead cost, most of the money you make on commission is yours. But building a truly profitable business requires dedication and a good knowledge of the business which the Nigeria Export Promotion Council provides.
Not only does this Export Business require little financial investment to start, but it offers the prestige of working with clients from all over the world.
You can locate AGOA at 30, Lugard Avenue, Ikoyi, Lagos to start your export business.
AGOA OFFICE IN NIGERIA
23 Marina, Lagos at the Bank of Industry Building (BOI)
Tel:01-2806869
http://www.21stplacelive.com/foodstuff/Agoaresource.htm
