US AGOA trade talks opportunity for Nigeria’s economic diversification bid

Nigeria may have lost a chance to revive the business community’s interest in the African Growth and Opportunity Act (AGOA) free trade talks as the review ended in a deadlock. Nigeria in the last seventeen years has not benefited much from the deal as most products from Nigeria were not entered for the scheme. Now that Nigeria is focusing on diversification of the economy, an AGOA deal will facilitate economic recovery efforts if Nigeria government adequately sensitise the private sector take advantage of the scheme.

The review that saw US trade negotiators in Togo for a new deal ended with no decision and a feeling on all sides that it has achieved little since it was set up. While U.S. exports to sub-Saharan Africa as a whole have doubled to $21.81 billion from $10.96 billion in 2000, according to U.S. Commerce Department data, they were dwarfed by China’s $102 billion in exports to the region in 2015. Launched in 2000, the African Growth and Opportunity Act (AGOA) has been barely mentioned by any Trump officials. But no moves toward an early renewal or extension of AGOA are expected, said Constance Hamilton, deputy assistant U.S. Trade Representative for Africa.

President Donald Trump’s top trade negotiator Robert E. Lighthizer and other U.S. officials have been in Togo for two days to discuss the Clinton-era trade pact with sub-Saharan Africa.
Trump’s “America First” campaign has seen him withdraw from the Trans Pacific Partnership, threaten to tear up NAFTA and seek to renegotiate the U.S.-South Korea free trade deal.
But his administration has said little about Africa, and had not previously mentioned the 2000 AGOA trade agreement. It is not clear whether the U.S. wants to change the deal before it expires in 2025 or extend it further – no decision was made on either count.
AGOA allows tariff-free access for thousands of goods from 38 African nations to U.S. markets.
“The number of countries benefiting from AGOA is very limited, as is the number of sectors,” Peter Barlerin, Deputy Assistant Secretary in the Bureau of African Affairs, said at the forum on Wednesday.

“We will see if the situation improves in the coming years, but it is also up to the beneficiary countries to enhance their business climate.” Bernadette Legzim-Balouki, Togo’s trade minister, who presided over the meeting, was equally lukewarm on AGOA. Not all the countries eligible have benefited from the law,” she said. “We are trying to examine the constraints that prevent some African countries from profiting.”

Legzim-Balouki added that the United States and the nations eligible for AGOA had agreed on some loose aims, including: to develop a better plan to take full advantage of the pact, for each eligible country to have bilateral talks with the United States, and the need for a mechanism to protect African producers from price volatility.

The U.S. trade deficit with the AGOA countries shrank to about $7.9 billion last year from a peak of $64 billion in 2008, as U.S. shale oil production increases have lessened the need for oil imports from major exporters Nigeria and Angola. “AGOA is an excellent opportunity but we aren’t making the most of it, mainly due to a lack of knowledge about it,” Beninois agribusinessman Sylvain Adewoussi said.