For African exporters interested in the US market, the good news is that US-African trade grew by more than 500 per cent between 2001 and 2011. The U.S. market is wide open for goods that conform to its laws.
The African Growth and Opportunities Act (AGOA) and the Generalized System of Preferences (GSP) programs can give African exporters a cost-advantage over their competitors. These programs permit qualified African goods duty-free entry into the US market. Duty-free entry means that the goods can be sold at a cheaper price than similar goods which may have attracted a duty, or import tax, when the product entered the country.
Getting Your Product in Free
Most Favored Nation (MFN): African countries all have “normal trade relations” (NTR) or MFN status with the United States. So does every other country, except for Cuba and North Korea. A number of products receive duty-free entry into the United States on the basis of their country’s MFN status. This is good news because it means there are no additional qualifying requirements that have to be met to allow the products to be sold more cheaply to US consumers. On the other hand, there is no cost-advantage over one’s competitors based on the ability to avoid paying import taxes at the US border.
Generalized System of Preferences (GSP): The majority of African countries qualify for GSP which provides duty-free entry into the US market for about 5,000 products. To qualify for GSP, the imported products must meet Country Eligibility and Product Eligibility criteria.
GSP is not currently available because the program has lapsed and needs to be renewed by US Congress. However, African exporters should still encourage the US importers of their products to claim GSP duty-free status at the time of entry.
African Growth & Opportunity Act (AGOA): AGOA is a preferential trade program that extends GSP benefits on an additional 1800 products to those sub-Saharan African countries that qualify for this program. African exports from ten sub-Saharan African countries are currently ineligible for AGOA duty-free entry into the US market. African exports from these countries are eligible for GSP (once it is renewed). Except for agriculture and apparel and textile products, the eligibility criteria are similar to those of the GSP program. Exporters from eligible African countries can continue to use AGOA as this program does not expire until September 30, 2015.
Opportunity to Comment on AGOA Country Eligibility
The Office of the US Trade Representative (USTR) is conducting its annual review to determine the African countries whose exports should continue to be eligible for AGOA duty-free entry into the US market. Any interested person can submit comments to support continued access to AGOA, the addition of currently ineligible countries, or why countries should not be eligible. For more information, please click here or contact us. Comments are due by October 25th (2013)!
* The links in this post will be updated as soon as websites maintained by US agencies that have been impacted by the government shutdown become accessible once again.