Great news! Just last week, Congress renewed the African Growth and Opportunity Act (AGOA), allowing sub-Saharan African countries to continue duty-free trade with the United States until 2025. Originally signed into law by President Bill Clinton in 2000, the Bill (no pun intended) was set to expire at the end of September.

Now, why is a trade deal worth mentioning on a site dedicated to the eradication of global poverty? Because encouraging free trade and open markets in developing countries is a necessary step in lifting people out of destitution.

The renewal of AGOA allows sub-Saharan African nations to remain competitive with Asian countries producing similar products at a cheaper cost. Since the US began duty-free trade with applicable African nations, “imports from sub-Saharan Africa have increased more than three times, and reached $26.7 billion USD in 2014.”

This growth in economic output has had a profound effect, improving infrastructure and creating job opportunities, as well as strengthening the United States’ relationship with sub-Saharan countries.

While AGOA’s intention is to sustain the rise in trade with sub-Saharan developing nations , those set to benefit the most from the Bill’s renewal are those rarely mentioned in its text: girls and women.

Image: Wikicommons: Steven Walling

Not only does AGOA afford employment opportunities to girls and women in factories and production facilities, but reduced trade tariffs greatly reduce restrictions and price volatility on the exportation of agricultural products. Women make up 50% of farmers in sub-Saharan Africa, continuing duty-free trade with the US goes a long way to empowering girls and women.

In a press release responding to the Bill’s restoration, Congresswoman Karen Bass (D-Calif.) remarked, “Over the next 10 years, Africa will become an even more important part of the world economy...it is in the interest of the United States and the countries of Africa--the world’s new economic frontier--that we work toward a stronger and mutually beneficial economic relationship that will stand the test of time.”     

Trade agreements such as AGOA are extremely beneficial to developing nations, but the positive impact of these acts on the United States’ economy often goes overlooked.

AGOA has tripled US exports to sub-Saharan countries, created 100,000 jobs in the US, and gives the US more leverage in trade negotiations with Asian countries. Additionally, AGOA encourages US investments in sub-Saharan Africa, home to ten of the fastest growing economies in the world.

These type of trade deals are changing the perception of the region. Best summed up by Heritage Foundation, “African nations should no longer be regarded primarily through the lens of assistance, but increasingly as viable economic partners that deserve focused attention and deeper engagement.”

The passage of the African Growth and Opportunity Act is a major legislative and regulatory step forward to enabling nations to end extreme poverty. As global citizens, it is our duty to ensure that developed countries continue to lead the effort by producing laws targeted toward promoting systems that empower impoverished nations.

Editorial

Defeat Poverty

How trade agreements are crucial to ending extreme poverty

By Ryan Nardi