Ethiopia’s eligibility status to the African Growth and Opportunity Act (AGOA), which gives a duty and quota free access to the country’s textile, garments, shoe, leather, footwear and others to the United States, is a pending issue, sources said.
The AGOA trade program provides Sub-Saharan African nations duty-free access to the United States on the condition they meet certain eligibility requirements, such as eliminating barriers to U.S. trade and investment and making progress towards political pluralism.
In August 2021, US Trade Representative’s Office said the ongoing war and humanitarian crisis in Ethiopia’s north could affect the country’s trade benefits under the African Growth and Opportunity Act (AGOA).
However, sources said on Thursday: “Ethiopia’s eligibility to the AGOA platform is under assessment.” “It’s imminent but not occurred yet,” sources added.
Katherine Tai, U.S. global trade representative, said this month that Washington would “soon” decide on Ethiopia’s status under the AGOA.
“We are not expecting public announcement on that anytime soon,” said the sources.
“If Ethiopia denied AGOA’s eligibility, it will regain it after a year,” said sources.
AGOA brings Ethiopia hundreds of million dollars in hard cash annually and, more importantly, directly generates employment for about 100,000 people, mostly women in southern Ethiopia working in textile factories that export to United States. In 2020, Ethiopia secured $525 million from AGOA. Through the trade balance was in favor of the US, which exported $868 million worth commodities to Ethiopia the same year, according to a data from agoa info website.
Although Ethiopia is a net importer of goods from the US, its exports to the US have in recent years grown significantly, and have increased almost twenty-fold between 2000 and 2020 ($28 million to $525 million).
Almost half of Ethiopia’s US-bound exports are cleared into the US duty-free under AGOA: this comprises mostly garments, leather footwear and other leather goods, but also products such as flowers and vegetable products.