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Four Key Moments: Hearing on the Future of Trade with Sub-Saharan Africa, Haiti, and Other Nations

June 17, 2024

“There’ll be a party in Moscow, there’ll be a party in Beijing” if AGOA is not reauthorized.

WASHINGTON, D.C. – Ahead of the 2025 expiration of the African Growth and Opportunity Act (AGOA) trade preference program, the Ways and Means Trade Subcommittee considered potential reforms to help the program better meet the interests of the United States, primarily expanding fair market access for U.S. farmers, and combatting China and Russia’s aggression on the African continent. Witnesses at the Trade Subcommittee hearing urged the Committee to consider reforms to meet key goals, such as resuming the Trump Administration’s free trade agreement negotiations with Kenya, addressing rules governing when countries become ineligible for AGOA based on per-capita income, and securing U.S. supply chains. 

The hearing is the latest Committee activity to prepare for the 2025 expiration. This Congress, the Committee has held multiple roundtables with African ambassadors and stakeholders and Committee members have visited AGOA nations to learn about the program’s impact firsthand. 

Trade preference programs for Haiti are also set to expire in 2025. The Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act and the Haiti Economic Lift Program (HELP) Act help stabilize and provide economic opportunity in Haiti. 

Congress Should Renew AGOA with Reforms

AGOA provides national security and economic benefits to Americans, particularly as China and Russia seek to challenge America’s global leadership. Ways and Means Committee Chairman Jason Smith (MO-08) noted the program’s looming expiration offers a unique opportunity to reform the program to provide more direct benefit to American farmers, workers, consumers, and businesses. 

Chairman Smith: The AGOA program has a successful track record of encouraging economic development in sub-Saharan Africa and greater access for U.S. agriculture products in that region – something I’ve watched closely over the years having attended an AGOA forum in Gabon back in 2015. Under the program, American taxpayers have invested over $8 billion in trade-related activities in Africa over the past 20-plus years. Reauthorizing AGOA will ensure American taxpayers get a positive return on their investment. It will also strengthen our economic relationship by making sure access to African markets for American exports, especially agriculture, is fair and our trade relationships benefit American workers, farmers, and businesses.

Biden Administration Ignoring Bipartisan Support for Trade Relationship with Kenya

Trade Subcommittee Chairman Adrian Smith (NE-03) highlighted the strong support that multiple members of the Ways and Means Committee, both Republicans and Democrats, have expressed for a trade agreement with Kenya. However, the Biden Administration does not appear to agree, having ceased negotiations started by the Trump Administration in 2020. When Congress enacted AGOA, it was considered a first step for deepening economic ties with sub-Saharan Africa. The end goal has always been reciprocal, high-standard trade relationships with willing partner nations. Kenya is such a nation. Kenya has proven it’s a willing and capable trading partner, ready to take on high standard commitments. Its exporters already enjoy broad access to the American market, while American exports face a steep 13.2 percent average tariff. American agricultural products face a higher average tariff of 20.4 percent. The Administration should use the power of trade to help break down those barriers American producers and workers are facing in selling their goods. 

Rep. Smith: “Let’s not have our trading partners who are doing the right thing all along the way and utilizing AGOA, and then [be left with] nowhere else to go. It’s hard to even call it graduation when it’s a dead end. We owe, ultimately, the American people, better policy through this effort. I would hope that we could dig and dig deeper. I hear the comments here and an appetite for a trade agreement with Kenya. I’m beginning to wonder that the only people opposed to a trade agreement with Kenya happen to be at the White House. How unfortunate. Because as I engage with colleagues here in the legislative branch, there is this appetite and enthusiasm to get going here.

“There’ll be a party in Moscow; there’ll be a party in Beijing, if we don’t reauthorize it [AGOA].”

Witnesses contrasted the complete shift in Russia and China’s engagement in Africa since AGOA became law in 2000. At that time, China was not a major trading partner for most African nations. Today, China’s trade activity with the continent is larger than that of the United States. Similarly, Russia has strengthened economic and security ties with African nations. Rep. Vern Buchanan (FL-16) highlighted that a failure to reauthorize AGOA would diminish America’s ability to counter Russia and China in one of the world’s most strategically important regions.

Rep. Buchanan: Mr. Runde, you said that one-fifth is what, in terms of trade, that we do compared with the Chinese with Africa. $282 billion [is what] the Chinese do. My numbers [are] $84 billion that we do. How do we close the gap? We say we need a new agreement. We need a new and improved agreement that helps these folks…We really need to up our game. We talk a good game, but we don’t deliver…Don’t sugarcoat it. Tell us how you really feel.

Daniel Runde, trade expert: “We have not updated our cassette tape on Africa. Africa suffers from a negative media coverage. There have been studies in the New York Times and others. It’s all negative. We’ve failed to see Africa as an opportunity. The Chinese Communist Party sees Africa as a win-win opportunity. Unfortunately, much of our partnership with Africa to date, has been oriented around foreign assistance…That has got to be one piece of a much bigger conversation. We need an updated partnership…There’ll be a party in Moscow; there’ll be a party in Beijing, if we don’t reauthorize it.”

Weak AGOA Enforcement Harms U.S. Pork Producers

Strong enforcement of AGOA’s eligibility requirements is needed to guarantee fair access for U.S. agriculture producers to the markets of participating African nations. One of the program requirements is allowing fair and equitable access for U.S. trade and investment, but not all beneficiary nations have followed this requirement. Rep. Michelle Fischbach (MN-07) highlighted one example: American pork exported to South Africa. American pork faces unscientific barriers, putting American farmers and producers at a disadvantage and hurting their bottom line. As a witness explained, President Biden has chosen not to fight these unjust restrictions on American agriculture, along with restrictions on other agricultural products. 

Rep. Fischbach: “About 30 percent of the pork produced is exported. My understanding is that in South Africa, U.S. pork exports only account for about 1.3 percent of the pork imported into South Africa. It’s not necessarily that they’re not eating pork. It’s some unscientific issues, trade barriers that are in line. Mr. Runde, if you’ve got something to add on that.” 

Daniel Runde, trade expert: “I think President Obama had similar concerns about pork in South Africa. I do think that the pork producers in the United States should be emphasizing the job losses in the United States to these unscientific, unjustified sanitary and phytosanitary barriers. AGOA…part of it to qualify as the resolution of bilateral trade disputes. This, in the Obama administration, was seen as a bilateral trade dispute. I do think that it certainly falls in that category. AGOA has provisions to require that these unjustified sanitary and phytosanitary barriers be addressed. Finally, I had hoped that the Biden Administration might consider bringing this as a formal complaint to the WTO. I understand your constituents’ concerns and I share them.”