The Africa Growth and Opportunity Act and its Rules of Origin Generosity Undermined?
By Arvind Subramanian, Aaditya Mattoo, D. Roy. Social Science Research Network, 2002
211 citations recorded by the source corpus.
The African Growth and Opportunity Act (AGOA), signed into American law on May 18, 2000, is a major plank of U.S. initiatives toward the African continent. The Act aims broadly at improving economic policymaking in Africa, enabling countries to embrace globalization, and securing durable political and economic stability. As an incentive for Africa to adopt the necessary policy reform, AGOA offers increased preferential access for African exports to the United States. This paper describes the provisions of AGOA and assesses its quantitative impact on African exports, particularly in the apparel sector. Its main conclusions are: 1) AGOA will provide real opportunities to Africa. Even on conservative estimates about Africa's supply response, Africa's non-oil exports could be increased by about 8-11 percent. 2) However, the medium-term gains could have been much greater if AGOA had not imposed certain conditions and not excluded certain items from its coverage. The most important condition is the stringent rule-of-origin, that is, the requirement that exporters source certain inputs from within Africa or the United States. Estimates suggest that the absence of these conditions would have magnified the impact nearly five-fold, resulting in an overall increase in non-oil exports of US$0.54 billion compared with the US$100-US$140 million increase that is expected in the presence of these restrictions. These restrictions, particularly on apparel, will come at a particularly inopportune time, as Africa will be exposed to competition from other developing countries when the quotas maintained on the latters' exports under the Multi-Fiber Arrangement (MFA) are eliminated. Africa's apparel exports will be lower by over 30 percent with the dismantling of the MFA. If, on the other hand, AGOA had provided unrestricted access, the negative impact of the dismantling could be nearly fully offset.
Subfields: Development, Economics and Econometrics, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/9bdaa536a8e3ef64efd4e0386247b950c34ba8c6
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Citations in the corpus
- China and India: What's in it for Africa? (2006, background): “In other words, schemes such as the EBA and the AGOA still discriminate against fabrics produced in Asian countries, thereby preventing eligible African exporters to benefit from the schemes whilst using the most competitive inputs (Mattoo et al. 2002).”
- Performance of export processing zones: a comparative analysis of India, Sri Lanka and Bangladesh (2005, background): “for instance, contributed 71% of the total exports in Mauritius ( Madani 1999 ) while in Mexico,”
- Regional trade agreements: blessing or burden? (2009, unknown): “For example, Cadot et al. (2005) find that ROO halve the gains to Mexico from NAFTA and Mattoo et al. (2002) find similar results for the Africa Opportunity and Growth and Opportunity Act (AGOA).”
- Rethinking Trade Preferences: How Africa Can Diversify its Exports (2007, unknown): “gov/ for details 10 Several other studies look at the effects of AGOA, notably Matto et al (2003), Brenton and Ikezuki (2005), Olarreaga and Ozden (2005), Brenton and Ozden (2006) and Frazer and van Biesebroeck (2005), discussed more fully below.”
- Trade Growth under the African Growth and Opportunity Act (2010, unknown): “Mattoo et al. (2003) predicted the effects ex ante using information on pre-AGOA tariffs and assumptions on supply responses.”