In June 2014 the US government announced the reinstatement of Madagascar on the list of beneficiaries of the US African Growth and Opportunity Act (AGOA). Madagascar was suspended from the AGOA scheme following the coup d’état in March 2009. Madagascar had previously been seen as an “AGOA success story”, with exports of up to US$300 million per annum stimulated under the initiative. Exports to the US fell by 70% following the withdrawal of eligibility for AGOA trade preferences. Access to AGOA trade preferences has been reinstated after the nation’s “return to democratic rule”.
In contrast, on 26 June 2014, President Obama announced the suspension of Swaziland from eligibility for AGOA trade preferences. According to US government representatives, “the decision to withdraw Swaziland’s AGOA eligibility comes after years of engaging with the government of the Kingdom of Swaziland on concerns about its implementation of the AGOA eligibility criteria related to worker rights.” A White House statement maintained that Swaziland had not “demonstrated progress on the protection of internationally recognized worker rights”.
The prospect of losing AGOA access has already resulted in the closure of one major garment manufacturer. In all, some 17,000 jobs in Swaziland are reported to be directly linked to the production of garments for export under AGOA preferences.
While AGOA trade preferences primarily benefit the garment sector, a 2012 report from the Brookings Institution called for more support to be provided to help countries meet US sanitary and phytosanitary (SPS) requirements, and for Congress to “amend AGOA to mandate that the activities of the US Department of Agriculture support the implementation of AGOA”.
The US-based Institution’s report indicated that 30% of sub-Saharan Africa’s exports to the US do not receive duty-free access under AGOA, including some agricultural goods. Indeed, with agricultural products accounting for less than 1% of AGOA exports, there is considered to be scope for improving the scheme to better benefit agricultural producers in eligible countries.
Swaziland’s loss of AGOA benefits will restrict possibilities for diversifying agro-food sector exports, even if the pending 2015 review of the AGOA scheme introduces some of the changes suggested in the Brookings Institution report (see Agritrade article ‘ US African Growth and Opportunity Act needs to do more for agriculture’, 27 August 2012).