Creating the conditions for strong economic growth is an essential component in the fight against extreme poverty. One tool the U.S. government has to promote economic growth in sub-Saharan Africa is the African Growth and Opportunity Act (AGOA). We’ve talked before about the importance of trade in development; and the ways AGOA can help African farmers thrive, but this is all at risk if Congress fails to pass legislation that reauthorizes AGOA for an additional ten years.
Where are we?
In May the Senate passed a bill that extended AGOA for a period of 10 years, which was then passed overwhelmingly in the House. Unfortunately, the noncontroversial AGOA reauthorization was then entangled with several other more controversial trade bills also moving through the House. Because of this we’ve had to start all over again.
What is next?
We expect the Senate to pass H.R. 1295 “The Trade Preferences Extension Act of 2015”, a bill that includes AGOA reauthorization, sometime later today; which will then send it back to the House for passage. We have heard from our friends that this time around, once the House passes this vital legislation, it will go to the President for signature.
Why is this important?
AGOA enjoys broad bi-partisan support as a program that gives African exporters duty-free access to the U.S. market. The consequences if AGOA fails to be reauthorized will be devastating to the people and countries currently benefitting from this program. Under AGOA, U.S. imports from sub-Saharan Africa have increased more than three times, and reached $26.7 billion in 2014.
A good friend of ONE’s, Barrett Ward, is a great example of the power of AGOA. His company, FashionABLE, is committed to using economic growth to fight poverty. Barret works with suppliers in Ethiopia and Kenya to import handcrafted items into the United States. Because his production capacity is lower than say, suppliers in China, his African products are only competitive because they are not subject to import duties. The waiver of these duties alone drops the price of his product anywhere from $4-$20. If AGOA is not reauthorized, FashionABLE will have to increase their retail prices anywhere from 15-20%. Their products will no longer be able to compete with similar, more cheaply produced goods from China.
Because of AGOA, Barrett and FashionABLE are building a competitive supply chain through working with women in Africa. AGOA helps them maintain a competitive pricing structure while their purchasing of product in Africa creates jobs for women at a fair and living wage. Without AGOA their products will no longer be able to compete in the U.S. market place, and these women will be at jeopardy of losing their jobs and livelihoods.
We have to make sure this critical legislation is passed in both the House and Senate again. Please call your Representative at 1-888-213-2881 and tell them to vote yes on H.R. 1295, The Trade Preferences Extension Act of 2015, so we can help get African goods and services to the United States. We want Africans to be able to do business with the world.