Incr Exports from Sub the Unit

The African Growth Opportunity Act (AGOA) provides preferential access to Africa's products in US markets. While proponents expect that AGOA will expand Africa's exports to the US, opponents argue that such increases are unlikely, particularly regarding agricultural exports. This paper offers new empirical evidence that is inconclusive regarding the impact of AGOA on African exports to the US. (25 pages, including Appendix) Kofi Nouve is graduate student and John Staatz is professor, both in the Department of Agricultural Economics at Michigan State University. For their helpful comments, we wish to thank Michael Weber, David Mather, Asfaw Muleta, Gerald Nyambane, Meeta Punjabi, and Monika Tothova, participants to the GSO Seminar (February 28, 2003) at the Department of Agricultural Economics, Michigan State University (MSU), and to the Capri Conference on Agricultural Policy Reforms and WTO (Capri, Italy, June 23-26, 2003). Financial support for this research is provided through the Sahel Regional Program of the Food Security II/III Cooperative Agreement between Michigan State University (MSU) and US Agency for International Development (USAID). While gratefully acknowledging the financial contribution of USAID and the research facilities provided by MSU, we take full responsibility of the views expressed in this paper. Copyright 8 2003 by Kofi Nouve and John Staatz. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. Has AGOA Increased Agricultural Exports from Sub-Saharan Africa to the United States? The African Growth and Opportunity Act (AGOA), which was signed into United States (US) law in May 2000, offers preferential access to Sub-Saharan Africa's (SSA) products in US markets. In return, beneficiary countries are committed to improve their economic policy environment, participate more actively in the globalization process, promote political and economic stability, and foster human and workers' rights in Africa (Mattoo, Roy and Subramanian, 2002). The idea of creating a new form of trade preferences exclusively for SSA, in addition to already existing Generalized Systems of Preferences (GSP), drew both support and opposition from a wide range of actors. Pointing to the marginal place of SSA in the global markets for goods, services and investments, supporters have argued that AGOA would expand African exports to US, increase foreign direct investment, and create new employment opportunities in SSA. AGOA also faced severe criticisms, especially from international anti-globalization movements and US interest groups. In the US, textile lobby groups and labor unions were primarily concerned that removal of trade barriers on textile and apparels would result in massive loss of jobs (Cooper, 2002; Friedman, 2000a; 2000b). Recently, US fruit growers urged the administration to re-impose a 15.3% import duty on canned pears, claiming that AGOA gave South African pear farmers an unfair advantage over US farmers (Poole, 2002). Opponents have also charged that AGOA benefits will remain essentially illusory for most countries in SSA (Blackman and Mutume, 1998; Mutume, 1998; Raghavan, 2000). Though largely unsubstantiated, several limitations of the current SSA-US trade relationship implicitly support the latter criticism, at least in the short run. First, not only are the SSA's exports to US dominated