AGOA is a trade preference program that provides eligible sub-Saharan African countries duty-free access to U.S. markets for more than 6,000 dutiable items in the U.S. import tariff schedules. AGOA also includes goals related to U.S. government technical assistance in sub-Saharan Africa. Countries must meet certain eligibility criteria to take advantage of AGOA preferences, and the program had 41 such eligible countries as of December 1, 2014. AGOA legislation directs the President to target technical assistance to serve specific TCB-related goals that promote economic reform and development, and to develop and implement certain policies aimed at encouraging investment in sub-Saharan Africa. With regard to technical assistance, AGOA directs the President to focus such assistance on the following goals: 1. Develop relationships between U.S. and sub-Saharan African firms through business associations and networks. 2. Provide assistance to the governments of sub-Saharan African bringing legal regimes into compliance with the standards of the liberalizing trade and promoting exports, making financial and fiscal reforms, and promoting greater agribusiness linkages. 3. Address critical agriculture policy issues such as market liberalization, agriculture export development, and agribusiness investment in processing and transporting agriculture commodities. 4. Increase the number of reverse trade missions to growth-oriented countries in sub-Saharan Africa.5. Increase trade in services. 6. Encourage greater sub-Saharan African participation in future negotiations in the World Trade Organization (WTO) on services and making further commitments to encourage the removal of tariff and nontariff barriers. Trade in services refers to the buying and selling of intangible products and activities; examples of trade-in-services sectors include tourism, financial services, and telecommunications. See GAO, Sub-Saharan Africa: Trends in U.S. and Chinese Economic Engagement, GAO-13-199 (Washington, D.C.: Feb. 7, 2013). manufacturing sectors, including problems with cost and quality of inputs, access to finance, trade logistics such as the high cost of transporting goods, and inadequate workforce skills. The International Finance Corporation, a member of the World Bank Group, has reported that less than a quarter of adults in sub-Saharan Africa have access to formal financial services, and lack of access to finance is a constraint to economic growth overall, and the growth of small and medium-sized enterprises in the region. Another study found that AGOA apparel production is concentrated in low-skill tasks with little knowledge transfer to local workers, and that the global competitiveness of AGOA exporters still depends on the preferences they receive under AGOA. Many AGOA countries lack the capacity to produce and export goods in the necessary quantity and at the quality U.S. markets require. This same challenge may also affect potential investors' decisions about engaging in Africa. Literature on AGOA and TCB has also shown that poor infrastructure conditions in sub-Saharan Africa remain a key challenge that undermines export competitiveness. In 2014, USITC reported that weak transportation infrastructure, including poor rural roads, inefficient port facilities, and burdensome customs procedures are among the impediments to export growth and competitiveness for sub-Saharan Africa. The report noted that a number of factors directly affect the cost and timeliness of delivery of goods to the U.S. market, including distance to market, perishability of products, freight rates, and reliability of trade linkages. Since at least 2001, the United States has provided TCB assistance to developing countries to help them participate in and benefit from global trade. U.S agencies generally define TCB broadly to include all types of development assistance that enhance a country's ability to secure benefits from international trade. Among other things, such assistance can address (1) the regulatory environment for business, trade, and investment; (2) constraints such as low capacity for production and entrepreneurship; and (3) inadequate physical infrastructure, such as poor transport and storage facilities. USAID collects data to identify and quantify the U.S. government's TCB activities in developing countries through an annual survey of U.S. agencies and maintains the survey results in the U.S. government's publicly available online TCB database.This database of TCB funding defines 14 categories of TCB assistance provided by the U.S. government (see app. II for a detailed list of TCB category definitions and examples of related activities). The majority of U.S. TCB funding for AGOA countries from 2001 through 2013 was provided for three categories of activities: trade-related infrastructure, trade-related agriculture, and trade facilitation (see fig. 1). Total U.S. government funding for TCB assistance for AGOA countries from 2001 to 2013 was approximately $5 billion. In that time period, U.S. government TCB assistance for AGOA countries peaked in 2008 and declined sharply in 2012 (see fig. 2). The U.S. government provided funding for TCB assistance from 2001 through 2013 for all 41 AGOA countries. Sixty-eight percent of all U.S. government TCB funding obligated for AGOA countries from 2001 through 2013 was for 10 of these countries (see table 1). Although the President affirmed the U.S. government's commitment to providing TCB assistance for AGOA countries in August 2014, no single agency is responsible. According to our analysis of the U.S. government's TCB database, MCC and USAID are the agencies that reported providing the most funding for AGOA countries, and accounted for 90 percent of all TCB assistance to these countries from 2001 through 2013 (see fig. 3). While USAID funds activities that have clear and direct links to TCB, MCC funds activities that may be more indirectly related to international trade. MCC conducts TCB-related activities that support its broader strategic and agency goals. In contrast, one of USAID's core development objectives is to promote sustainable, broad-based economic growth by helping developing countries increase their exports through trade capacity building. USAID aims to achieve its TCB goal by supporting participation in trade negotiations, implementation of trade agreements, and economic responsiveness to trade opportunities. USAID also collects data to identify and quantify the U.S. government's TCB activities through an annual survey of U.S. agencies and maintains the survey results in the U.S. government's publicly available online TCB database. MCC's TCB-related activities in sub-Saharan Africa are supportive of AGOA. MCC identifies a relationship between AGOA and the agency's role in improving economic growth, including through its trade-related infrastructure activities in selected sub-Saharan African countries. According to agency officials, MCC's focus on economic growth and encouraging private sector investment is in line with the goals of AGOA. Furthermore, agency officials said that MCC infrastructure-related investments have included a number of projects that support global trade in sub-Saharan Africa. From 2005 through 2013, MCC funded TCB activities in 15 of the 41 AGOA countries (see table 2). MCC's TCB funding for AGOA countries has supported a range of TCB activities, largely focused on trade-related infrastructure. MCC's TCB assistance in AGOA countries has covered 10 of the 14 TCB categories, with the majority of funding, over 75 percent, concentrated on trade- related infrastructure (see fig. 4). MCC's trade-related infrastructure projects in AGOA countries cover a range of activities including building roads, improving ports, and expanding access to electricity. For example, MCC compacts in Mozambique and Malawi include large infrastructure components, as described below: Mozambique. MCC signed a compact with Mozambique in 2007 for about $506.9 million, of which about $222 million was obligated for TCB-related activities, mostly concentrated on trade-related infrastructure. This compact included $176 million in trade-related infrastructure assistance for a roads project rehabilitating 491 kilometers of key segments of the country's transportation network. The project aimed to improve access to markets, resources, and services; reduce transport costs for the private sector; and expand connectivity across the region. Malawi. MCC signed a compact with Malawi in 2011 for $350.7 million, and data show that the entire amount was obligated for trade- related infrastructure activities. Specifically, the compact is a single- sector power revitalization project that aims to increase the capacity and stability of the national electricity grid and bolster the efficiency and sustainability of hydropower generation. Officials we spoke to in Ghana and Ethiopia, the two AGOA countries where we conducted fieldwork, highlighted a range of ongoing infrastructure improvements and challenges. Business representatives in Ghana, where MCC funded $240 million in TCB-related assistance, noted that U.S. TCB activities had helped to reduce problems with land transportation. In Ethiopia, a representative from local business noted that infrastructure challenges had been diminished through improvements in transportation, which had reduced costs for importing and exporting goods. Officials and local business representatives in both Ethiopia and Ghana also cited a range of ongoing infrastructure challenges that acted as an impediment to conducting business. For example, in Ethiopia, officials cited infrastructure issues, among others, as an impediment to conducting business in the country, and representatives of local businesses noted that further investment was needed in services such as power, roads, and telecommunications. In addition, officials in Ghana stated that port congestion caused delays, and the manufacturing sector was diminished partly because of a lack of access to reliable power. A partnership among the U.S. government, African governments, the private sector, and others, Power Africa aims to expand access to electricity to households and businesses and increase Africa's global competitiveness. governments to increase internal and regional trade within Africa, and expand trade and economic ties among Africa, the United States, and other global markets. USAID's TCB funding has supported a range of TCB activities for AGOA countries, with trade-related agriculture and trade facilitation being the two largest categories. USAID has funded TCB assistance activities in 39 of 41 AGOA countries; see table 3 for AGOA countries with the highest USAID TCB funding. USAID's TCB assistance activities in AGOA countries covers all 14 TCB categories, with the majority of funding, over 75 percent, concentrated on trade-related agriculture, trade facilitation, and trade-related infrastructure (see fig. 5). From 2002 to 2004, USAID established three regional trade hubs in sub- Saharan Africa that serve as primary implementers of U.S. TCB These USAID- assistance for sub-Saharan African countries (see fig. 6).funded trade hubs are staffed with regional advisers who provide a range of services to U.S. agencies, African governments, and the private sector, noted as follows: East Africa trade hub, established in Nairobi, Kenya, in 2002. This hub aims to increase food security and economic growth in the following 9 East or Central African countries: Burundi, Ethiopia, Kenya, Madagascar, Mauritius, Rwanda, South Sudan, Tanzania, and Uganda. West Africa trade hub, established in Accra, Ghana, in 2003. This hub focuses on addressing critical issues that hamper export competitiveness such as high transport and telecommunications costs, limited access to finance, and inconsistent implementation of regional trade policies in 20 West African countries: Benin, Burkina Faso, Cameroon, Cape Verde, Chad, Cote d'Ivoire, Gabon, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Sao Tome and Principe, Senegal, Sierra Leone, and Togo. Southern Africa trade hub, established in Gaborone, Botswana, in 2004. This hub's primary goals are to increase international competitiveness, as well as intraregional trade and food security, by promoting greater competitiveness in agriculture value chains, increasing investment and export opportunities in the textile and apparel sector, and supporting a better business-enabling environment in 8 Southern African countries: Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, and Zambia. Along with implementing activities to support U.S. initiatives in areas such as food security, USAID-funded trade hubs seek to support trade facilitation, market linkages, and information awareness about AGOA to AGOA-exporting firms and countries. For example, from 2007 through 2012, USAID provided funding for activities implemented through the West Africa trade hub to address economy-wide constraints such as the transport and trade barriers affecting the region's ports, corridors, and borders. The trade hub established an advocacy campaign to address such trade barriers and help decrease the costs associated with trading. The trade hub also worked with governments in the region to establish border information centers that help stakeholders coordinate, and provide information and assistance to traders at borders to ease transport bottlenecks. The trade hub in East Africa has helped subsidize the cost to exporters of attending trade shows to gain exposure to U.S. markets in sectors including leather goods and apparel, and has facilitated U.S. buyers going to sub-Saharan Africa. Among its trade-related agriculture activities, the Southern Africa trade hub has provided training to medium- and large-scale commodity buyers and storage operators trading in maize and soybeans to help reduce postharvest loss and improve procurement practices. Officials we spoke to in Ethiopia and Ghana cited some improvement in areas where USAID has provided TCB assistance while highlighting other ongoing challenges related to facilitating exports under AGOA. Although the West Africa trade hub began efforts in 2009 to help facilitate financial services for local companies, local business representatives from the cashew and shea industries in Ghana said lack of access to finance and the business community's lack of awareness on how to use AGOA remain challenges to utilizing AGOA. A representative of the horticulture industry in Ethiopia cited inefficient customs processes and lack of access to finance in the country as challenges to more fully utilizing AGOA. He also said that while certain logistical challenges had been addressed in terms of direct airline routes to the United States, increasing awareness of the Ethiopian flower industry would help improve access to the U.S. market. The owner of a textile goods company who had exported products under AGOA said he was unable to obtain certain inputs for his products in Ethiopia, a fact that affected decisions on what to produce. Furthermore, he said local businesses were rudimentary when AGOA was signed, and are only now building export capacity and an understanding of the U.S. market. A business representative from the apparel industry said that logistics remain a challenge to exports because of high transportation costs that may discourage potential buyers. He noted the high cost of moving shipments from Ethiopia to the port in Djibouti, and also that lengthy transport schedules create longer lead times to fill orders. Like other members of the private sector we spoke to, he said that local companies have limited access to capital, and that obtaining financing requires a number of bureaucratic steps. USAID works with some host governments to develop strategic approaches to increasing AGOA utilization. As previously noted, one of USAID's core development objectives is to promote sustainable, broad- based economic growth by helping developing countries increase their exports through trade capacity building. AGOA legislation also directs the President, in part, to target assistance to sub-Saharan African governments. USAID has identified trade hubs as primary implementers of TCB assistance to African governments and organizations, among others. USAID, partly through the trade hubs, has supported AGOA utilization by collaborating with African governments to develop AGOA- specific or national export strategies. In the strategy documents, host governments may identify high-priority trade and investment sectors, constraints related to AGOA utilization, and specific steps to increase exports under AGOA. For example, the East Africa trade hub participated in a 2013 workshop with officials from the Mauritian government, and helped the host government develop and publish its AGOA-specific national strategy, which aims to support the ability of Mauritian firms to sell to the U.S. market and leverage opportunities that AGOA provides. Data from USAID also indicate that trade hubs provided input toward strategies that the Gambia and Senegal have developed. We previously identified the importance of strategic planning efforts in results-oriented management. Specifically, we found that such strategic planning efforts are the starting point and foundation for defining what the organization seeks to accomplish, and in identifying the strategies it will use to achieve desired results. Furthermore, developing a strategic plan can help clarify organizational priorities and unify staff in the pursuit of shared goals. If done well, strategic planning fosters informed communication between the organization and its stakeholders. In the case of AGOA utilization, this may include collaboration between U.S. and host governments, and the private sector. Literature and trade hub reports have noted the potentially positive effects such strategies can have on countries' utilization of AGOA. USAID, through its trade hubs, has stated that identifying strategic needs and priorities through national strategies can bolster AGOA utilization. For example, in a 2013 report prepared for USAID, the West Africa trade hub noted the importance of a strategy as part of leveraging trade preferences, and the role that USAID and other U.S. agencies can play in encouraging strategy development. countries, including Burkina Faso and Sierra Leone, that have implemented strategies as tools to better utilize AGOA. Similarly, the East Africa trade hub reported that national strategies reflect host governments' strategic needs in approaching the U.S. market and outline ways governments can utilize AGOA. According to contractors who implement activities at one of the trade hubs, export strategies allow governments to target specific sectors and work with the private sector toward a unified approach. CARANA Corporation, West Africa Trade Hub Final Report, a report prepared at the request of USAID, August 2013. African leaders have also articulated the importance of strategic approaches to enhancing AGOA utilization. At the 2011 AGOA Forum held in Zambia, an African trade minister underscored the importance of clear AGOA national strategies because they help ensure that countries assess export promotion challenges in a coordinated manner, and U.S. agency officials said that African leaders had committed to developing more AGOA-related strategies at the August 2014 Africa Leaders Summit. Furthermore, in a January 2014 testimony to USITC, a senior African official said AGOA countries have recognized the need to address various supply-side constraints that have hindered AGOA utilization, including poor infrastructure, by developing a coordinated, strategic response at the national level. This official also noted that this strategic exercise would enable AGOA countries to identify supply-side constraints and potential responses, and may ultimately enable the U.S. government to better support African countries. For example, the Ethiopian government has drafted a national strategy that identifies high-priority industries that align with AGOA trade preferences. While this document is still in draft form, the Ethiopian trade ministry notes that its AGOA national strategy is an important part of the country's overall growth plan, given that AGOA is a useful market opportunity to achieve Ethiopia's larger economic growth objectives. According to officials, the government also plans to establish an AGOA center to oversee implementation of the strategy. Though USAID has made efforts to work with host governments on developing strategic approaches to AGOA utilization, 14 out of the 41 current AGOA countries have such strategies in place, according to data from USAID (see fig. 7). According to a white paper from the United Nations Economic Commission for Africa and the African Union, the lack of a strategic approach on AGOA is a significant reason for gaps in AGOA utilization. A 2011 Brookings Institution report identified the lack of an AGOA national strategy as one factor inhibiting Ghana from fully benefitting from AGOA. According to officials and information from trade hubs, AGOA countries may lack these strategies because such efforts have not been prioritized in work plans, and because of an absence of political will among host governments. Specifically, in its work plans for all three trade hub contracts, USAID has noted the importance of coordinating with bilateral USAID missions, regional entities in sub-Saharan Africa, and host governments, among others. However, USAID only included the development of national strategies as a high-priority task for the East Africa trade hub, and not for the West and Southern Africa trade hubs. Furthermore, a lack of host government interest could influence the effectiveness of such efforts. A West Africa trade hub report noted that political will is needed to sustain strategy development efforts in those AGOA countries that lack such strategies. USAID officials also said that host governments must request and initiate the process of developing these strategies, and the lack of political will to motivate these efforts may be one reason some AGOA countries do not have such a strategic approach. For example, according to literature, some USAID TCB assistance programs in sub-Saharan Africa have faced challenges in gaining buy-in from regional participating governments and in ensuring agreement on the direction and pace of adoption of relevant processes and procedures. USAID officials acknowledged they could do more to work with host governments on strategy development to enhance AGOA utilization, and officials said they are starting to work with regional entities to develop strategic approaches to export promotion. The U.S. government has acknowledged the importance of providing TCB assistance in support of AGOA, and U.S. agencies have obligated approximately $5 billion in TCB assistance for AGOA countries over a 13- year period. As Congress deliberates reauthorization of the AGOA program, policymakers have expressed interest in enhancing eligible countries' ability to utilize the program and ensuring that TCB assistance is aligned with the program's objectives. A strategic approach to AGOA utilization can help eligible countries leverage U.S. TCB efforts and trade preferences under AGOA, while a lack of a strategic approach to AGOA can result in gaps in program utilization. Although USAID has worked with some host governments from AGOA countries to develop strategic approaches to program utilization, about a third of the 41 AGOA countries currently have strategies that reflect AGOA priorities. USAID has not prioritized the development of these strategies for all three of its regional trade hubs, which play a significant role in implementing TCB in AGOA countries and working with host governments. A lack of political will among host governments may also pose challenges to developing and sustaining strategic approaches related to AGOA. In developing these approaches, eligible countries can identify trade barriers that inhibit AGOA utilization and articulate a commitment to addressing these barriers. Such strategies could also assist U.S. agencies in ensuring that TCB assistance is aligned with host government priorities and is addressing gaps in AGOA utilization. To enhance eligible countries' ability to utilize the AGOA program and ensure that TCB assistance is aligned with program objectives, we recommend that the Administrator of USAID work with more host governments to develop strategic approaches to promoting exports under AGOA. We received written comments on a draft of this report from USAID, which are reprinted in appendix III. USAID stated that it agreed with the report's overall findings, conclusions, and recommendations. USAID also made a number of observations and comments related to the findings and recommendation in the report. USAID commented that our report does not provide sufficient data to demonstrate the linkage between host government strategic approaches and AGOA utilization. However, as we point out in our report, such strategies can have potentially positive effects on countries' utilization of AGOA. We cite prior GAO work that notes the importance of strategic planning efforts in results-oriented management; and literature, trade hub reports, and statements from African leaders that also emphasize the importance of strategic approaches to enhancing AGOA utilization. USAID stated that our report does not include the point that the productivity of African businesses is negatively impacted by a lack of access to reliable electricity. However, our report does in fact note observations from our field work in Ghana and Ethiopia regarding challenges resulting from lack of access to power. Finally, USAID explained that its trade hubs are designed as regional programs and therefore often prioritize regional efforts over bilateral strategy development. In our report we acknowledge the regional focus of USAID-funded trade hubs and also note that USAID is starting to work with regional entities to develop strategic approaches to export promotion. Commerce, State, the Treasury, MCC, USITC, and USTR also received a draft copy of the report but did not provide formal comments. USAID, USITC, and USTR provided technical comments, which we have incorporated in the report, as appropriate. We are sending copies of this report to the appropriate congressional committees, the Secretaries of Commerce, State, and the Treasury; the Chief Executive Officer of MCC; the Administrator of USAID; the Chairman of USITC; the U.S. Trade Representative; and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-8612 or GianopoulosK@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix IV. Our objectives were to examine (1) U.S. government trade capacity building (TCB) assistance in support of the African Growth and Opportunity Act (AGOA), and (2) the extent to which the U.S. Agency for International Development (USAID) has made efforts to develop strategic approaches to AGOA utilization. To address both objectives, we interviewed officials from the Departments of Commerce, State, and the Treasury; the Millennium Challenge Corporation (MCC); and USAID, but focused on MCC and USAID for the purposes of this report because these agencies obligated the highest amounts of TCB funding from fiscal years 2001 through 2013. We also interviewed officials from the Office of the U.S. Trade Representative and the U.S. International Trade Commission (USITC), agencies that do not provide funding for U.S. TCB assistance but provided additional contextual information on AGOA and TCB. We reviewed documents including literature on AGOA and TCB; statements of work, evaluations, and annual reports for the three USAID-funded trade hubs; program documents for MCC activities in sub-Saharan Africa; and examples of AGOA-specific and national export strategies. We also conducted fieldwork in Ethiopia and Ghana, countries we selected because they represented a cross section of U.S. TCB assistance and are in different regions within sub-Saharan Africa, thereby also providing insight on two out of the three trade hubs. In each country, we interviewed U.S. agency officials, host government officials, representatives from the private sector who had insights on U.S. TCB assistance, and contractors implementing TCB activities. Our findings from these countries are not generalizable to the universe of all U.S. TCB activities. To examine U.S. government TCB assistance in support of AGOA, we reviewed documents from relevant U.S. agencies, including program descriptions and evaluations, and analyzed data on U.S. TCB funding to AGOA countries. We focused our analysis on the U.S. agencies that provided the highest amounts of TCB funding for AGOA countries from fiscal years 2001 through 2013. We analyzed data USAID provided on annual U.S. TCB obligations for activities in all AGOA countries from fiscal years 2001 through 2013 by year, agency, country, and TCB category. These data are reported in the U.S. government TCB database, but we requested data directly from USAID to facilitate our analysis of the data for the purposes of this report. We also relied on the data and information from the TCB database, such as TCB activity descriptions. In our analysis of TCB funding data, we built upon information collected for prior GAO reports on TCB that used data from the TCB database. Data from the TCB database were deemed reliable for our prior reports on TCB. For this report, we determined that the data were sufficiently reliable to identify TCB funding by agency, country, category, and year. Furthermore, in assessing the data, we interviewed key USAID officials responsible for administering the database and reviewed supporting documentation. To examine the extent to which USAID has made efforts to develop strategic approaches to AGOA utilization, we reviewed documents from relevant U.S. agencies, including program descriptions and evaluations, and information on AGOA-specific and national export strategies from U.S. agencies and host governments. In addition, we discussed the development of these strategic approaches with U.S. and foreign government officials. We conducted this performance audit from March 2014 to January 2015 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. As we noted in 2011, the U.S. Agency for International Development (USAID) collects data to identify and quantify the U.S. government's trade capacity building (TCB) activities in developing countries through an annual survey of U.S. agencies. The U.S. government TCB database defines the categories as follows: World Trade Organization (WTO) Accession and Compliance: support for countries to benefit from membership in the WTO, or to understand fully the benefits of membership. Also assistance to help countries in the WTO accession process meet the requirements of accession. This category includes assistance to meet the obligations of the specific WTO agreements, except for Agreements on Sanitary and Phyto-Sanitary Measures (SPS), Technical Barriers to Trade (TBT), Intellectual Property Rights (IPR), and Trade-related Procurement. Those four agreements benefit from TCB in their own categories. Sanitary and Phyto-Sanitary Measures: support for countries to meet SPS standards for trade and to comply with the WTO Agreement on SPS. Technical Barriers to Trade: support for countries to reduce technical barriers to trade and to comply with the WTO Agreement on TBT. Intellectual Property Rights: support for countries to observe international standards on intellectual property rights protection and to comply with the WTO Agreement on IPR. Trade-Related Procurement: support for increased trade related to government procurement and to comply with the WTO Agreement on Government Procurement. Trade Facilitation: generally defined as assistance in lowering the costs of engaging in, or eliminating obstacles to, international trade flows. Trade facilitation (for 2011) is a sum of the following four subcategories: Customs Operations: includes assistance to help countries modernize and improve their customs offices. Trade Promotion: includes assistance to increase market opportunities for developing country and transition economy producers. Enterprise Development: includes support to improve the associations and networks in the business sector, as well as to enhance the skills of business people engaged in trade. Also includes assistance to help countries acquire and use information technology to promote trade by creating business networks and disseminating market information. Free Trade Agreements (FTA) and Trade Integration: includes assistance to an FTA, a regional trade agreement (RTA), or an individual country that increases the ability of the RTA to facilitate trade. It can also include assistance to a potential member of an RTA that improves the analytical capacity of the country's government with respect to RTA issues. Trade-Related Labor: assistance to support the enforcement of labor standards and worker rights, development of trade unions and dispute resolution mechanisms, strategies for workforce development and worker training, and the elimination of child labor. Financial Sector: support for financial sector work, monetary and fiscal policy, exchange rates, commodity markets, and capital markets. Trade-Related Infrastructure: assistance to establish trade-related telecoms, transport, ports, airports, power, water, and industrial zones. Environmental Sector Trade and Standards: assistance to establish environmental standards or to promote environmental technology. Competition Policy, Business Environment, and Governance: support for the design and implementation of antitrust laws, as well as of laws and regulations related to investment and investor protections. Includes support for legal and institutional reform to improve governance and make policies more transparent, and assistance to help the different agencies of a host country government function more effectively in the trade policy arena. Trade-Related Agriculture: support for trade-related aspects of the agriculture and agribusiness sectors. Trade-Related Services: includes support to help developing countries and transition economies increase their flows of trade in services. Services Trade Development is a sum of two subcategories: Trade-Related Services (excluding tourism): assistance to help countries develop trade in services in all sectors other than tourism, including financial services, energy, transportation, and education. Trade-Related Tourism: assistance to help countries expand their international tourism sectors, including eco-tourism. Other Trade Capacity Building: A small number of TCB activities did not fit in any of the above categories, including some activities of a crosscutting nature. These were categorized as "Other Trade Capacity Building." In addition to the contact listed above, Juan Gobel (Assistant Director), Diana Blumenfeld, Farhanaz Kermalli, Farahnaaz Khakoo-Mausel, and Ben Sclafani made key contributions to this report. Godwin Agbara, Debbie Chung, Qahira El'Amin, Etana Finkler, Ernie Jackson, and Jill Lacey provided additional assistance. Foreign Assistance: USAID Should Update Its Trade Capacity Building Strategy. GAO-14-602. Washington, D.C.: Sept. 10, 2014. African Growth and Opportunity Act: Observations on Competitiveness and Diversification of U.S. Imports from Beneficiary Countries. GAO-14-722R. Washington, D.C.: July 21, 2014. Sub-Saharan Africa: Trends in U.S. and Chinese Economic Engagement. GAO-13-199. Washington, D.C.: Feb. 7, 2013. Foreign Assistance: The United States Provides Wide-ranging Trade Capacity Building Assistance, but Better Reporting and Evaluation Are Needed. GAO-11-727. Washington, D.C.: July 29, 2011. U.S.-Africa Trade: Options for Congressional Consideration to Improve Textile and Apparel Sector Competitiveness under the African Growth and Opportunity Act. GAO-09-916. Washington, D.C.: Aug. 12, 2009. International Trade: U.S. Trade Preference Programs: An Overview of Use by Beneficiaries and U.S. Administrative Reviews. GAO-07-1209. Washington, D.C.: Sept. 27, 2007. Foreign Assistance: U.S. Trade Capacity Building Extensive, but Its Effectiveness Has Yet to Be Evaluated. GAO-05-150. Washington, D.C.: Feb. 11, 2005.

Summary:
Signed in 2000, AGOA directs the President to provide TCB assistance to sub-Saharan African governments and firms to promote exports and develop infrastructure, among other things. AGOA provides duty-free access on qualifying U.S. imports from eligible sub-Saharan African countries, a total of 41 countries as of December 1, 2014. From 2001 through 2013, U.S. agencies funded about $5 billion in TCB assistance to AGOA countries. GAO was asked to review various issues related to the ability of AGOA countries to utilize AGOA prior to its expiration on September 30, 2015. In this report, GAO examines (1) U.S. government TCB assistance in support of AGOA, and (2) the extent to which USAID has made efforts to develop strategic approaches to AGOA utilization. GAO focused on MCC and USAID because these two agencies accounted for nearly 90 percent of funding for TCB activities in AGOA countries from 2001 through 2013. GAO analyzed data on U.S. TCB assistance to AGOA countries in this period, reviewed agencies' funding and program documents, conducted interviews with officials who implement U.S. TCB assistance, and met with U.S. and foreign government officials and private sector representatives in Ethiopia and Ghana. Among U.S. agencies, the Millennium Challenge Corporation (MCC) and the U.S. Agency for International Development (USAID) have funded the majority of trade capacity building (TCB) assistance in support of the African Growth and Opportunity Act (AGOA) (see figure). MCC obligated nearly $3 billion in funding for TCB activities in 15 of the 41 countries eligible for AGOA (AGOA countries), with the majority of funds provided for trade-related infrastructure projects. For example, MCC obligated $176 million for a roads project in Mozambique that aimed to improve the transportation network, including access to markets and reduction of transport costs. USAID obligated approximately $1.6 billion in funding for TCB activities in 39 of the 41 AGOA countries, with the majority of funds provided for trade-related agriculture and infrastructure, and trade facilitation. For example, USAID funded activities to help exporters in East Africa build business linkages with U.S. markets through trade shows. Note: Funding amounts or percentages may not sum to totals because of rounding. USAID has worked with some host governments to develop strategic approaches to AGOA utilization; however, most host governments have not established such approaches. USAID-funded regional trade hubs in sub-Saharan Africa have supported AGOA utilization by, among other things, collaborating with some host governments to develop AGOA-specific or broader national export strategies. Trade hub evaluations and statements from host government officials show that identifying strategic needs and priorities through strategic approaches can bolster AGOA utilization and help assess challenges to expanding exports. In strategy documents, host governments may identify high-priority trade and investment sectors, constraints related to AGOA utilization, and specific steps to increase exports under AGOA. Lack of a strategic approach has been identified as a significant reason for gaps in AGOA utilization. As of December 2014, 14 of the 41 AGOA countries had strategies reflecting AGOA priorities. According to USAID officials, host governments must initiate the process of developing a strategy, and a lack of political will may pose challenges to such efforts. GAO recommends that the Administrator of USAID work with more host governments to develop strategic approaches to promoting exports under AGOA. USAID agreed with the recommendation.