have not been stimulated by AGOA and would have occurred in the absence of AGOA. US imports under AGOA increased nearly three-fold between 2001 and 2004, but 89 percent of this increase is due to imports of crude oil. The recent increase in oil prices exacerbates the problem, since about half of the increase in the value of oil imports reflects increased quantities and the other half reflects higher prices. Hence, a meaningful analysis of the impact of AGOA needs to be based upon non-oil imports, which is the approach we take in the rest of this paper.

We start be comparing non-oil exports of AGOA beneficiaries<sup>5</sup> to the US with their exports to other regions, specifically the EU and Asia. Figure 1 shows that the EU is the main market for the exports of AGOA beneficiaries, accounting for around 60% of exports to these three regions. Non-oil exports from AGOA beneficiaries to all regions grew strongly over the first 5 years of this decade. Between 1999 and 2004 export growth to the US was the strongest and the share of the US in AGOA beneficiaries’ exports to these three regions increased from 14.3 to 16.6 percent<sup>6</sup> , although exports to the US declined in 2005 reflecting falling exports of apparel products. However, this export growth by AGOA beneficiaries is not broadly based. Some countries have seen very significant export growth while others have seen declines in the value of exports. For example, exports of Namibia to the US more than quadrupled between 1999 and 2005 while exports from Botswana have increased more than 10-fold (85% of the increase are due to increased diamond exports). On the other hand, exports from Ghana to the US fell by almost a half over the same period. Overall, 24 of the AGOA beneficiaries experienced a growth in non-oil exports since 1999 while exports declined for the remaining 13 beneficiaries.

Figure 1 shows total exports to the US and other regions but it does not isolate the impact of AGOA. Figure 2 shows the value of AGOA beneficiaries exports to the US that actually enter under AGOA, the value that enters under the GSP and finally the value of exports that does not enter under a specific program and is eligible to pay the normal (MFN) duty rate. For the vast majority of exports from these African countries that enter the US under no program the valid MFN duty is zero, reflecting exports of primary products and minerals. However, as noted above, there are a number of products that are excluded from AGOA preferences, mainly sensitive agricultural products and textiles, where exports from Africa are subject to, often very high, duties. Currently, the value of such exports is very low.

> 5 Our analysis is based on the 37 AGOA beneficiaries of 2005 that are listed in Table 1and look at the evolution of the exports of these countries as a group over time. Since AGOA was launched in 2001 Sierra Leone, Gambia, DR Congo, Angola and Burkina Faso have become beneficiaries. Burundi becomes a beneficiary in 2006. Countries that have been removed from the list of beneficiaries are Eritrea, Central African Republic and Cote d'Ivoire, while Mauritania loses eligibility in 2006.

> 6 Exports to the US have increased by 82 percent compared to a 57 percent increase in exports to the EU. However, in absolute terms the increase in the dollar value of exports to the EU is much larger, being more than double that of the increase in the dollar value of exports to the US. These trends in the dollar value of exports reflect the appreciation of the euro against the dollar over the period since 2001.

4