US-Africa trade deal, now in its 24th year, could help diversify US critical mineral supplies

The African Growth and Opportunity Act (AGOA) is a landmark piece of trade legislation that has boosted exports from eligible African countries to the United States, but also the latter reaps benefits from the deal, including through the ongoing reauthorization process that could facilitate the expansion of the trade in critical minerals between both sides.

The AGOA, enacted by Washington in 2000, has aimed to promote economic growth, development and poverty reduction in sub-Saharan Africa by providing qualifying countries with duty-free access to the US market for over 6,500 products, says Bedassa Tadesse, Professor of Economics from University of Minnesota.

In a recent article published in The Conversation, he outlines four key observations from his research on AGOA’s impact on the economic performance of sub-Saharan Africa: firstly, some African countries have benefited more than others; secondly, some African countries have not benefited much; thirdly, the uneven benefits were down to several factors, such as the state of the infrastructure, governance, national policies, economic environment or the level of economic diversification and export capabilities, finally, while the US Senate is considering extending AGOA for another 16 years, it is also vital to consider the lessons learned from the past 25 years.

But, as a new policy paper published by Carnegie Endowment for International Peace notes, also the US is poised to reap more benefits from the AGOA trade legislation, as the ongoing reauthorization process could facilitate the expansion of US-Africa trade in critical minerals, which would be mutually beneficial for all parties. The US has been seeking to source the supplies of minerals and metals that are “critical” to support its clean energy transition and diversify the attendant supply chains away from geopolitical competitors, most notably China. The authors argue that such trade expansion facilitated by AGOA could serve both the US strategic interests by diversifying the sources of critical minerals, as well as the economic interests of African countries by attracting investments in value chain development of these commodities.