H.R. 2845, AGOA Enhancement Act of 2015

H.R. 2845

AGOA Enhancement Act of 2015

Sponsor
Rep. Ed Royce

Date
September 7, 2016 (114th Congress, 2nd Session)

Staff Contact
John Huston

Floor Situation

On­­­­ Wednesday, September 7, 2016, the House will consider H.R. 2845, AGOA Enhancement Act of 2015, under suspension of the rules. H.R. 2845 was introduced on June 19, 2015, by Rep. Ed Royce (R-CA) and was referred to the Committee on Foreign Affairs, which ordered the bill reported by unanimous consent on November 5, 2015.

Bill Summary

H.R. 2845 would direct the President to increase public awareness of the African Growth and Opportunity Act (AGOA) and authorize several federal programs to encourage trade and economic cooperation with and between AGOA countries. In particular, the bill would:

  • Require the President to establish and update a public website for information on AGOA;
  • Authorize the President to encourage trade with and economic cooperation between countries in sub-Saharan Africa; and
  • Authorize the Millennium Challenge Corporation (MCC) to enter into another compact with a country solely for the purpose of increasing regional economic integration, trade, or other economic collaborations.

Background

The African Growth and Opportunity Act (AGOA) is a nonreciprocal trade preference program that provides duty-free treatment to U.S. imports of certain products from eligible sub-Saharan African (SSA) countries. There are 49 candidate SSA countries with 39 currently eligible for the preference benefits. Congress first authorized AGOA in 2000 to encourage export-led growth and economic development in SSA and improve U.S. economic relations with the region.[1] The Act was reauthorized through 2025 as part of H.R. 1295, the Trade Preferences Extension Act of 2015, which was signed into law June 29, 2015.

AGOA is similar to the Generalized System of Preferences (GSP), a U.S. trade preference program that applies to more than 120 developing countries, in terms of tariff benefits and general eligibility criteria. However, AGOA covers more products and includes additional eligibility criteria beyond those in GSP.  Additionally, AGOA includes trade and development provisions beyond its duty-free preferences.[2]

“U.S. imports from AGOA beneficiary countries represent a small share (1 percent) of total U.S. imports and are largely concentrated in energy-related products. Oil is consistently the top duty-free U.S. import from AGOA countries, accounting for 68 percent of such imports in 2014.”[3]

According to the bill sponsor, “AGOA provides economic opportunities to countries that show a commitment to good governance and democratic principles, and has helped thousands of Africans find much-needed work, helping U.S. exporters.  [This] bill will continue to improve trade capacity and relationships between African companies and the United States and help remove the bureaucratic barriers and needless red-tape that thwarts trade.  And it will mean new opportunities for U.S. farmers, manufacturers, and small businesses.”[4]

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[1] See CRS Report, “African Growth and Opportunity Act (AGOA): Background and Reauthorization,” June 16, 2015.
[2] Id. at Summary.
[3] Id.
[4] See Foreign Affairs Committee Press Release, “House Foreign Affairs Committee Passes Four Bipartisan Measures,” November 5, 2015.

Cost

The Congressional Budget Office (CBO) estimates that implementing the bill would cost less than $500,000 over the 2016-2020 period; such spending would be subject to the availability of appropriated funds.

Additional Information

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.