Opportunities for Botswana Based Enterprises to enter the US market under African Growth and Opportunity Act (AGOA)
The African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000 to offer tangible incentives for Sub-Saharan Africa (SSA) countries to continue their efforts to open their economies open and build free markets. AGOA accords duty free and quota free treatment to virtually all products exported by beneficiary SSA countries to the US until 30 September 2015.
Benefits for Exporting through AGOA:
• Duty-free and quota free access for eligible products
• Provision of beneficiary countries with a significant competitive advantage over non-AGOA countries that must pay normal tariff rates to enter the United States
• Promotion of export diversification in AGOA countries through its provision of duty-free and quota-free benefits to virtually all products
The following are the eligibility requirements, which were developed by the US Government in consultation with African countries.
• Beneficiary countries must establish, or continual progress toward establishing, a market-based economy; removal of barriers to U.S. trade and investment; establishment of rule of law; efforts to combat corruption; protection of intellectual property rights and internationally recognized worker rights and policies to reduce poverty
• Beneficiary countries cannot engage in activities that undermine U.S. national security or foreign policy interests; cannot engage in gross violations of internationally recognized human rights; cannot provide support for acts of international terrorism, and must have implemented their commitments to eliminate the worst forms of child labor.
• Transshipment of goods is not allowed under AGOA except where a country relies on sea ports of its neighboring countries to export to USA, e.g Botswana.
Products eligible for AGOA benefits:
Nearly all products exported by SSA countries to the United States are eligible with very few exceptions, as long as they meet the AGOA rule of origin requirements and are exported directly from a beneficiary country to the United States.
• It is a pre-requisite that exporters of both non-textile and textile products, be registered with the Department of Customs and Excise prior to exportation. Registration is by way of written application to export, specifying the type of raw materials used in the production process, where the raw materials originate, and the process of manufacturing. There is also a requirement that customs inspects the manufacturing plant and company documents.
• Textile and apparel manufacturers and exporters are required to complete customs application forms CE 48 A 1.03 and CE A1.02 respectively.
Getting more information about AGOA:
More information on AGOA can be accessed online through the Sothern Africa Trade Hub website, www.satradehub.org. The SA Trade Hub, which is one among the three hubs in Africa, has been established to help Southern African businesses sell more of their product on the global markets.