Risk of politicisation of Agoa’s expanded rules of origin for North African countries

By Michael Walsh

Earlier this month, US Senator Chris Coons publicly released a discussion draft for proposed legislation that would extend the African Growth and Opportunity Act (Agoa) beyond 2025.

Among other things, the discussion draft calls for a change in Agoa’s rules of origin that would permit inputs from African Continental Free Trade Agreement (AfCFTA) members “to count toward the requirement that 35% of a product’s value originate in the region”. This would benefit north African countries who are not eligible for preferential trade benefits under Agoa.

The U Mission to the US has been advocating for the expansion of Agoa to all AU member states.

Although the discussion draft does not go that far, the proposed extension in the rules of origin would probably strengthen the economic integration of Africa. And that would align with the Agreement Establishing the AfCFTA.

Under the terms of the discussion draft, “North African countries would be required to meet AGOA’s eligibility requirements related to governance, human rights, and foreign policy”. Otherwise, they will not be able to “participate in the expanded rules of origin”.

Interestingly, the proposed statutory language has become a cause for concern.

Some observers worry that it will be difficult for North African countries that have authoritarian regimes to be able to meet the criteria. This includes Algeria, Egypt and Libya.

Consider Libya. Per the Democracy Index, it is one of the more authoritarian governments in the world. Last year, the only African countries that received lower democracy scores were the Central African Republic, Chad, Democratic Republic of Congo, Equatorial Guinea and Eritrea.

While north African countries that have authoritarian regimes may face additional challenges in meeting the proposed eligibility requirements, it is unlikely that any will be excluded solely on the basis of authoritarian governance.

As argued elsewhere, there are no automatic triggers for disqualification. Agoa eligibility criteria have not been defined using objective criteria: “There are no benchmark indices. This leaves the eligibility status of any particular sovereign state open to textual interpretation by political actors in the executive branch.”

The historical record suggests that the political actors often have to strike a balance between criteria that pull in different directions. The criteria can include governance and human rights, on the one hand, and US national security and foreign policy interests, on the other.

When striking the balance, the Biden Administration has been putting disproportionate weight on US national security and foreign policy interests. It is, therefore, not surprising that the White House has a mixed record of non-compliance actions against countries with authoritarian regimes:

In some cases, it has withdrawn the eligibility of sub-Saharan countries that have authoritarian regimes. Examples include Burkina Faso, Central African Republic, Ethiopia, Gabon, Guinea, Mali and Niger.

In other cases, it has maintained the eligibility of sub-Saharan countries that have authoritarian regimes, including Angola, Chad, Comoros, Democratic Republic of Congo, Djibouti, Eswatini, Guinea-Bissau, Mozambique, Republic of the Congo, Rwanda and Togo.

Data Source: Economist Intelligence Unit. Eligibility Notes: 1) Equatorial Guinea was not eligible for consideration for Agoa benefits as it had graduated from the Generalized System of Preferences; 2) Sudan was not eligible for consideration for Agoa benefits as it had not requested designation as a Agoa beneficiary country; 3) Rwanda had its Agoa apparel benefits suspended; 4) Eligibility year is 2023.

When it comes to north African countries that have authoritarian regimes, observers should start worrying less about the determinations made by the executive branch and more about the oversight conducted by the legislative branch.

Although the US Congress is selective in its exercise of oversight on Agoa determinations made by the US president and members of Congress have demonstrated a willingness to publicly question the rationales of particular determinations on the basis of governance and human rights concerns, for example Mauritania.

Should the rules of origin be expanded, north African countries will need to constantly mitigate against this risk of politicisation in order to realise the full potential of participation in the expanded rules of origin.

Of course, this risk extends well beyond authoritarian governance. Look at the lively debates over the future eligibility of Uganda and South Africa. Those are less about governance and more about other eligibility criteria related to domestic and foreign policies.

Morocco and Tunisia will need to be mindful of this reality.