African Growth and Opportunity Act:

Observations on Competitiveness and Diversification of U.S. Imports from Beneficiary Countries

GAO-14-722R: Published: Jul 21, 2014. Publicly Released: Jul 21, 2014.

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Kimberly M. Gianopoulos
(202) 512-8612
gianopoulosk@gao.gov

 

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What GAO Found

U.S. imports from African Growth and Opportunity Act (AGOA) countries have increased since 2001, but AGOA countries' share of overall U.S. imports remained small and experienced declines in recent years. GAO analyzed total U.S. imports from AGOA countries, including both imports under AGOA (i.e., imports that received duty-free access claiming AGOA preference benefits) and other imports (i.e., imports that received duty-free access under other preference programs and international trade agreements, and imports with tariffs). From 2001 to 2008, total U.S. imports both under AGOA and other imports from these countries grew from $20 billion to $82 billion, an increase of 300 percent. However, since 2008, total imports have decreased by 53 percent. With regard to U.S. imports under AGOA, since 2008, they have also declined, from $56 billion to $25 billion, a decrease of 56 percent. GAO also found that AGOA countries' share of U.S. imports remains small, and in 2013, this market share was 2 percent.

U.S. imports from AGOA countries are dominated by petroleum; however, the share of non-petroleum imports has increased, leading to higher diversification in recent years. From 2001 to 2013, petroleum products accounted for over 80 percent of U.S. imports under AGOA. The share of non-petroleum products during the same period increased from 9 to 14 percent. In 2013, the top three non-petroleum products imported under AGOA were machinery and transportation equipment (59 percent), textiles and apparel (25 percent), and minerals and resources (8 percent). Diversification of U.S. imports under AGOA, as measured by the index that GAO constructed, has increased since 2001, but there were declines in the earlier years. From 2002 to 2011, the diversification of these imports declined from 24 percent to a low of 8 percent, grew to 10 percent in 2009, then declined to 9 percent in 2011. However, since 2011, the diversification of imports of products under AGOA has increased from 9 to 21 percent as measured by GAO's index of commodity concentration.

Why GAO Did This Study

Signed into law in 2000, AGOA is a U.S. trade preference program intended to stimulate economic development through export-led growth and help integrate Africa into the global economy. AGOA allows eligible Sub-Saharan Africa (SSA) countries to export qualifying goods to the United States without import duties. Prior U.S. government reports have indicated that integrating SSA countries into the global economy will require greater competitiveness of their exports. In addition, as GAO reported in 2008, an important goal of trade preferences is to help developing countries diversify the range of products that they export, and preferences are of little use in countries lacking the ability to produce goods desired by importers.

GAO was asked to examine a number of issues relating to AGOA countries' trade expansion and economic development, and factors affecting their trade with the United States and other countries. This report is the first in a series responding to the request and provides GAO's observations on AGOA countries' trade expansion as shown by import competitiveness and diversification.

To estimate competitiveness and diversification of U.S. imports from AGOA countries, GAO used U.S. Census data on U.S. imports from 40 countries in SSA that were participating in the AGOA program as of January 2014. GAO analyzed these data for calendar years 2001 to 2013. To estimate competitiveness, GAO calculated the share of total U.S. imports from AGOA countries from 2001 to 2013. In addition, GAO analyzed total U.S. imports of these countries' products under AGOA and other imports. GAO's analysis of diversification of U.S. imports under AGOA uses a measure of trade and commodity concentration to chart the level of diversification from 2001 to 2013. The index shows a value of 0 percent when imports are extremely concentrated and a value of 100 percent when imports are most diversified.

What GAO Recommends

GAO is not making any recommendations in this report.

For more information, contact Kimberly Gianopoulos at at (202) 512-8612 or gianopoulosk@gao.gov.

 

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