WASHINGTON, D.C. — On April 11, 2018, the African Growth and Opportunity Act (AGOA) and Millennium Challenge Act (MCA) Modernization Act was passed by the Senate. This bill seeks to expand vital programs currently in place to improve the lives of 11 million people.
Rep. Ed Royce (R-CA), House Foreign Affairs Committee Chairman, introduced the bill co-sponsored by Rep. Karen Bass (D-CA), Rep. Eliot Engel (D-NY) and Rep. Chris Smith (R-NJ). The bill passed in the House on January 17, 2018.
The passing of the AGOA and MCA Modernization Act will work to strengthen U.S.-African trade by providing capacity building training for African private sector leaders while addressing the root causes of poverty and extremism. By providing more flexibility to the AGOA and MCA, this act will expand regional trade opportunities and enhance market access to the U.S. for qualifying sub-Saharan African countries.
Currently, there are more 40 AGOA-eligible African countries. Since the passing of the AGOA in May 2000, market access to the United States has been enhanced, representing 55 percent of total U.S.-bound exports. Under the AGOA, 6,500 products have duty-free access to the U.S. worth $12 billion.
The AGOA and MCA Modernization Act makes the AGOA more effective by encouraging African embassies to promote export opportunities to the U.S. Furthermore, the act urges the president to establish a website with information regarding access to available AGOA benefits.
Furthermore, the Act calls on the president to:
- Facilitate trans-boundary trade among eligible nations
- Provide capacity building for African entrepreneurs and trade associations
- Provide training to promote product diversification and value-added processing
- Provide capacity building and funding to simplify compliance with U.S. counterterrorism policies for African businesses and institutions
The Millennium Challenge Corporation (MCC) provides time-limited grants (called compacts) which fuel economic growth, reduce poverty and solidify institutions. Working to help grow the impoverished countries of the world, the MCC focuses its efforts on nations committed to good governance, economic freedom and investing in their citizens. This means that eligible nations show a strong commitment to human rights and core labor laws. Promoting stability and prosperity not only betters the lives of the African people in these nations, but it also protects American interests by decreasing extremism.
The AGOA and MCA Modernization Act expands the reach and capability of the MCC by authorizing the allocation of more compacts to eligible African countries. By allowing two simultaneous compacts, the AGOA and MCA Modernization Act will promote trade, collaboration and economic integration.
Speaking on the floor of the U.S. House of Representatives in January 2018, Rep. Karen Bass highlighted the importance of expanding both the AGOA and the MCC through the AGOA and MCA Modernization Act. “The African Growth & Opportunity Act and the Millennium Challenge Corporation have proven track records of spurring economic development. Expanding these programs advances our position as international leaders, strengthens our domestic job market and economy, while protecting our national security interests.”
Through strong advocacy efforts from The Borgen Project and other foreign policy advocates, the AGOA and MCA Modernization Act has passed the Senate and is on its way to the president’s desk to be signed into law. With the past and present success of the AGOA and MCC, the AGOA and Modernization Act will continue to promote economic growth and international trade in African countries, empowering impoverished nations to develop stability and security. The Act will also continue to assist with U.S. efforts to fight terrorism and extremism while rewarding eligible nations for their focus on human rights.
– Kelilani Johnson