	Introduction

In 2000, Congress passed the African Growth and Opportunity Act (AGOA), a U.S. trade preference program, in order to help spur market-led economic growth and development in sub-Saharan Africa (SSA) and deepen U.S. trade and investment ties with the region. A related measure, H.R. 1295 , which includes AGOA reauthorization among other tariff reforms, passed the House and Senate in different forms requiring the two chambers to resolve the differences in the bill before it can be sent to the President and become law (see " Proposed Renewal Legislation " section for details). 106-200 ), as amended, is a nonreciprocal preference program that provides duty-free access into the United States for qualifying exports from eligible SSA countries. It highlights the 39 current AGOA beneficiary countries, and notes their eligibility status for other aspects of the AGOA preferences and the Generalized System of Preferences (GSP). In terms of these tariff benefits and country eligibility requirements, AGOA is essentially an expansion of GSP, a U.S. trade preference program that applies to over 120 developing countries, including SSA countries. Apparel production has been a significant component in some countries' economic development. Third-Country Fabric Provision

AGOA's third-country fabric provision is a special rule that allows U.S. apparel imports from least-developed SSA countries to qualify for duty-free treatment even if the yarns and fabrics used in the production of the apparel are imported from non-AGOA countries. Eligibility

Eligibility for the AGOA trade preference program consists of two separate steps. U.S. Imports under AGOA and GSP40

U.S. imports from AGOA countries represent a small share of overall U.S. imports. Excluding crude oil, 35% of U.S. imports from AGOA countries received duty-free treatment under AGOA or GSP. Energy-related products (e.g., crude oil) dominate U.S. imports from SSA under AGOA and GSP, representing 69% of such imports in 2014, though these imports have fallen sharply in the past three years. These and other more advanced manufactured products, such as chemicals, come almost exclusively from South Africa. Figure 2 highlights the top exporters of non-energy products to the United States under both programs. Among the other countries that have made significant use of the preferences, apparel exports account for most of their AGOA exports. Reauthorization Debate

AGOA's authorization is set to expire on September 30, 2015. In light of economic improvements in the region, some observers are calling for a greater focus on two-way trade in AGOA. The European Union (EU), however, successfully concluded an Economic Partnership Agreement (EPA) with South Africa and other countries in the region, providing reciprocal preferential tariff treatment to EU exports, though these agreements exclude a range of products. A handful of AGOA countries, particularly Kenya, Lesotho, and Mauritius, provide the bulk of apparel exports under AGOA. Congress may wish to consider how AGOA-directed TCB funding could support this implementation process. While a majority of products are covered under AGOA, some of the excluded products are competitively produced in AGOA countries, particularly agricultural products. Proposed Renewal Legislation

Bills to renew the AGOA preference program ( H.R. Key issues addressed in the bills include (1) a ten year renewal of the overall program including the regional apparel article program and the third-country fabric provision; (2) modifications to the rules of origin allowing for the "direct costs of processing operations" to count toward a product's required regional value content to qualify for duty-free treatment; (3) changes to the eligibility review process administered by the President, including a required 60-day notification to Congress before termination of preferential treatment for beneficiary countries, a requirement to seek public comments and hold a public hearing on eligibility reviews as well as establish a public petition process open at all times, authorization of an out-of-cycle review process and a sense of Congress that the President should initiate such a review of South Africa within 30 days of enactment, and the ability to withdrawal, suspend, or limit preferential treatment rather than full termination; (4) sense of Congress that beneficiary countries should develop utilization strategies together with U.S. trade capacity building agencies; (5) policy statement to expand trade and investment by negotiating trade and investment framework agreements (TIFAs), bilateral investment treaties (BITs), FTAs with beneficiary countries and through accession to the World Trade Organization (WTO) agreements for beneficiary countries; (6) a biennial report on U.S. trade and investment relations with the region, eligibility status, regional integration efforts, and trade capacity building efforts; and (7) a report one year after enactment and five years thereafter that discusses the status of negotiating FTA's with sub-Saharan African countries. H.R. 1891 was reported by the House Committee on Ways and Means without amendment. The Senate Finance Committee considered a related measure, S. 1267 , which includes modifications to the U.S. harmonized tariff schedule, in addition to the preference renewal language in S. 1009 . On May 14, the Senate passed the provisions of S. 1267 , by including them as an amendment in the nature of a substitute to H.R. 1295 . On June 11, the House passed with further amendment, the Senate amended version of H.R. 1295 . Sub-Saharan African Countries
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. Its current authorization expires on September 30, 2015.
Bills to renew the preference program (H.R. 1891/S. 1009) were introduced in the House and Senate in April. H.R. 1891 was reported by the House Committee on Ways and Means without amendment. The Senate Finance Committee reported a related measure, S. 1267, with two amendments. On May 14, the Senate passed the provisions of S. 1267, by including them as an amendment in the nature of a substitute to H.R. 1295. On June 11, the House passed a further amended version of H.R. 1295. The two chambers must resolve the differences in H.R. 1295 before the AGOA renewal legislation can be sent to the President and become law.
In terms of tariff benefits and general eligibility criteria, AGOA is similar to the Generalized System of Preferences (GSP), a U.S. trade preference program that applies to more than 120 developing countries. AGOA, however, covers more products and includes additional eligibility criteria beyond those in GSP. Additionally, AGOA includes trade and development provisions beyond its duty-free preferences.
U.S. imports from AGOA beneficiary countries (AGOA countries) represent a small share (1%) 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% of such imports in 2014. Despite remaining the top U.S. import under AGOA, U.S. oil imports from the region have fallen by 80% or nearly $40 billion since 2011. Among non-energy products, apparel is the top export for a number of AGOA countries. U.S. apparel imports typically face relatively high tariffs and are excluded from duty-free treatment in GSP, but are included in the AGOA preferences, giving AGOA countries a competitive advantage over other apparel producers. A handful of countries, primarily Lesotho, Kenya, and Mauritius, make significant use of the apparel benefits. Apart from apparel and energy products, South Africa accounts for the bulk of U.S. imports under AGOA. As the most economically advanced country in the region, South Africa also exports a much more diverse range of manufactured goods than other AGOA countries; vehicles in particular have become a major South African export under AGOA.
Most observers agree that AGOA has successfully led to increased and more diversified exports to the United States from sub-Saharan African countries. Despite this, Congress may wish to address a number of issues and challenges as it considers possible reauthorization of AGOA. Among these challenges is how current and potential AGOA beneficiaries can better utilize the AGOA program and its duty-free benefits. Studies suggest that even among some countries that do make significant use of the AGOA preferences, the lower-skill apparel production which AGOA has spurred has not led to the production of higher-skill manufactured products. Other issues relate to the nonreciprocal nature of the AGOA preferences. Some argue that the United States should focus more on two-way trade agreements with the region, particularly with more advanced countries such as South Africa, given improving economic conditions in Africa in recent years. The European Union (EU), for example, has negotiated Economic Partnership Agreements (EPAs) with several African countries that provide some reciprocal tariff benefits, potentially placing U.S. firms at a competitive disadvantage relative to European firms in some markets.