In addition, the act requires that an SSA country be eligible for the  Generalized System of Preferences (GSP) in order to be considered for  AGOA benefits. The U.S. Government Uses the Eligibility Review Process and the AGOA Forum to Engage with SSA Countries and Encourage Reforms

The U.S. government uses the annual eligibility review process and forum  mandated by AGOA to engage with sub-Saharan African countries on  their progress toward economic, political, and development reform  objectives reflected in AGOA’s eligibility criteria. Over the lifetime of AGOA, 13 countries have lost their AGOA eligibility,  although 7 countries eventually had their eligibility restored. The following example illustrates how the U.S. government uses the  eligibility review process to engage with SSA countries on issues related  to specific reform objectives:
Swaziland was deemed eligible for AGOA in January 2001. U.S. government officials met several times with  Swaziland officials to discuss steps to improve labor rights, including a  USTR-led interagency trip in April 2014. Its purpose is to foster close  economic ties between the United States and SSA countries; however,  the forum also supports AGOA reform objectives by holding sessions that  specifically address AGOA eligibility criteria. AGOA-Eligible Countries Have Fared Better than Ineligible Countries on Some Economic Development Indicators, but AGOA’s Impact on Economic Development Is Difficult to Isolate

AGOA-eligible countries have fared better than ineligible countries on  some economic development indicators since AGOA was enacted,  according to our analysis of economic data for SSA countries that were  eligible and ineligible for AGOA in 2012; however, AGOA’s impact on  economic development is difficult to isolate when additional factors are  taken into consideration. Other factors—such as the small share of AGOA  exports in the overall exports of many AGOA-eligible countries, the role of  petroleum exports in recent income growth, the quality of government  institutions, and different levels of foreign aid and investment—make it  difficult to isolate how much economic development can be attributed to  AGOA. For example, AGOA exports are a small share of overall exports  for the majority of AGOA-eligible countries, a fact that could limit AGOA’s  impact on economic development in these countries. We found evidence  that increasing energy prices may also have contributed to income growth  within AGOA-eligible countries: from 2000 through 2012, the top three  AGOA-eligible petroleum-exporting countries had a much higher growth  rate for income per person than other AGOA-eligible countries. We also  found that AGOA-eligible countries on average had higher governance  scores and received more foreign aid and investment compared with  ineligible countries. While these differences may have been facilitated by  AGOA eligibility, they may also have contributed to economic  development in AGOA-eligible countries, a possibility that makes it  difficult to isolate AGOA’s impact on economic development. Agency Comments

We are not making any recommendations in this report. Appendix I: Objectives, Scope, and Methodology

Our objectives were to examine (1) how the African Growth and  Opportunity Act (AGOA) eligibility review process has considered and the  AGOA Forums have supported economic, political, and development  reform objectives described in the act and (2) how sub-Saharan African  (SSA) countries have fared in certain economic development outcomes  since the enactment of AGOA. To address both objectives, we interviewed officials from the Departments  of Agriculture, Commerce, Labor, State, and the Treasury; the U.S.  Agency for International Development; and the Office of the U.S. Trade  Representative (USTR), all of which are the members of the Trade Policy  Staff Committee’s AGOA Implementation Subcommittee that generally  prepare the sub-Saharan Africa country reports for the annual eligibility  review. Sub-Saharan Africa: Trends in U.S. and Chinese Economic Engagement.
Why GAO Did This Study

Enacted in 2000 and set to expire in September 2015, AGOA is a trade preference program that seeks to promote economic development in 49 sub-Saharan African countries by allowing eligible countries to export qualifying goods to the United States without import duties. The act requires the U.S. government to conduct an annual eligibility review to assess each country's progress on economic, political, and development reform objectives in order to be eligible for AGOA benefits. AGOA also requires an annual forum to foster closer economic ties between the United States and sub-Saharan African countries.
GAO was asked to review various issues related to AGOA's economic development benefits. In this report, GAO examines (1) how the AGOA eligibility review process has considered economic, political, and development reform objectives described in the act and (2) how sub-Saharan African countries have fared in certain economic development outcomes since the enactment of AGOA.
GAO reviewed documents and interviewed officials from U.S. agencies to examine the relationship between the U.S. government's review process and AGOA reform criteria. GAO analyzed trends in economic development indicators for AGOA eligible and ineligible countries from 2001 to 2012, the latest year for which data were available for most countries.

What GAO Found

The U.S. government uses the annual eligibility review process required by the African Growth and Opportunity Act (AGOA) to engage with sub-Saharan African countries on their progress toward economic, political, and development reform objectives reflected in AGOA's eligibility criteria. Managed by the Office of the United States Trade Representative, the review process brings together officials from U.S. agencies each year to discuss the progress each country is making with regard to AGOA's eligibility criteria and to reach consensus as to which countries should be deemed eligible to receive AGOA benefits. Over the lifetime of AGOA, 13 countries have lost AGOA eligibility, although 7 eventually had it restored (see figure). To encourage reforms, the U.S. government will engage with countries experiencing difficulty meeting eligibility criteria and may specify measures a country can take. For example, U.S. officials met with Swaziland officials over several years to discuss steps to improve labor rights. However, Swaziland did not make the necessary reforms and lost eligibility effective in January 2015.
GAO analyzed data on economic development indicators for sub-Saharan African countries that were eligible and ineligible for AGOA in 2012; the results showed that eligible countries fared better than ineligible countries on some economic measures since the enactment of AGOA. The extent to which this outcome is attributable to AGOA, however, is difficult to isolate after additional factors are taken into consideration. Other factors, such as the small share of AGOA exports in the overall exports of many AGOA-eligible countries, the role of petroleum exports in recent income growth, the quality of government institutions, and differences in levels of foreign aid and investment, make it difficult to isolate AGOA's contribution to overall economic development. For example, AGOA exports are a small share of overall exports for the majority of AGOA-eligible countries. GAO found evidence that increasing energy prices may also have contributed to income growth within AGOA-eligible petroleum-exporting countries. GAO also found that AGOA-eligible countries on average had higher governance scores and received more foreign aid and investment compared with ineligible countries. These differences may have contributed to economic development in AGOA-eligible countries, but they may also have been facilitated by AGOA, a possibility that makes it difficult to isolate AGOA's impact on economic development.

What GAO Recommends

GAO is not making any recommendations.