From Unilateral Trade Preferences to Supply Chain Partnership: Reimagining AGOA

America’s signature trade framework with Africa, the African Growth and Opportunity Act (AGOA), remains stuck in a 25-year-old model built for a different era. With the impending expiration of AGOA on December 31 of this year, we have an opportunity to modernize the framework, build smart foreign assistance programming to drive increased utilization of the program, and bridge the gap between US and African investors, buyers, and suppliers.

The United States cannot build resilient supply chains, compete with China, or expand American manufacturing without a stronger economic partnership with Africa.

Africa offers American companies access to unique materials that are essential inputs to a range of priority US industries, from batteries and medical devices to automobiles. Our trade relationship is highly complementary, not competitive.

China understood long ago that Africa would shape future supply chains. Washington is only beginning to catch up.

Congress created AGOA in 2000 with broad bipartisan support. The program expanded exports and jobs in several countries but never fundamentally reshaped trade flows, unlocked major investments, or positioned America as Africa’s economic partner of choice.

The world has changed dramatically since 2000. AGOA’s next chapter requires transforming it from a unilateral trade preference into a strategic, investment-led partnership aligned to US economic security and Africa’s growth ambitions.

Where AGOA Fell Short

AGOA remains under-resourced and fragmented, lacking a coordinated, whole-of-government approach or alignment with strategic supply chains and national security priorities. At the same time, AGOA is oversold. Trade preferences alone cannot drive industrial transformation. 

Utilization and implementation remain inconsistent. Country AGOA plans were unfunded and disconnected from investment. US engagement declined over time. US government agencies remain siloed, haven’t modernized their tools, and are not organized to compete seriously in Africa. Financing of American small and medium-sized enterprises investing in Africa remains effectively nonexistent.

AGOA was not intentionally reinforced through complementary tariffs on third countries or combined with investment incentives, financing, or regulatory cooperation. 

Finally, uncertainty undermined impact. Short reauthorizations, annual eligibility reviews that removed eligibility after large US investments had been made, and shifting interpretation of criteria discouraged investment.

How We Can Move from Promise to Partnership: A New Model

Current US engagement on critical minerals demonstrates what works: targeted sectors, coordinated agencies, dedicated resources, urgency, and political accountability. 

1. Prioritize strategic sectors.

Focus on industries where:

• Opportunities exceed $1 billion over five years.
• Supply chains for the US and Africa are dominated by China.
• Africa has nascent manufacturing capacity and raw material inputs.
• There is significant potential for job creation in both the US and Africa.
• The US has significant tariffs on other major producers.

Potential priority areas include critical minerals and batteries, solar cells, pharmaceuticals and medical devices, automotive parts, technology, infrastructure, furniture, apparel, and agriculture. Tariffs on third countries for these products may ultimately prove more critical in shifting production than trade preferences, which is why a coordinated trade strategy is required.

The goal is to focus resources where outcomes are large, achievable, and strategically important.

2. Link trade preferences to investment commitments.

AGOA isn’t a free ride. To retain eligibility, African countries must develop plans backed by budgeted resources to invest in upstream capabilities.

For example, raw materials for African apparel are overwhelmingly imported. Third-country fabric provisions should be extended, in consultation with US buyers, on a time-limited basis, with local or US content requirements gradually rising to 75 percent over a 10-year (preferably 15-year) renewal period. If the US wants to decouple from Chinese fabric, it should, for the first time, partner with Africa to provide concessional financing to industry and build the textile facilities needed to do so. 

That would provide the US and African industry with a predictable timeline for companies to invest the hundreds of millions needed for vertical integration while aligning more closely with US free trade agreement rules of origin.

The United States would commit to:

• A clear AGOA implementation strategy that mobilizes financing through the US International Development Finance Corporation, Export-Import Bank of the United States, and US Trade and Development Agency, combined with foreign assistance focused on transaction and project-preparation services.
• Establishing new dedicated financing vehicles. We propose a jointly capitalized $500 million AGOA Fund, modeled on the US-Ukraine Reconstruction Investment Fund, that provides financing of less than $5 million to US businesses entering Africa and African companies purchasing US goods and services. This market is not, and will not be, effectively served by US government financing tools that naturally focus on larger national security-related transactions.

Eligibility should depend on coinvested and adequately resourced plans—not good intentions.

3. Modernize eligibility and incentives.

Predictability is essential. AGOA must move from annual reviews to multiyear eligibility tied to clear economic and policy benchmarks.

Criteria should:

• Focus on market access, investment climate, and sectoral investment and policy progress.
• Introduce reciprocity (requiring middle-income African countries to provide US firms tariff treatment equivalent to that afforded European competitors).
• Reward regulatory cooperation (standards, product registration, and conformity assessment).

AGOA should move beyond geographic eligibility. The goal of US trade preferences is not to encourage Chinese firms to engage in jurisdictional arbitrage by moving to Africa to capture tariff benefits while continuing to control strategic supply chains. Goods produced by Chinese-owned companies should not qualify for AGOA benefits.

4. Elevate engagement and platforms.

AGOA must regain relevance at the highest levels. The US must demonstrate that expanding trade and investment with Africa is a strategic priority.

• Elevate engagement to the level of heads of state.
• Implement the required annual AGOA Forum as a US-anchored investment platform.
• Launch structured programs that bring US institutional investors to the continent.

A Moment to Reset

AGOA should not be treated as a development program on autopilot. Nor should the need to reform it serve as a cynical excuse to allow AGOA to lapse.

AGOA should become a cornerstone of America’s economic strategy with Africa—one that creates American and African jobs, builds trusted supply chains, expands manufacturing, and positions the United States as Africa’s preferred economic partner.

The next generation of global supply chains is being built now. America cannot afford to sit this one out.