Eswatini has retained its AGOA eligibility status and thus continued access for the Kingdom’s most lucrative sugar market by value.
Eswatini is among 36 AGOA eligible countries announced by the Bidden administration following the latest annual review of the Africa Growth Opportunity Act (AGOA) eligible countries published in the AGOA website on Wednesday.
Though the USA imported almost 27,000 tonnes, representing 3% of the Kingdom’s total sugar export, the AGOA market pays top dollar for the country’s principal export. Eswatini joined the AGOA programme on January 18, 2001, becoming the 35th AGOA eligible country – a year after US President Bill Clinton designated 34 Sub-Saharan African countries as eligible for the trade benefits provided under AGOA on 2 October 2000.
Unlike reciprocal and bilateral trade agreements however, the AGOA beneficiary status is unpredictable. Beneficiary countries have no recourse to dispute settlement once the USA administration finds fault with a beneficiary.
While the eligibility requirements are set out in legislation, it is the United States government that annually determines whether countries benefitting from AGOA meets eligibility requirements. Eligibility is granted, or withdrawn, at the discretion of the USA President. In the 2023 AGOA review, Uganda, Niger, Gabon and Central African Republic were dropped from AGOA effective on 1 January 2024.
Eswatini too has experienced the consequences of faltering on AGOA eligibility standards. Under President Barack Obama, the Kingdom was suspended in 2015 to force it to address five eligibility benchmarks. These related to amendments to the Industrial Relations Act compelling the Government to allow for the registration of labour federations in line with International Labour Organisation (ILO) Convention No. 87 on the civil and criminal liability of trade union leaders.
The USA also required an amendment of Sections 40 and 97 of the Industrial Relations Act to decriminalize criminal liability on labour leaders for the actions of people affiliated to their unions.
Two other benchmarks related to amendments to the Public Order Act and Suppression of Terrorism Act. The USA required the Public Order and the Suppression of Terrorism Acts to be narrowed down to focus on ‘terrorist acts’ in line with international practice.
The Eswatini Government had quickly addressed the USA concerns so that the President Donald Trump reinstated AGOA as of December 2017. Access to AGOA also means a key market for Eswatini’s textile factories in Matsapha and other locations across the country.
Only Sub-Saharan African countries are considered for eligibility. AGOA beneficiary status has been awarded to approximately 40 countries – a number that changes from time to time.
Importantly, AGOA also allows Eswatini textile imports under its third country fabric provision. This allows US apparel duty-free imports even if the apparel used yarns and fabrics produced by non-AGOA countries/regions such as China, South Korea, and Taiwan as is the case with most Eswatini textile products.