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The initial and potential impact of preferential access to the U.S. market under the African Growth and Opportunity Act

Author

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  • Brenton, Paul
  • Ikezuki, Takako

Abstract

The ability to export clothing products under preferences with liberal rules of origin is the key factor currently determining whether the African Growth and Opportunity Act (AGOA) has a significant impact on non-oil exporting African countries. At present only a small number of countries receive substantial benefits and least developed countries that do not receive preferences for clothing have yet to see an impact of AGOA on their overall exports. However, the benefits from exporting clothing under AGOA appear fragile in the face of the removal of quotas in the United States on major suppliers, such as China, at the end of 2004, and the planned removal of the liberal rules of origin that allow for the global sourcing of fabrics from least-cost locations. To entrench and enhance the benefits of AGOA, it is important that the scheme be extended over a much longer period, if not made permanent, and the special liberal rules of origin for clothing products be extended considerably beyond 2004. The effective inclusion of textile products and a number of high-duty agricultural products would also help to broaden the range of opportunities for African exporters in the U.S. market. Nevertheless it is important that the opportunities created by AGOA are integrated into a broader framework for promoting trade and that it be recognized that if the opportunities offered by more open trade are to be exploited, there must be concerted efforts to improve the environment for investment countries covered by AGOA.

Suggested Citation

  • Brenton, Paul & Ikezuki, Takako, 2004. "The initial and potential impact of preferential access to the U.S. market under the African Growth and Opportunity Act," Policy Research Working Paper Series 3262, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3262
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    References listed on IDEAS

    as
    1. Elena Ianchovichina & Aaditya Mattoo & Marcelo Olarreaga, 2001. "Unrestricted Market Access for Sub‐Saharan Africa: How Much Is It Worth and Who Pays?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 10(4), pages 410-432.
    2. Daniel Lederman & Çaglar Özden, 2004. "U.S. Trade Preferences: All are not Created Equal," Working Papers Central Bank of Chile 280, Central Bank of Chile.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mary Amiti & John Romalis, 2007. "Will the Doha Round Lead to Preference Erosion?," IMF Staff Papers, Palgrave Macmillan, vol. 54(2), pages 338-384, June.
    2. Lawrence Edwards & Robert Z. Lawrence, 2014. "AGOA Rules: The Intended and Unintended Consequences of Special Fabric Provisions," NBER Chapters,in: African Successes, Volume III: Modernization and Development, pages 343-393 National Bureau of Economic Research, Inc.
    3. Cooke, Edgar F A, 2011. "The impact of trade preferences on exports of developing countries: the case of the AGOA and CBI preferences of the USA," MPRA Paper 31439, University Library of Munich, Germany.
    4. Garth Frazer & Johannes Van Biesebroeck, 2010. "Trade Growth under the African Growth and Opportunity Act," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 128-144, February.
    5. Denis Medvedev, 2010. "Preferential trade agreements and their role in world trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(2), pages 199-222, June.
    6. Cooke, Edgar F. A., 2012. "Is the impact of AGOA heterogeneous?," MPRA Paper 43277, University Library of Munich, Germany.
    7. Walkenhorst, Peter & Cattaneo, Olivier, 2006. "Trade, Diversification and Growth in Nigeria," MPRA Paper 23735, University Library of Munich, Germany.
    8. World Bank, 2007. "Nigeria - Competitiveness and Growth : Country Economic Memorandum, Volume 2. Main Report," World Bank Other Operational Studies 7824, The World Bank.

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