Wednesday, December 1, 2021

Why US suspends Ethiopia, Mali, Guinea from free trade deal

In response to human rights violations, the US suspended Ethiopia, Mali and Guinea from the African Development and Opportunity Act (AGOA) on Tuesday, ending each country’s duty-free access to the US market.

In a statement to Congress, US President Joe Biden said these nations were no longer in compliance with the eligibility requirements for the AGOA, and cited various examples of their failure to protect internationally recognized human rights.

What is AGOA?

The AGOA was enacted by Congress in May 2000 with the intention of increasing sub-Saharan African countries’ access to the US market.

A number of key benefits are provided to qualifying nations under the Act, most notably preferential access to the US market for more than 6,000 products. Through the removal of import duties on these products, beneficiaries gain a competitive advantage over other countries.

To qualify for AGOA, nations must meet the eligibility requirements set forth in Section 104 of the Act, which include working toward improving their rule of law, protecting human rights, and respecting international labor standards.

Each year, the US determines which nations qualify for AGOA benefits, and the president grants or withdraws beneficiary status at his discretion.

Why did the administration cut off access to Ethiopia, Mali and Guinea?

The Biden administration said unconstitutional developments in Mali and Guinea threatened his eligibility for the programme.

According to the president’s statement, Mali “has not made sustained progress toward establishing the rule of law, political pluralism and the protection of internationally recognized worker rights.” It also has not addressed “gross violations” of “internationally recognized human rights”, Biden said.

In Guinea, the government has failed to establish protections for the rule of law and political pluralism, the statement said.

The president said the Biden administration withheld Ethiopia’s benefits under the AGOA for “gross violations of internationally recognized human rights”.

Ethiopia’s suspension was a result of the ongoing civil war in the northern Tigre region that has led to a serious human rights crisis. Since the conflict began a year ago, there has been increased international concern over human rights abuses, including mass killings of civilians and widespread sexual violence.

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How are these countries reacting?

Following President Biden’s announcement, Ethiopian government spokesman Legacy Tulu said the government had already commented on the issue, Reuters reported.

Legacy said on Twitter on October 3 that the suspension from AGOA would result in the loss of one million jobs for the country.

The governments of Mali and Guinea have not issued a statement on President Biden’s decision.

How important is the deal to each country’s economy?

Given the benefits generated by the AGOA, suspension from the Act could have significant implications for each country’s economy.

According to the World Bank, Mali is one of the poorest countries in the world, with a low-income, highly diversified economy.

In 2020, amid the pandemic, the country hit a recession.

According to the World Bank, Guinea is one of the poorest countries in the world. The pandemic significantly slowed economic growth in the country, causing it to shrink by 1.4% in 2020.

According to data from the United States International Trade Commission, Mali and Guinea were not the major exporting countries under the AGOA, but Ethiopia was the fifth top exporting country under the Act.

Bloomberg reported that the nation exported $245 million worth of goods to the US under AGOA, accounting for half of its exports to the US.

While Ethiopia is one of the poorest countries in Africa, with a per capita income of $850, it has the fastest growing economy in the region, according to the World Bank.

Mali, Guinea and Ethiopia will no longer be designated as AGOA beneficiaries with effect from January 1, 2022.

These countries will be denied access to AGOA benefits until action is taken to regain eligibility status.

In a statement on Tuesday, Ambassador Catherine Tai, the top US trade negotiator, said the US “urges these governments to take the necessary action to meet statutory criteria so that we can resume our valuable business partnership.”

Tai also said that it would provide each country with a benchmark for a path towards the restoration of their AGOA benefits.

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This article is republished from – Voa News – Read the – original article.

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