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GTAP Resource #4355

"The African Growth and Opportunity Act: An Empirical Analysis of the Possibilities Post-2015"
by Mevel, Simon, Zenia Lewis, Mwangi Kimenyi, Stephen Karingi and Anne Kamau

The African Growth and Opportunity Act (AGOA), largely defining the trade and commercial relationship between the United States and Africa, will expire on September 30, 2015. Although there have been propositions as to what may happen under different scenarios, these are not supported by hard empirical evidence and thus are not very useful in informing the design of the post-2015 relationship.

This study provides an analysis of outcomes of U.S.-Africa trade under five categories of post-2015
scenarios. These scenarios look at the trade and income implications of i) not extending AGOA beyond 2015; ii) expanding product eligibility for AGOA; iii) revising currently eligible countries; iv) restructuring AGOA to resemble the economic partnership agreements (EPAs) of the European Union; and v) effects from a possible EU-U.S. free trade agreement could have on AGOA or an EPA-like situation, with an additional scenario examining how a continental free trade area would play into such an integrated trade environment.

The results indicate that discontinuing AGOA would generate very unequally distributed trade losses across the continent. The findings also show that expanding product eligibility for AGOA, would only have small effects on AGOA-eligible countries exports—unless complete duty-free and quota-free market access was granted because the most import- sensitive sectors for the U.S. are still where Africa would gain the most. In addition, the analysis shows that excluding middle-income countries that are currently eligible for AGOA or adding other non-African least-developed countries not currently AGOA-eligible would result in considerable trade losses and increased competition for Africa. Last, the results show that EPA-like agreements could result in large losses in tariff revenue for African countries, but also demonstrate the importance of regional integration to offset such losses.

Resource Details (Export Citation) GTAP Keywords
Category: 2014 Conference Paper
Status: Published
By/In: Presented at the 17th Annual Conference on Global Economic Analysis, Dakar, Senegal; United Nations Economic Commission for Africa and Brookings Institution
Date: 2013
Created: Mevel, S. (4/5/2014)
Updated: Mevel, S. (4/5/2014)
Visits: 1,245
- Dynamic modeling
- Preferential trading arrangements
- Africa (Central)
- Africa (East)
- Africa (Southern)
- Africa (West)

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