(G.W. Bush and Obama renewing AGOA in 2000 and 2015)
The current US presidential campaign has brought an unusual amount of scrutiny in analyzing trade agreements. In the midst of all of the talk about NAFTA, the TPP, and how jobs are being shipped overseas, I wanted to introduce a less well-known but hugely important bit of legislation called the African Growth and Opportunity Act (AGOA), which is a US trade agreement with many countries in sub-Saharan Africa, and a key facet in the creation and continued growth of Seeded Hand Sown.
If you live in the US, you may not have ever heard of AGOA, unless you are particularly interested in global economics or international trade--but I'll tell you who has: just about everyone who consumes news media in East Africa. AGOA is a gorgeous bit of legislation signed into law by Bill Clinton in 2000 (and renewed by G.W. Bush and Obama) that grants tariff-free entry of many products produced in participating Sub-Saharan African nations. To be designated as AGOA-eligible, a country has to show progress in establishing:
- a market-based economy
- the rule of law, political pluralism, and the right to due process, a fair trial, and equal protection under the law;
- the elimination of barriers to United States trade and investment
- economic policies to reduce poverty, improve healthcare and education, expand physical infrastructure, and promote robust private enterprise
- efforts in battling bribery and corruption
- protection of worker rights, including the right of association, no forced labor, no child labor, a fair minimum wage, and safe working conditions.
...And also, the country can't engage in any practices that undercut US security or promote terrorist activity. Efforts in all of these fields are continually audited, and a nation can lose or gain AGOA eligibility depending on their compliance. The number of AGOA-eligible countries fluctuates, but approximately 40 sub-Saharan nations are participating.
There is a lot to gain by being AGOA-eligible. Easy access to the multi-billion dollar US market is a crucial growth opportunity for developing countries that do not necessarily have a lot of domestic spending power. Though the US sacrifices potential tariff income, we are able to use our buying power to promote our economic interests in the region, as well as promoting human rights and economic development.
Continuing to build strong trade relationships in developing nations is crucial to the stability of our political relationships as well. Countries with robust trade relationships don't tend to start wars with each other.
As far as Seeded goes--Tanzania's eligibility in AGOA allows us to bring our shoes into the US market tariff-free, and the savings that we gain are directly reinvested into our workers. AGOA is a core element in our business model, and we hope more companies follow in strengthening the trade between the US and Africa--promoting practices to bring about a more just and peaceful world. The US places tremendous emphasis on quality working conditions idomestically, so we are glad to be on the ground, helping to implement those same practices for equally deserving people in Tanzania.