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The African Growth and Opportunity Act (AGOA), enacted in 2000 to provide duty-free treatment to US imports from sub-Saharan African countries, is not a free trade agreement (FTA). Set to expire in 2025, Congress’s upcoming AGOA reauthorization debate could be a moment for legislative approval to either elevate its status to an FTA or craft multilateral or bilateral critical minerals–specific agreements and help mineral-rich African economies become an important part of US clean energy supply chains.
As the Carnegie Endowment for International Peace has thoughtfully argued, reauthorizing AGOA as an FTA would enable African economies to benefit from the US Inflation Reduction Act’s tax credits, for which membership in such an agreement is a prerequisite. African-produced minerals could strengthen broader US efforts to reduce risks in supply chains for critical minerals and downstream products like semiconductors and electric vehicles. An FTA with sub-Saharan African countries would also provide the United States with more latitude than it has now by expanding the list of IRA-compliant trading partners.
As welcome as such steps might be, a sub-Saharan FTA may not be practical. A major potential obstacle to such progress is that it might invite the wrath of a Congress concerned about Chinese involvement in the African minerals sector, and some mineral-rich African countries are currently suspended from AGOA because of human rights abuses and coups. But a debate in Congress over renewing AGOA could pave the way for progress on the urgent need for more supplies of critical minerals.
AGOA is not a free trade agreement
In principle, an FTA is a give-and-take arrangement: Each party reduces trade barriers in order to boost trade among them. AGOA is more akin to unilateral disarmament: The US reduced trade barriers on more than 5,000 products from designated African states while not requiring these economies to reciprocate by reducing their barriers to US goods. Many FTAs, especially those between Global North and South countries, are not perfectly reciprocal. Global North countries often give more than they receive in market access. But in not requiring African economies to liberalize market access for US goods at all, AGOA does not meet the textbook definition of an FTA. The United States’ own list of US FTAs does not include any AGOA-eligible countries.[1]
To some, this non-give-and-take aspect of AGOA is a feature, not a bug: It provides growth-enhancing benefits to the world’s most impoverished region while allowing African governments to protect their own infant industries and sectors. On the other hand, the empirical record suggests that special and differential treatment for developing economies—specifically not requiring reciprocity—has not been especially helpful in spurring growth.
But for the limited purposes of building out critical mineral supply chains and unlocking the IRA’s tax credits, AGOA’s non-FTA status is a hindrance. Domestic sourcing provisions in the IRA require that materials be sourced from countries with which the United States has an FTA.
The IRA establishes a four-prong test for what constitutes an FTA for purposes of the tax credits: whether an agreement between the United States and another country 1) reduces or eliminates trade barriers on a preferential basis, 2) commits the parties to refraining from imposing new trade barriers, 3) establishes high-standard disciplines in areas affecting trade like core labor and environmental standards, and 4) reduces or eliminates restrictions on exports.
Fundamentally, AGOA is not an agreement between the United States and another country: It’s a unilaterally established preferential market access program for eligible African countries. It does not commit these African economies (or the US) to refrain from new trade barriers. It arguably establishes high-standard disciplines on labor practices—countries can be suspended from eligibility on a variety of human rights and governance-related grounds—but it does not reduce or eliminate restrictions on exports, a key challenge given the more resource-nationalist turn some sub-Saharan African economies have taken (more on that below).
There are three potential paths forward
First, the United States Trade Representative (USTR) could attempt to simply reclassify AGOA as an FTA. While theoretically possible, this path is a nonstarter: AGOA clearly doesn’t meet the definition established in the IRA.
Second, the USTR could use AGOA as a starting point for negotiating either multilateral, critical minerals-specific agreement, which is what the Carnegie Endowment report suggests, or a series of bilateral agreements with specific AGOA-eligible mineral-rich economies. Neither of these paths flows directly through Congress.
Finally, Congress could reauthorize AGOA with specific language designating it a free trade agreement for critical mineral-related purposes. In any of these scenarios, critical mineral exports from dozens of African economies would become eligible for US domestic treatment and the attendant tax credits. This is a seemingly straightforward solution to the mismatch between US economic statecraft and geological reality: Current US FTA partners simply do not provide all the materials needed for EV batteries, and African minerals could help close the gap.
But reframing AGOA as an FTA—and a regionwide one, at that—would immediately add nearly three dozen economies to the list of US free trade partners, sidestepping the legislatures’ traditional role in negotiating and crafting these deals and representing the interests of labor organizations and human rights advocates, among others. Doing so would stretch the concept of an FTA awfully thin, as AGOA is not even a multilateral agreement. Congress would reasonably object on procedural and substantive grounds, and court challenges would likely occur.
Objections to turning AGOA into a free trade agreement
Some of the strongest substantive objections would relate to Chinese firms’ involvement in Africa’s mining and mineral processing sector, which is extensive. Starting in 2024, the IRA explicitly excludes battery components produced by any foreign entity that is “owned by, controlled by, or subject to the jurisdiction or direction of” the government of a covered nation, a list that includes China, Russia, North Korea, and Iran. In 2025, the ban will extend to critical minerals.
In March 2023, Senator Marco Rubio (R-FL) introduced a bill that would establish guardrails for US tax credits that would prevent their accruing to Chinese firms—and firms partnering with Chinese firms—including those firms operating outside of China. This comes in advance of long-anticipated guidance from the US Treasury regarding the specific interpretation of the “foreign entity of concern” clause for the purposes of the IRA. Concerns about this clause in the IRA—and broader anti-Chinese sentiment—are already exerting a chilling effect on US-Chinese EV partnerships based in the United States.
Even if the USTR or an act of Congress were to reclassify AGOA as an FTA, many mineral-rich African countries would not be able to participate for governance-related reasons. The US-led Mineral Security Partnership has among its objectives supporting projects and producers that meet “high, internationally recognized ESG [environmental, social, and governance] standards.” Setting aside the critical mineral issue, AGOA preferences have been suspended many times in response to coups, human rights abuses, and credible allegations of forced labor. Pariah regimes (at least from the US perspective) in Sudan and lithium-rich Zimbabwe have never been eligible. Guinea, the world’s largest exporter of bauxite, was suspended from AGOA following its coup d’état in 2022. Gabon and its manganese reserves may be facing a similar situation following the ouster of President Ali Bongo Ondimba in August. Simply reclassifying AGOA as an FTA would presumably not change this landscape. If, however, redesignation were to come with reassessment of these suspensions, it wouldn’t be the first time US strategic priorities overrode human rights and governance concerns in the pursuit of energy security.
Still another sticking point could be concerns over export bans on unprocessed materials of some sub-Saharan countries. Ghana and Namibia have both banned exports of unrefined minerals as part of a push to force miners and processers to invest in developing local refining capacity. These export bans—like those enacted by Indonesia covering bauxite and nickel—would seem to run afoul of the second and fourth criteria for IRA eligibility or Article XI of the General Agreement on Tariffs and Trade (GATT). Sub-Saharan African economies would likely have to disavow the use of export bans and replace them with export taxes and/or licensing programs.
At present, AGOA is not a vehicle for African economies to benefit from the US renewable energy transition via integration into IRA-supported supply chains. But the spirit and intent of AGOA—to raise living standards and promote stronger US-African relations—could be a basis for negotiated multilateral or bilateral agreements that would be fit for purpose. Doing so could also act a catalyst for downstream development in the mineral processing sector—an area where many African states have vast ambitions but are currently dependent on China. To be sure, doing so would dilute the concept of an FTA and potentially invite scrutiny of governance and other concerns over many African countries. But at the least, a congressional debate over the tradeoffs involved in securing supplies of critical minerals would be a healthy step forward.
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Data Disclosure
This publication does not include a replication package.
