(Graphic: John McCann)
The expiration of the African Growth and Opportunity Act (Agoa) should not be seen as a setback for African nations but rather as an opportunity to strengthen local industries, upskill workforces and expand regional trade, experts have said.
Agoa is a United States law that provides eligible sub-Saharan African countries with duty-free access to that market for more than 1 800 products.
The Act expired in September, and there remains uncertainty over its renewal. But amid the punitive tariffs imposed by President Donald Trump, countries are considering measures to safeguard their trade markets.
African markets can leverage their skills to develop their markets and also strengthen intra-African trade through the African Continental Free Trade Area (AfCFTA), said Rose Ngugi, a fellow in the African Economic Research Consortium.
“We have actually built skills in the textile market that were probably not there, and we need to secure them,” Ngugi said.
“I see the skills, for example, helping us to develop our textile market, and it may be high time we discuss the second-hand market for textiles, as there may be an opportunity to get on with building our textile market.”
The second opportunity lies in the AfCFTA, Ngugi said during a recent panel discussion at last week’s Think20 (T20) summit, one of the official engagement groups of the G20, which this year falls under South Africa’s presidency.
“It is probably the right time to start talking about ‘buy in Africa, build in Africa’ for all the goods that were targeted for a poor market. Very little was coming into the continent or being flown across the countries. We can continue producing the same, but I think that we can now explore the market at the continental level,” she added.
“AfCFTA is all about zero tariffs, and one of the things that the African Union and the architect of AfCFTA may want to look at is how to take advantage of this effort that we have done so far, build the capabilities and keep them high for Africa again.”
With Trump’s tariffs having rocked the economies of many countries, panellists discussed the way forward for a new world trade order and the role of the World Trade Organisation, saying multilateralism is the ideal way for countries to support each other.
“We need multilateral rules, especially for developing countries, and voluntary compliance commitments,” said Sait Akman, director of the G20 Studies Centre at the Economic Policy Research Foundation of Turkiye.
“I think we need to talk about still putting the World Trade Organisation at the centre of the trade regime, although it is not very easy. But the World Trade Organisation…has been increasingly short of performing many of its functions, like multilateral rulemaking as a forum for trade negotiations and dispute settlement, which was one of the best achievements before.”
Akman warned that the global trade system is shifting away from a rules-based, growth-oriented multilateral order toward a more fragmented, security-driven and transactional system dominated by bilateral deals.
“What is the main challenge for me is that the governance of the global system is evolving into a kind of physical, fragmented system, which I call a hybrid system. We have deviations. Not only are we having problems with the function, but also its core norms are not challenged. So we face a set of new global trade norms,” he said.
“The trade regime is a set of principles, norms and rules around which actors’ expectations converge. Now we have divergences. We have serious attacks on foreign laws, particularly on multilateralism, non-discrimination, liberalisation, and development.”
Divergence refers to major countries and trading blocs moving away from shared rules, shared expectations, and common principles in the global trade system.
The unprecedented Trump-imposed tariffs have not had as significant an effect as expected in the near term, but there is a need to absorb their impact in the coming year, said the vice president for research at the Italian Institute for International Political Studies, Antonio Villafranca.
“International trade in 2025 is doing incredibly well. International trade will grow by 2.4%, while the forecast made in Africa when Trump announced the tariffs itself was -0.4. In just a few months, we moved from -0.4 to 2.4% which is quite good, but this is only an apparent effect of all these cloud studies. There are many expeditious ways going on.”
“At the moment, what it is important to do immediately is to gauge what the effect of Trump’s tariffs in terms of a divergence, trade divergence, otherwise multilateralism and all the things that we’re talking about will simply not happen, because uncertainty will prevail.”