Agoa Trade Deal's future future

Thursday was a “horrible” and “devastating” day for people involved in the Lesoto textile sector, as they absorb the news that the country's exports to the United States will be affected by a 50% tax on import or tariff.

Teboho Kobeli, who founded textiles of Afri-Expo and hired 2000 people in the country, could hardly conceal his suffering while he told the BBC about the impact of the potential loss of a huge part of the US market because the prices of his goods would have to increase.

The small southern African nation has become a child for posters for African Growth and Possibilities (AGOA) -25-year-old piece of US law guaranteeing duty-free access to US consumers for certain goods from Africa.

Considered to be a cornerstone of the US and Africa economic relations, the aim was to help the continent's industrialization, to create employment and to raise dozens of poverty countries.

It was based on a philosophy to replace trade with trade.

The overall impact of ACT is controversial, but is credited to create hundreds of thousands of jobs, especially in the textile sector.

Although President Donald Trump did not mention it by name, Agoa status is already uncertain.

Like so much that she left the White House in the first few weeks of his presidency, the message on Wednesday has sowed confusion – especially in the case in Africa.

On the one hand, there is AGOA, with its arrangement without tariffs, and on the other, there is Trump outlining the rates ranging from 10% (including Kenya, Ethiopia and Ghana) to 31% (South Africa) and 50% (Lesoto).

What has the advantage?

South Africa, which exports metals and cars to the United States, believes that this is the end of AGOA.

“Reciprocal tariffs effectively invalidate the preferences that Africa's Africa countries in Africa enjoy,” a joint statement said in a joint statement in a joint statement.

But Kenya's Secretary of Foreign Affairs Corrir Singh 'Oyy had a different view.

“It is our reason that until the law expires at the end of September 2025, or unless it has been canceled earlier by Congress, the new tariffs imposed by President Trump are in any case still not immediately applicable,” the statement said.

Kenya, who exports clothes to the United States, tried to put a bold face on the matter, saying that since he was not hit as much as other textile exporters, such as Vietnam and Sri Lanka, he will still have a competitive advantage.

Whatever happened to AGOA in the immediate term, it seems that Trump's lining tariffs have considered the hopes of renewing the legislation.

The law of the Clinton era, which in the current climate begins to feel like a relic for the past, was ready to renew later this year.

Since 2000, some African countries have duty -free access to the US market for a number of goods, including clothing and textiles, cocoa products and wine, as well as crude oil.

Access was bound by a number of conditions, including free market policies, labor and human rights and political pluralism. Thirty -two Subsahara Africa countries have been eligible since last year.

In 2023, two -way trade under Agoa amounted to $ 47.5 billion ($ 36.4 billion), with US exporting $ 18.2 billion worth $ 29.3 billion.

By virtue of being among the largest economies of the continent, South Africa and Nigeria, they have dominated the law of law, but the Leso has taken advantage of considerable exporters of clothing for the United States, delivering brands such as Walmart, Gap and Old Navy.

But a future without Agoa – for Lesoto and others – represents great challenges.

If nothing changes, “a 50% tariff sounds like the death of AGOA production in Lesoto,” says Muhis Kitui, a former Secretary General of the UN Conference on Trade and Development and former Kenyan Trade.

In 2018, the World Bank model a scenario in which Lesoto experienced the sudden loss of AGOA's privileges and found that the impact would “reach 1% of GDP” within two years. The report came to the conclusion that the impact on well -being would be “dramatic”.

But as a witness to the redundancies of assistance, arguing about human impact or justice will not fly in the present setting, before the “destructive populism and post-factic, after the property,” says Dr. Kituyi.

He believes that countries, such as Kenya, who have the new rates set at 10%, could still try to keep on the US market, with exporters and their US importers negotiating how to take on new taxes without raising the consumer prices too much.

As Dr. Kituyi is involved in trade negotiations, including AGOA, he saw first-hand the efforts that come into “fine tuning of these processes” to create a “shared benefit of a stable, predictable rules-based trade”.

But now, he believes that such agreements are “hostage to the desires of the dominant political group in America.”

Michel Gavin, a senior political research associate in Africa at the Washington Foreign Relations Council, said the way in which the new tariffs were calculated, “makes no sense at all for economists.

It is difficult to see “any kind of clear strategy or intention” by Trump's administration so far, she tells the BBC.

But decisions will only exacerbate the loss of American influence in Africa, she warns. China, already the largest trading partner on the continent, can take advantage of the further.

“It looks like a withdrawal, ignoring an entire vast region of the world,” says Gaj Gavin.

Coming shortly after the Trump administration seriously canceled the US International Development Agency, leading to the cancellation of both humanitarian and life -saving health care, the analyst says that America seems to “destroy its own instruments for influence with abandonment”.

Agoa has long been seen as an important tool for the soft power of the United States, especially in countering China and Russia in Africa.

In the past, there was bilateral support for this among American legislators, and D -Kituy sees this as a “flashes of hope.”

A bill seeking Agoa renewal by 2041 was released by Democrat senator Chris Coons more than a year ago, but may not make any progress in the current congress.

G -Gavin does not believe that Agoa is now a priority, given that drastic and unpredictable changes in Trump's political changes have been created.

“I believe that non-reciprocal trade agreement is a very difficult sale for this congress, which has been dominated by the Republican Party, which has so far adapted to the administration program.”

She believes that although she “makes good sense as a matter of politics”, it is unlikely to be the front and center of legislative programs “as a matter of politics”, even if the congress begins to stand up more.

As Trump's tariffs throw the world into turmoil, the continent's specific needs are unlikely to be the most burned for others in the world.

If AGOA becomes non -existent, Africa will have to look at itself and fulfill the promises of creating a continental free trade area. In addition, he will have to work more encouraged to find new trading partners or expand existing markets.