EAST AFRICA TRADE AND INVESTMENT HUB

INFORMATION ON AGOA AND TRADE PROMOTION

BACKGROUND
The East Africa Trade and Investment Hub (The Hub) is the U.S. Governments flagship project under
the presidential Trade Africa initiative, to boost trade and investment with and within Africa. The Hub
partners with East African and U.S. businesses to attract investment needed to transform the East
African private sector into vibrant global trading partners, improving the regions trade competitiveness,
encouraging the diversification of exports beyond natural resources, promoting broader and moreinclusive economic growth will lead to a more food secure and resilient East African Community.
The goals of the 5 year Hub project (2014-19) are to deepen regional integration, increase the
competitiveness of select region agricultural value chains, promote two-way trade with the U.S. under
the African Growth and Opportunity Act (AGOA), and facilitate investment and technology to drive
trade growth intra-regionally and to global markets.
The Hubs work is divided into four components namely Investment and ICT (C1), Agriculture and
Agribusiness (C2), Trade Promotion and AGOA (C3), and Trade Policy and Regulatory Reform (C4).
Trade Promotion & AGOA
The objective of this Component is to spur inclusive economic growth in East Africa through increased
trade, particularly to and with the U.S.; fostering value-addition; improving sector-wide business practices
and promoting the achievement of economies of scale. The AGOA and Trade Promotion team works
with Governments, trade associations and private businesses in Kenya, Rwanda, Tanzania and Uganda as
well as Ethiopia, Madagascar and Mauritius to increase non-oil exports to the US.
The Component cuts across all three of the Hubs components by strengthening East Africas ability to
attract and maintain investment (C1), supporting value addition, innovation and technology adoption in
agriculture (C2) and incentivizing the need for broad-based policy reform among our EAC partners (C4).
The component focuses on the following 5 sectors:
Textile/Apparel
Home Dcor/Fashion
Footwear
Specialty Food/Coffee
Cut Flower
What is AGOA?
The AGOA is a U.S. trade preference program designed to increase U.S. imports from eligible SubSaharan African (SSA) countries. It was effected by the U.S. Trade Act, signed by President Clinton on
May 18, 2000. It has been renewed severally, the latest being a 10- year renewal by President Obama to
2025.
Country Eligibility

AGOA eligibility requirements are set out in Section 104 of the AGOA legislation. Only SSA countries
are considered for eligibility, and with AGOA beneficiary status having been awarded to approximately 40
countries (this number changes from time to time). In order to qualify and remain eligible for AGOA, each
country must be working to improve its rule of law, human rights, and respect for core labour standards.
The U.S. determines, annually, whether countries have met the published eligibility requirements.
Beneficiary status may therefore be granted, or withdrawn, at the discretion of the U.S. President. AGOA
eligibility requirements are listed in more detail at this link https://agoa.info/about-agoa/countryeligibility.html
AGOA Product Eligibility
AGOA product eligibility implies that a product, when produced in an AGOA beneficiary country, may
enter the U.S. free of import duty. Products must comply with the relevant local processing (Rules of
Origin) as well as customs requirements.
Currently, AGOA preferences apply to nearly 7,000 tariff lines (at the HS8-digit level). This includes the
approximately 5,000 tariff lines currently covered by the U.S. Generalised System of Preferences (GSP)
plus a further 1,800 tariff line items added by the AGOA legislation. In addition, apparel sector tariff lines
also qualify where countries have met the AGOA apparel visa requirements. AGOA eligible products
comprise inter alia items previously excluded under GSP such as footwear, luggage, handbags, watches,
and certain automotive components etc. Most goods produced by East African nations are eligible for
duty free export to the U.S.
AGOA legislation adds a number of benefits, not least by removing the need for periodic GSP renewal
(the products therefore qualify irrespective of GSP renewal - an issue that came to the fore in 2012 when
the GSP was allowed to lapse for a few months), but also removes certain quantitative safeguards which
place limits on the quantity or value of any one product imported under the GSP program. These are
therefore a waiver from the GSPs Competitive Need Limitations. More information on AGOA product
eligibility are available at https://agoa.info/about-agoa/product-eligibility.html .
Rules of Origin
Rules of Origin (RoO) are the requirements which set out the working and processing that must be
undertaken locally in order for a product to be considered the economic origin of the exporting country.
This distinction becomes necessary and important where some of the materials used in the production or
manufacture of a good are imported from other countries.
The purpose of RoO is to prevent trade deflection and transshipment, whereby goods made elsewhere
are merely routed through a beneficiary country (of trade preferences) with insufficient or no local valueadding activities having taken place.
AGOA RoO are based on a percentage methodology, where local content must exceed a certain
threshold. Special rules are applicable to the apparel sector. Generally, AGOA requires that goods,
which are listed as eligible for AGOA preferences, must be the "growth, product or manufacture" of an
AGOA-beneficiary SSA country. They become the "growth, product or manufacture" of the AGOA
beneficiary by meeting the local content threshold via the percentage test.
Key features of AGOA's General (Non-Textile and Apparel) RoO:

The product must be imported directly from the AGOA-beneficiary country into the U.S. ;

Items must be "growth, product or manufacture" of one or more AGOA-beneficiary countries

(these requirements can be met jointly by more than one AGOA beneficiary leading to
cumulation of origin);

Products may incorporate materials sourced from outside countries (i.e. non AGOAbeneficiaries) provided that the sum of the direct cost or value of the materials produced in one
or more designated AGOA-beneficiary countrie(s), plus the "direct costs of processing"
undertaken in the AGOA-beneficiary countrie(s), equal at least 35% of the product's appraised
value at the U.S. port of entry (See the next point below);

Cost of local materials + direct cost of processing must >= 35%

In addition, a total of up to 15% of the 35% local content value (as appraised at the U.S. port of
entry) may consist of U.S.-originating parts and materials. This concept is called bilateral
cumulation of origin).

More details on RoO are available at https://agoa.info/about-agoa/rules-of-origin.html .

Apparel Provisions
AGOA provides duty-free and quota-free treatment for eligible apparel articles made in qualifying SSA
countries until 2025. Qualifying articles include: apparel made of U.S. yarns and fabrics; apparel made of
SSA (regional) yarns and fabrics until September 30, 2025, subject to a cap; apparel made in a designated
lesser-developed country of third-country yarns and fabrics until September 30, 2025, subject to a cap;
apparel made of yarns and fabrics not produced in commercial quantities in the U.S.; textile or textile
articles originating entirely in one or more lesser-developed beneficiary sub-Saharan African countries;
certain cashmere and merino wool sweaters; and eligible handloomed, handmade, or folklore articles, and
ethnic printed fabrics.

FOOTWEAR & HOME TEXTILE PROVISIONS

Footwear
All footwear from AGOA countries is duty-free, provided it meets RoO - needing a change of tariff
headings to 6401 to 6405, and has >35% regional value in appraised value of product.
This 35% regional value comprises costs or value of materials produced in one or more AGOA
countries plus, direct cost of processing operations performed in one or more AGOA countries with
no more than 15% coming from the U.S.
Textile Including Home Textile
Textile or textile articles originating entirely in one or more lesser developed beneficiary country
(Category 0) are also duty-free. This covers fibres, yarn, fabric, made up goods such as towels, blankets,
sheets, floor coverings among others.
Travel goods
All non-textile travel goods from AGOA are duty free in U.S. market, provided they meet RoO. The RoO
requires change to given tariff headings (part of series 4202) subject to regional value content of > 35% of
appraised value of product. However, travel goods made of textile fabric are not eligible for duty free

entry unless they are recognized as handmade/handloomed, ethnic printed or folklore items listed for
each country under Category 9.
How to Export Under AGOA
Register the business for purposes of demonstrating the credibility and legality of the business entity; then
follow these general steps:

Preparation of Invoice to provide for the details of the products from the seller to the buyer,
and also to facilitate the buyer in proving ownership and arrange for payment.

Obtain a Certificate of Origin to show the country of origin of the products being imported.
It is usually issued by exporting countries, official authorities or by other agencies designated by
the governments where the products originate from. It is used to ensure that products originating
in certain countries get the preferential treatment that they are entitled to.

Obtain AGOA Visa (Note: only for textiles and apparel exports), which is a visa
arrangement that establishes documentary procedures for each shipment of AGOA eligible
products from a designated beneficiary SSA country, to the U.S. Normally, the AGOA visa stamp
is issued by official authorities designated by the Governments where the products are originating
from and is fixed on the commercial invoice. Its main purpose is to avoid transshipment of
products from SSA exporters.

Export Logistics: Generally, finished products are delivered to the U.S. buyers destination. In
order to deliver to a U.S. buyers warehouse, or to comply with certain shipping requirements,
exporters typically engage logistics specialists to coordinate and track shipment. In most cases,
exporters rely on international freight forwarders and agencies to perform these services. Some
companies utilize the services of shippers associations. Other companies use express delivery or
mail services. It is also possible for exporters to arrange their own shipping.

Declaration to Customs at U.S. Port of Entry. If you are exporting goods to the U.S. for
sale or other commercial purposes, you must declare them to a Custom and Border Protection
(CBP) officer. On arrival at the port of entry, you must complete the CBP Declaration Form
6059B. This form provides basic information about who you are and what you are taking into the
U.S.

How to engage with the Hub on AGOA and Trade Promotion

The Hub undertakes the following activities to enhance AGOA utilization and exports by East Africa
enterprises:

Support for Development of National AGOA Strategies;

AGOA information dissemination and training;
Firm level technical assistance; and
Business Linkages trade fairs and inward buyer missions.

To engage with the Hub on issues related to AGOA, please utilize the following:
http://www.eatradehub.org/agoa , http://www.eatradehub.org/ask_an_agoa_expert ,
www.fb.com/groups/eaagoaexporters, @InvestEAfrica, Facebook.com/ EATradeandInvestmentHub or
send an email to info@eatradehub.org .
Useful Links
www.agoa.info Official AGOA information site.
www.tralac.org - Information on trade capacity building in East and Southern Africa.
https://hts.usitc.gov/ - Information on U.S. import tariffs.
http://www.fda.gov/ - Information on U.S. regulations on food, drugs, cosmetics and medical devices.
http://www.usda.gov/ - Information on U.S. policy and regulations governing food, agriculture and
natural resources.
Our Contact
The East Africa Trade and Investment Hub
P.O. Box 13403 00800 Nairobi, Kenya.
Tel. +254 787 685 389/708 836 013/734 610229
Email: info@eatradehub.org