US suspension policy from the African Growth and Opportunity Act (AGOA): An estimation of the missing exports from sub‐Saharan Africa

Abstract

AbstractThe African Growth and Opportunity Act (AGOA) is a unilateral duty‐free access program granted by the United States (US) to exports from sub‐Saharan African (SSA) countries. However, provisions of the AGOA text specify that countries can be suspended from the program in case of political turmoil and human rights violations that threaten democracy and the rule of law. This paper constructs a two‐step framework combining matching techniques and gravity regression to quantify the loss of exports due to AGOA suspensions using high‐disaggregated data of exports (10‐digit HTS level) from Africa to the US during 2001–2020. The AGOA suspension resulted in a 54% decline in SSA countries' exports to the US. Estimations suggest that, since 2004, the US suspension policy led to a reduction in exports from suspended countries of approximately 691 million USD on average per year. Over the 17 years (2004–2020), the suspended countries lost a total of 11.7 billion USD in the value of their exports to the US.