AGOA becoming a really big stick

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There has been an interesting development around AGOA, with the USA proposing an amendment to the legislation that will allow them to selectively suspend or limit the benefits of certain countries.  In the previous incarnation of AGOA, the USA could only sanction a beneficiary country by removing it from the agreement, making this a really blunt instrument.  The proposed updates will allow the USA to limit benefits or suspend a country for a period, thus allowing for more nuanced negotiations.  It also means the USA is not tied into long 15 year cycles with partner countries that it is uncomfortable with.  It can act against those countries, through AGOA, by using the new sanction methods, which has the effect of seriously increasing the long-term leverage the USA has through AGOA. Already the USA is wanting to place South Africa on probation for 3 years, without South Africa having to give the USA feedback every 6 months in order to continue enjoying the benefits under AGOA.  Ironically, the poultry industry is the source of contention between the USA and South Africa, but poultry does not actually have preferential access to the USA under AGOA and so any sanctions that the USA may apply against SA will impact completely unrelated industries.  This cannot be a comfortable position to be in if you are a textile manufacturer and dependent on the USA market for your livelihood. Finally, the USA is wanting SA to provide tariff concessions similar to what was provided in the EU SA Trade Development and Cooperation Agreement.  This issue has raised its head a few times over the years, but negotiations have never moved to a point where such concessions seemed likely.  It would appear as if America now has leverage it never had before which could result in some very interesting discussions over the next year.

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