The aim of this study is to examine the development and present condition of the African Growth and Opportunity Act (AGOA), to review cases of beneficiary countries that are utilizing AGOA and to analyze the effects of AGOA on African exports to the US. It also seeks to draw implications for Korea’s trade policies on Africa by prospecting US’s trade policies towards Africa in the Post-AGOA era.
   AGOA is a preferential trade agreement of the US that seeks to foster economic growth of and eradicate poverty in Africa by providing duty-free access to US markets for goods made in Africa. It is an agreement specific to Sub-Saharan Africa in addition to the Generalized System of Preferences (GSP) that is applied to developing countries in general. AGOA can be utilized by any African country as long as it satisfies certain criteria on governance, legal issues, human rights, and labor rights. The purpose of such conditions is to expand the principles of a free market economy and democracy as well as to foster economic growth. 
   AGOA was first implemented in 2000 and is expected to expire in 2025. Exports of crude oil in particular increased rapidly in the early years of AGOA but later declined after oil prices fell in 2008. Other items excluding crude oil and gas show a gradual increase in export, especially items from the light manufacturing sector such as textiles and apparel. This is because AGOA exclusively enables lesser developed countries in Africa to export textiles and apparel, which is unprecedented. In some countries, certain areas of the manufacturing sector such as textiles and apparel, or auto assembly are developing at a fast speed because AGOA has widened access to US markets.
   Chapter 2 examines the current status of AGOA, the utilization strategies of key beneficiaries, and also summarizes the outcomes and limitations of AGOA. AGOA is unique in that it is not a mutual trade agreement but is rather implemented in the form of a US trade law. Its beneficiaries are also determined based on a yearly evaluation by the executive branch. In 2018, 40 countries were determined as eligible beneficiary countries. US trade with Sub-Saharan Africa was measured at around $ 39 billion in 2017, which is 1% of the US’s total trade. Approximately 25~65% of imports from Africa receive preferential treatment through AGOA and GSP. Items include crude oil, gas, mineral resources, agricultural products, textiles and apparel, and automobiles. Trade and investment between the US and AGOA beneficiary countries have increased in general, but is limited mostly to the energy sector, mainly crude oil and gas.
   It is important from the African perspective to diversify export items that traditionally were centered on minerals and agricultural goods. The latter part of Chapter 2 outlines the national strategies of Kenya and Botswana, major countries exporting apparel and minerals respectively, in utilizing AGOA to diversify their trading items. The case of Ethiopia, who is trying to foster its manufacturing industry with a special focus on the textiles and apparel sector through AGOA, is also reviewed.
   Meanwhile, there are also many limitations to and criticisms of AGOA. First, there are institutional limitations arising from the fact that AGOA is a domestic legislation of the US and thus, the dispute resolution process is different from that of general trade agreements. The annual review of eligible countries also increases the uncertainty of the policy. Furthermore, the impact of lowering tariffs can only be limited if Africa's export capacity is not strengthened. Infrastructural development and widening the scope and size of Africa's exports need to be supported simultaneously. The latest revision of AGOA requires beneficiary countries to hold routine discussions with the US and includes measures to strengthen Africa's trade competence to overcome these challenges. African countries are diverging in their efforts to utilize AGOA as some countries take active measures to maximize opportunities arising from AGOA by providing implementation strategies and evaluation, while others are disqualified due to their lack of conformity with the AGOA regulations. This chapter also examines challenges to the development of long-term investment or trade because of the uncertainty of AGOA’s continuity and because its impact on the development of the manufacturing and agricultural sectors remain limited, unlike the case of crude oil.
   Chapter 3 analyzes the impact of AGOA on the variation of trade between the US and Sub-Saharan African countries. Based on a time series analysis only, trade in the early years of AGOA did in fact increase but also rapidly decreased after 2008. To identify the trade effects of AGOA one needs to control certain external conditions such as changes in the global economic structure and changes in Africa’s trade conditions during the same period as the operation of AGOA. Identifying the impacts of policy changes arising from the key revisions of AGOA is also important in assessing the effects of AGOA. This research utilizes the analytical methodology used by Frazer and Van Biesebroeck (2010), a representative study on the effects of AGOA, in examining the trade effects of AGOA over 16 years until 2017. The HS Code, which classifies trade data, modifies its upper 6-digit universal code through international consent every 5 years. The 10-digit code, the standard code used for tariffs and customs, can also be adjusted throughout the year reflecting changes in the US trade regulations. As a result, codes within trade data show discontinuity when using them for mid to long term time series analyses. To correct the errors arising from this problem, the analytical method of Pierce and Schott (2012) is used for the reclassification of goods over the entire time series in the trade impact analysis in Chapter 3. Results of the analysis show an overall increase of trade through AGOA but its effects vary according to the time and industry significantly. In particular, because a group of countries can export apparel duty-free as a result of AGOA’s uniqueness, certain differences were noted between different groups of countries in addition to the items of goods.
   Lastly, chapter 4 provides prospects on possible changes in the US trade policy towards Africa and draws implications for the Korean government’s trade policies towards Africa based on the review of the status of AGOA, cases of application, and its trade effects in the previous chapters. It is difficult to directly apply the policies of the US towards Africa not only because it is one of the leading countries in the international development and cooperation area, but also because the US provides preferential treatment to African countries through AGOA in addition to the GSP treatment. However, it is necessary to review AGOA in establishing Korea’s trade strategy for Africa because it is the representative trade policy on Africa.
   Since 2000, Africa is showing rapid economic growth with Ethiopia, Ghana and other eastern and western countries at its core. In March 2018, the African Continental Free Trade Area (AfCFTA), the largest trade bloc worldwide was established and is changing the trade environment of Africa at a fast pace. Consequently, emerging countries such as China, India, and Turkey, as well as traditional partners of Africa such as the US, Europe and Japan are reexamining their partnership strategies with Africa through which they are seeking to expand trade and investment networks. Korea also needs to draw out a plan on how to design its trade partnership with Africa, the next consumer market of this era, in addition to its development cooperation policies.
   An economic cooperation strategy that can be agreed by both Korea and its African partners is one that blends and balances trade issues with development agendas. In this sense, AGOA provides meaningful implications to Korea despite the differences in size and quality between the economic cooperation policies of Korea and the US towards Africa. It is not easy for Korea to adopt trade strategies such as the GSP or AGOA that can be applied to an entire group of developing countries or the entire African continent, considering Korea’s capability. The results of this research that show the varying degrees of AGOA’s impact based on the country, region, and industry provide several important implications. One suggestion would be to begin by selecting certain strategic trade partner countries or regions as a base for expanding Korea’s trade partnership with Africa, which would be in line with Korea’s capacity restraint. As can be noted in the Post-AGOA discussions, the US is also developing its agendas and strategies towards selecting priority countries with higher probabilities of business cooperation, such as middle-income countries or those who have an industrial base. Such an approach can be of consideration in designing Korea’s strategy.
   Developing a model of a reciprocal bilateral trade agreement with African countries is as important as selecting partners for trade cooperation. Reciprocal bilateral or multilateral free trade agreements pursued by Korea so far have been relatively symmetric is opening markets and also covers the whole range of economic cooperation such as bilateral trade, investment, intellectual property rights, and e-commerce. A symmetrical agreement that requires all parties to open its markets on the same level would be burdensome for African countries, especially as Korea’s consumer market is not as large as that of the US. Like that of the EU, a reciprocal bilateral trade agreement with African countries should open up markets on a medium to long-term time frame by considering the demand and conditions of developing countries. It should also reflect the mutual cooperation between Korea and African countries that is centered on the key areas where Korea can provide support for Africa’s economic development. The legal and institutional issues currently under discussion by the US government and assembly to support US investment in Africa and investment by African companies in the US, to maximize the effects of AGOA can also be adjusted to Korea’s situation.
   It is necessary to expand the framework where the agendas of economic cooperation can be discussed between Korea and the African Union (AU), with regional economic communities (RECs), especially as the importance of Africa is increasing with the launch of the AfCFTA. The AGOA Forum is held every year to strengthen the economic connection between beneficiary countries. Countries share the trade enhancement effects of AGOA, discuss barriers to trade and investment, and seek improvement measures at the forum. It would be meaningful to combine and promote the Korea-Africa Economic Cooperation (KOAFEC) supervised by the Ministry of Strategy and Finance, the Korea-Africa Industrial Cooperation (KOAFIC) supervised by the Ministry of Trade, Industry and Energy, the Korea-Africa Forum held between the Ministry of Foreign Affairs and the AU, and other policy consultative groups into one regular summit-level consultative body like that of Japan’s Tokyo International Conference of Africa’s Development (TICAD) or China’s Forum on China-Africa Cooperation (FOCAC).
   Last of all, the Post-AGOA discussion that was initiated at the 2018 AGOA Forum in consideration of 2025, when AGOA expires, should be noted. The US has made clear that it is shifting its policy direction towards signing reciprocal bilateral trade agreements with African countries. It will take some time for the bilateral free trade agreement mentioned at the AGOA Forum to materialize, but some African countries may competitively engage in negotiation with the US because it is of national interest to maintain preferential access to the US market. The Korean government needs to strengthen the monitoring of future trade agreements between the US and Africa because it is expected to be a higher level of reciprocal bilateral trade agreement that includes investment, service, transparency to actively expand support for US companies willing to invest in production facilities such as infrastructure in Africa, in addition to mutual tariff concessions to expand trade.