In a sign of worsening relations between the United States and Ethiopia amid the ongoing Tigray crisis, Ethiopia will be suspended from the United States’ tariff-free African Growth and Opportunity Act (AGOA).
Ethiopia, alongside coup-hit Guinea and Mali will lose access to the scheme, which provides tariff-free access to the US market for African manufacturers, from January 1, 2021.
Co-director of the African Security Initiative at Brookings, Vanda Felbab-Brown says AGOA brings Ethiopia about $100m in “hard cash” annually and directly generates employment for about 100,000 people, mostly women in southern Ethiopia working in textile factories that export to the US.
In recent months the US has in strong terms, criticised the conduct of Ethiopia’s war in the Tigray region, which began in November 2020 and is estimated to have claimed thousands of lives and thousands of displaced persons. Human rights organisations have reported massacres and mass starvation as the government’s war against the Tigray People’s Liberation Front (TPLF) escalated.
In a statement to Congress, US President Joe Biden said that Ethiopia’s “gross violations of internationally recognized human rights” would lead to its disqualification from the scheme.
The suspension follows a September 17th executive order sanctioning Ethiopians involved in violence in the Tigray region. Biden said that the situation in northern Ethiopia, characterised by “widespread violence, atrocities, and serious human rights abuses” constituted “an unusual and extraordinary threat to the national security and foreign policy of the United States.”
Global chief economist at Renaissance Capital,Charlie Robertson said that the suspension of Ethiopia from AGOA “isn’t likely to have a serious impact.”
“This sounds worse than it is. AGOA gives preferential trade access to African exporters – but Ethiopia doesn’t export much, let alone to the US. In 2020, Ethiopia only sold $3bn of exports based on IMF figures we’ve collected, and in 2018/19 just 7% of Ethiopia’s exports went to the US (according to National Bank of Ethiopia annual report for 2018/19)…So by my reckoning, this might impact less than $200m of Ethiopia’s exports, and even then this only removes the preferential trade access. Ethiopia presumably can still sell to the US.”