U.S. Tariff Rate Quotas and AGOA Market Access
By David Skully
The African Growth and Opportunity Act (AGOA) provides preferential access to the U.S. market for qualifying sub-Saharan African countries above and beyond that provided under the Generalized System of Preferences (GSP). The exclusion applies to "any agricultural product...that is subject to a tariff-rate quota, if entered in a quantity in excess of the in-quota quantity for such product," (Harmonized Tariff Schedule of the United States (HTSUS), General Note 4(c)(vii)).This Policy Focus explains what the last statement means and its implications for AGOA market access.
A TRQ is a two-level tariff: a lower in-quota tariff is applied to a limited volume of imports in a particular period, and a higher over-quota tariff is applied to all additional imports. TRQs are complex trade measures and allocations under TRQs limit and distort trade into patters from decades earlier. Change is overdue, and this paper suggests several ways to change TRQs. Since AGOA is intended to help meet the broader agenda of expanding those countries which benefit from AGOA, diversifying exports from AGOA countries away from primary commodities such as oil, and using trade to reduce poverty in Africa, providing improved market access for TRQ-controlled commodities make sense.