The African Growth and Opportunities Act (AGOA)

The AGOA⁵⁶³ is a US law based on which the USA maintains preferential non-reciprocal trade agreements with 39 countries in Sub-Saharan Africa. Originally enacted by the US Senate on 18^th May 2000, AGOA was renewed in 2015 for another ten years. Currently, the list of countries eligible to receive benefits under AGOA includes all West African states, except Gambia.⁵⁶⁴ The list however is not permanent, but subject to the wish of the US president. Section 104(a)(1)(A) of AGOA indicates that the US drafted AGOA with the objective of streamlining a market-based approach in African countries, that principally protects commercial interests and private property rights.

Background: AGOA was drafted predominantly by US policymakers and subsequently imposed on African countries as a ‘take it or leave it’ position. African countries have little or no ability to negotiate more favourable terms therein. As such, AGOA could be better described as a forceful imposition, rather than as an agreement between the US and African countries. ⁵⁶⁵ The provisions of the Agreement adopt the TRIPS- plus standards of the UPOV agreement, rather than the IP standards contained in TRIPS.

563 US Trade and Development Act, 2000; P.L. 106-200 [AGOA].

564 “AGOA Country Eligibility”, AGOA.Info, (2019), online: <https://agoa.info/about-agoa/country-eligibility.html>.

565 Thaddeus Manu, Reasons for AGOA, supra note 203, at 15.

Content: For a country to be eligible to participate in AGOA it has to fulfill certain conditions, including: the establishment of a market-based economy that protects private property rights;⁵⁶⁶ and the strengthened protection of IPRs.⁵⁶⁷ The main provision relating to IP protection is section 104, which authorizes the US President to designate an African country listed in section 107 as a beneficiary of trade concessions if the President determines that such a country has established or is making progress towards establishing national treatment and measures to create an environment conducive to domestic and foreign investment, and the protection of IP, including providing systems for the resolution of bilateral trade and investment disputes.⁵⁶⁸

Open markets, free trade and private property rights are the tests employed to evaluate countries under this treaty, without assessing non-economic indices. Also, section 111 of the AGOA stipulates the strengthening of IP protection for US firms, in accordance with sub-paragraph (5) of Section 502(C) of the Trade Act 1974, as a fundamental requirement for designating countries as beneficiaries. By emphasizing the protection of IP as an eligibility criterion, AGOA effectively operates as an external or bilateral pressure that is forcing African countries to desert the much more beneficial sui generis systems under the WTO-TRIPS agreement, and instead opt for the TRIPS-plus UPOV agreement, to which many ECOWAS countries are not signatories.⁵⁶⁹ Consequently, certain authors view this condition in AGOA as a means for the US to enforce its national IP protection laws on African countries resisting the adoption of the WTO-TRIPS agreement. ⁵⁷⁰

566 AGOA, S.104(a)(1)(A).

567 AGOA, S.104(a)(1)(C).

568 AGOA, Section 104(a)(1)(C)(ii).

569 Thaddeus Manu, Reasons for AGOA, supra note 203, at 15.

570 See Carol Thompson, “US Trade with Africa: African Growth & Opportunity?” (2004) 101 Review of African Political Economy, 457 at 465-466; and Peter Drahos, “Expanding intellectual property’s empire: the role of FTAs”, GRAIN, 30 November 2003.

Under Article 27.3(b) TRIPS, WTO Members are given the option of providing for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. This provides flexibility for West African countries to craft IP regulations suited for their agricultural systems. In contrast, Article 18 of the UPOV Act 1991 specifies that:

“The breeder’s right shall be independent of any measure taken by a Contracting Party to regulate within its territory the production, certification and marketing of material of varieties or the importing or exporting of such material.” This provision, along with Article 5.2 of the UPOV, would not allow the right of the breeder to be subject to other interests such as regulations protecting small scale agriculture and subsistence farmers. The breeders right is extended to include authority over harvested material (Article 14.2 UPOV), while farmers’ rights are made subject to the interests of breeders (UPOV Art 15.2). Patents under TRIPS last for 20 years. PBRs under Article 19.2 of ALGOA make 20 years the minimum, not the maximum length of protection.

These UPOV provisions will curtail the capacity of West African states to apply the provisions of the TRIPS Articles 7-8, the CBD and ITPGRFA that allow for conservation and social interests to be factored in IP regulations.⁵⁷¹ Considering the preeminence given to PBRs, rather than farmer’s rights that are required to support food security in the West African region, AGOA will have disparaging effects for food security in the region.

The US favors a strong approach to IP protection which: advances proprietary control of agricultural seeds and genetic material through PBRs, over farmers’ or community rights; favors the private interests of multinational corporations in open markets and trade, above national non-economic public interests of states; utilizes bilateral trade agreements to compel African countries to adopt TRIPS-plus and UPOV for IP standards more quickly, including LDC; and reduces the

571 See Thaddeus Manu, “Ghana trips over the TRIPS Agreement on Plant Breeders’ Rights” (2016) 9 African Journal of Legal Studies, 20-45.

ability of states to adopt sui generis systems of IP protection and other flexibilities provided under the WTO-TRIPS agreement.⁵⁷²

The AGOA approach stands in disparity with the need for greater flexibility needed to support the traditional agricultural practices maintained by small scale farmers in West Africa, who supply 80% of the agricultural production for local consumption in the region.⁵⁷³ Generally, agricultural production in the ECOWAS region is built on small holder subsistence farms (of less than 10 hectares), producing a wide variety of crops.⁵⁷⁴ Smallholder farmers have developed crop systems which are based on traditional knowledge, development of local varieties and the free exchange of seeds, areas that are not protected under formal IP regimes.⁵⁷⁵ A lot of the agricultural trade in West Africa is carried out informally. Relatively little use is made of IP protected genetically modified seed, or technology like fertilizers and agricultural machinery. Also, more than 90% of seeds used by smallholder farmers are sourced from among themselves through traditional and informal seed exchange and sharing practices.⁵⁷⁶ This is especially true in the case of food crops.⁵⁷⁷ Recent studies suggest that, due to its sustainability, traditional knowledge relating to Africa’s local plants plays an important role in fostering food security and nutritional health in the region.⁵⁷⁸

Implications for Food Security in West Africa: If West African countries accept Section 104(A) conditions, then the impact of strengthened IPRs will increase royalty payments required by the

572 Thompson, supra note 583, at 465.

573 International Fund for Agricultural Development (IFAD), (2013) ‘Smallholders, Food Security and the Environment’. Online at: http://www.unep.org/pdf/SmallholderReport_WEB.pdf, at 10.

574 Roger Blein et al, supra note 467, at 7-9.

575 Ibid, at 7-9, and 30.

576 Borowiak, Farmers’ Rights, supra note 512, at 511–543.

577 Roger Blein et al, supra note 467, at 31-32.

578 See Asogwa, Okoye & Oni, supra note 470, at 75-87; Cordeiro, supra note 470, at 273-287.

technology holders. As most of the PBRs and patents related to seeds and agricultural products are owned by non-African countries, this would increase the costs of access to West African countries.

It would also reduce the control of farmers over their seeds.

Under AGOA, signatory African countries are able to implement public interest measures only if they are permissible under US jurisprudence. Notably, the US strictly protects PBRs under its Plant Variety Protection Act and forbids the use of compulsory licensing thereof. Unless and until an effective system of compulsory licenses is established on the African continent, the technology holders may simply refuse to transfer their technology and thereby block local technology development initiatives by West African industries. Reverse engineering, and other methods of imitative innovation that developed countries extensively used when their economies were not competitive, is made difficult even more difficult under AGOA.⁵⁷⁹

A US Congress report highlights the fact that participation in the AGOA has not facilitated increased agricultural exports for countries in West Africa.⁵⁸⁰ Energy-related products (e.g., crude oil) dominate U.S. imports from Sub Saharan Africa (SSA) under AGOA and the General system of preferences (GSP), representing 69% of such imports in 2014. U.S. imports from SSA under AGOA and GSP are heavily concentrated in South Africa. Ivory Coast ($70 million) and Malawi ($60 million), also exported primarily cocoa products and tobacco under the preference programs.

Aside from these top countries, however, the preferences were not heavily utilized. Most of the current trade between West African countries and the USA would continue inspite of the AGOA.

Considering that the preferences were granted to crops for export rather than food crops, it is unlikely that AGOA participation will lead to increased food security in West African states.⁵⁸¹

579 Thompson, supra note 583, at 465-466.

580 Brock Williams, “African Growth and Opportunity Act (AGOA): Background and Reauthorization”, Congressional Research Service Report, R43173, 22 April 2015.

581 Ibid, at 8-11.

AGOA does not require modest economic deregulation, but the outright removal of any and all tariff protections. This opens African markets to a dumping of American agricultural products which, because they are produced in large quantities at subsidized costs and have higher value added, are likely to compete and inevitably undermine local agriculture.⁵⁸² Many agricultural products from the continent are unable to compete with the phytosanitary standards required by the US, while some products have been excluded from the AGOA framework.⁵⁸³

The implications that this will have for food security in West Africa, is illustrated in the following example: During the 1991-92 drought in Southern Africa, Zambian farmers were able to produce some wheat because of irrigation schemes. Because Zambia had opened up its agricultural markets under a structural adjustment programme, the US could dump wheat in landlocked Zambia at a selling price cheaper than the Zambian farmers’ break-even price. Zambian wheat, which should have elicited premium prices because of the drought, could not be sold.⁵⁸⁴ Economic studies do not indicate that AGOA has led to increased trade for African countries that have not already acquired substantive technological capacity in agriculture, thus reducing its benefits for food security in West Africa. ⁵⁸⁵