Small African Economies in a More Uncertain Global Trade Environment: The Potential Impact of Post-AGOA Scenarios for Lesotho

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

US Trade Preference and Export Performance of Sub-Saharan Africa (SSA): Evidence from the African Growth and Opportunity Act (AGOA)

“…Many countries believe that it has contributed in expanding beneficiary country exports and has created certainty and predictability for US buyers and investors. Maliszewska et al (2018), for example, show that Lesotho could sustain a 1% loss in income by 2020 and a 16% decline in exports of textile and apparel if AGOA is terminated. Given US policy (African countries’ preference) to promote economic development of poor countries through trade (not aid), the question is not whether AGOA will be terminated but what form it is likely to take.…”