Press Release

April 5, 2017
Cardin, Isakson, Coons Introduce Legislation To Enhance, Modernize African Growth And Opportunity Act, Millennium Challenge Act

WASHINGTON – U.S. Senators Ben Cardin (D-Md.), Johnny Isakson (R-Ga.), and Chris Coons (D-Del.) introduced the African Growth and Opportunity Act and Millennium Challenge Act Modernization Act (AGOA and MCA Modernization Act) Wednesday, legislation to improve the transparency and impact of the Africa Growth & Opportunity Act (AGOA) and enable the Millennium Challenge Corporation (MCC) to address regional development challenges and enhance trans-border economic growth opportunities in developing countries.

The bill allows for the establishment of concurrent compacts in eligible developing countries, providing MCC with the flexibility it needs to promote economic growth and cross-border engagement between and among nations. The bill also aims to accelerate the impact of AGOA — which offers duty-free access to the U.S. market for most exports from eligible sub-Saharan African countries — by requiring the State Department to better promote the program with sub-Saharan African governments and businesses. Similar legislation was passed out of the Senate Foreign Relations Committee last year. 

“This legislation will strengthen MCC’s ability to build upon an already impressive track record of cost-effective, long-term economic solutions in developing countries,” said Senator Cardin, ranking member of the Senate Foreign Relations Committee. “Compacts that cross borders, expand markets, and strengthen regional growth have the potential to lead to even higher rates of return on investment and larger scale reductions in poverty. This bill ensures that MCC has all the tools it needs to deliver smart, efficient, and effective U.S. development assistance. I am also pleased we were able to include important provisions to enhance our trade partnerships with sub-Saharan African countries and ensure the Africa Growth & Opportunity Act continues to be strengthened.”

“I believe in the power of our development assistance, and one of the keys to its success is economic growth. The Millennium Challenge Corporation has a proven track record, and I am excited to expand its ability to promote cross-border engagement in developing countries,” said Senator Isakson, chairman of the Senate Foreign Relations subcommittee on bilateral international development. “I am glad that we are strengthening the African Growth and Opportunity Act and look forward to continuing our work throughout sub-Saharan Africa.”

“It is critical that we do all that we can in Congress to encourage sustainable economic growth in developing countries and expand American businesses’ access to overseas markets,” said Senator Coons, a member of the Senate Foreign Relations subcommittee on bilateral international development. “I am thrilled that this legislation will help promote trade with sub-Saharan Africa and authorize MCC concurrent compacts, increasing regional trade and stability for eligible countries.”

About the bill:

Over the last fifty years, economies around the world have experienced significant and sustained growth that has been fueled by support for regional infrastructure and integrated trade agreements. Developing nations, international organizations and regional economic bodies, have increasingly realized that key drivers to economic growth must involve greater cross-border collaboration and regional economic integration. Through greater regional economic collaboration countries can address deficiencies in communications, transport, and energy networks and have a targeted impact on infrastructure deficiencies, unemployment, and poverty reduction. 

The Millennium Challenge Corporation (MCC) plays a unique role in economic development throughout the world and has proven its ability to work with nations to improve economies and tackle issues that inhibit regional integration. Past MCC compacts have increased access to reliable power, enhanced highway corridors, and upgraded regional trading hubs, but future compacts could go further to expand the impact of MCC by giving MCC the flexibility to do additional smaller, staggered projects with multiple countries.

The African Growth and Opportunity Act and Millennium Challenge Act Modernization Act (AGOA and MCA Modernization Act) would give MCC the authority to develop concurrent compacts with one country, if one or both of the compacts are for purposes of regional economic integration, increased regional trade, or cross-border collaborations and if the country has been able to demonstrate progress toward meeting objectives of the original compact and sufficient capacity to successfully handle additional compacts. Concurrent compacts will allow for economic growth and cross-border engagement between and among nations creating larger and more compatible markets enabling the U.S. private sector to compete more effectively and partner with the host-country private sectors. The bill also makes other improvements such as allowing MCC private sector Board Members to continue to serve after terms expire until a successor is appointed for up to one year and preserving candidacy status for countries that move into a different income peer group.

The AGOA and MCA Modernization Act also contains a number provisions to improve the transparency and utilization of the Africa Growth & Opportunity Act (AGOA), which offers duty-free access to the U.S. market for most exports from eligible sub-Saharan African countries. The bill directs the State Department of promote the use of the AGOA program by establishing a website and directing embassies to promote the program. It also directs the President to implement policies that facilitate regional trade among sub-Saharan African countries and provide capacity building for companies and governments to improve AGOA utilization.

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