THE AMCHAM POST—JUNE 01, 2023 

As part of the promotion of the bilateral trade between the United States and Madagascar, the U.S. Embassy joined forces with Madagascar’s Ministry of Foreign Affairs to discuss opportunities and challenges ahead. Held last Thursday, the event brought together key stakeholders and the private sector including experts from the Ministry of Industrialization, Trade, and Consumption; regional representatives of the U.S. Development Finance Corporation; the Foreign Commercial Service; and the American Chamber of Commerce in Madagascar to name a few.

U.S.-Madagascar commercial ties

Trade between the two countries reached almost one billion dollars for the first time last year, and Madagascar was the fourth largest non-petroleum exporter to the United States under the African Growth and Opportunities Act (AGOA). Being the second commercial partner of Madagascar after France, the United States is the largest market for two of Madagascar’s most important exports – textiles and vanilla – which enter the United States duty-free thanks to AGOA, creating over 100,000 jobs in Madagascar.

During his opening remark, Tobias Glucksman, Chargé d'Affaires at the U.S. Embassy in Madagascar, regrets that American companies are confronted with a difficult investment climate in the country. Therefore, he urges seizing every opportunity to address some of the concerns expressed by American companies operating in Madagascar that are taken into account by the newly released National AGOA Strategy document, such as the unpredictability of tax and regulatory regimes. “At a time when the U.S. Congress is considering renewing AGOA in 2025, Madagascar must seize this opportunity to improve the competitiveness of its economy, whether or not AGOA is renewed in 2025,” this senior advisor to the U.S. Embassy in Madagascar said.
The United States has confirmed its commitment to helping Madagascar fuel its economy in a way that is sustainable, open to American investment and beneficial to the Malagasy people. “Now is the time to think creatively about ways to stimulate economic growth and development, not only for Madagascar, but also for the U.S.” he added.

Madagascar’s National AGOA Strategy (2022-2025)

The two governments took this opportunity to officially launch the USAID-funded Madagascar National AGOA Strategy 2022-2025, a roadmap to further increase Madagascar’s exports to the United States under AGOA and improve the investment climate in Madagascar.
Succeeding the previous strategy, this new Madagascar National AGOA Strategy covers all aspects of analysis and design necessary for the formulation of a post-COVID plan and an update of the previous National AGOA Strategy. As such, the Strategy consists of two primary components. The first is an assessment of the COVID-19 impact on Madagascar and AGOA-related sectors. The second is an update of Madagascar’s AGOA strategy, with the goal of developing a road map for the Government of Madagascar to maximize the benefits under AGOA and to implement this strategy to penetrate the U.S. market. The AGOA Strategy identifies the key gaps in private sector comprehension of the AGOA mechanism and U.S. market trends, and formulates plans to correct these deficiencies.

The AGOA Strategy consists of a selection of sectors and products with the greatest market potential in the United States. When considering viability for the AGOA market, attention was given to regulatory requirements, standards and related certifications that are needed to enter the U.S. market and highlights the steps necessary for current and potential manufacturers to meet the relevant rules of origin and market-entry requirements.
A review of lessons-learned from other countries that have successfully taken advantage of AGOA was also analyzed for benchmarking purposes. The AGOA Strategy looks at best practices and underscores key success factors to be considered and implemented.
Finally, and most critically, the AGOA Strategy outlines how Madagascar must position itself in the next three years to build its competitiveness in preparation for a possible post-AGOA trade environment.
                                                                                                                                                                                                                   By Maherintsoa Andrianiaina