U.S. Suspends Duty-Free Trade Access to Ethiopia Over Conflict

Samuel Gebre and Fasika Tadesse, Bloomberg News

Shipping containers stacked on the Maersk Essex cargo ship at the Port of Los Angeles in Los Angeles, California, U.S. on Friday, March 26, 2021. Overwhelmed U.S. ports, elevated freight costs and accidents that sent goods plunging to the bottom of the ocean are causing headaches for U.S. retailers already reeling from the pandemic. Photographer: Bing Guan/Bloomberg , Bloomberg

(Bloomberg) --

The U.S. suspended duty-free access to Ethiopian exports because of a yearlong civil war that’s spawned a humanitarian crisis in the Horn of Africa nation.

Ethiopia is not in compliance with the eligibility requirements of the African Growth and Opportunity Act because of gross violations of internationally recognized human rights, a senior U.S. official told reporters on a conference call. The determination can be reversed if the government addresses human rights, humanitarian and political crises by Jan. 1, the official said.

The suspension of duty-free access is a fresh blow to Ethiopia’s economy, which is already under strain from the growing cost of the conflict in the country’s northern regions and the impact of the coronavirus pandemic. The Horn of Africa nation exported goods worth $245 million to the U.S. last year under AGOA, accounting for almost half its shipments to America.

Tuesday’s announcement follows an executive order by the Biden administration authorizing sanctions against individuals and entities deemed to be prolonging the conflict in Ethiopia. The U.S. on Monday reiterated its threat to impose sanctions.

READ: Ethiopia Risks U.S. Trade Access on Tigray Rights Violations

The U.S. Embassy in Ethiopia said on Oct. 28 that in order to retain AGOA access, the Ethiopian government should allow the UN Human Rights Investigation Office to probe rights violations, the provision of humanitarian aid to conflict areas and the restoration of power and telecommunications services.

The UN and the Ethiopian Human Rights Commission are expected to release a report on Wednesday following their investigation into alleged violations of human rights, humanitarian and refugee law in the Tigray conflict.

The USTR completed its annual review of 49 sub-Saharan African nations last week. In addition to Ethiopia, Mali and Guinea didn’t meet the requirements to benefit from the preferential-trade agreement following coups in the two countries earlier this year.

AGOA is set to expire in 2025.