AGOA’S Architects Unveil New Africa Economic Policy For Obama Administration.

Ten years after the enactment of the African Growth and Opportunity Act (AGOA), a

coalition of its original architects and supporters on Monday unveiled a

comprehensive new trade and economic policy to be presented to the Obama

Administration that would build on AGOA’s successes and expand the growing trade

relationship between Africa and the United States.

The new policy proposal, entitled Enterprise for Development: A New Policy Approach

Toward Africa, calls for the continuation of AGOA’s exclusive duty- and quota-free

access to the US market for African goods, as well as policies to strengthen and

grow indigenous enterprises in Africa and measures that support job creation, export

promotion and prosperity in both the US and Africa.

At an AGOA Leaders Forum in Washington, DC, hosted by a coalition of AGOA’s US

supporters, and attended by African Ministers of Finance and Ambassadors, as well as

other AGOA stakeholders and business and policy leaders, Ms. Rosa Whitaker , chair

of the AGOA Action Committee and President and CEO of The Whitaker Group, the

premier US trade consultancy facilitating trade between the US and Africa, hailed

the success of AGOA over the past decade in creating more than 300,000 jobs in

Africa and bringing about $300 billion in export earnings and nearly $30 billion in

non-oil exports to Africa at a minimal cost to US taxpayers.

“Over the past decade, we have learned that AGOA should be just one tool – albeit a

critical one - in America’s arsenal to support Africa as it grows its own

prosperity. We have learned that what Africa needs from the United States is a

concerted, multifaceted trade and investment policy that brings together the trade

preferences of AGOA with trade capacity building, strategic development assistance

and incentives to spur greater foreign direct investment by U.S. businesses in

Africa,” she said.

Ms. Whitaker issued an impassioned call to action and warned that if current

proposals in the US Congress to extend AGOA benefits – duty and quota-free access to

the US market – to all Least Developed Countries (LDCs), including hyper-competitive

Asian nations, it would have catastrophic consequences for Africa, particularly to

the nascent apparel exporting sector.

Also speaking at the Forum were the Honorable Mr. Timothy Thahane, Minister of

Finance and Development Planning for the Kingdom of Lesotho, and renowned

development economist Dr. Paul Collier, Director for the Study of African Economics

at Oxford University.

“In Lesotho, 10 years ago over 150,000 men were working in South African mines,

having left women, children and old people in Lesotho. They had to scrape a

livelihood from the land. The government could not develop a viable agricultural

sector with only women and old people,” Minister Thahane said. “Then came AGOA. In

2000, the small apparel sector employed only 10,000 women. Between that time and

last year when the financial crisis hit, over 50,000 women had found work in the

industry. The employment provided by AGOA has made a difference in the lives of

Lesotho’s women and children.”

Mr. Thahane emphasized that Africans are not saying that the US Congress should not

grant special trade preferences to LDCs in Asia, but that legislators should provide

preferences that would help struggling sectors in those countries, rather than

benefit sectors that are already successful. “Preferences for Bangladesh and

Cambodia should not be at the expense of sub-Saharan Africa,” he said.

Even without duty-free and quota-free access to the US market, Bangladesh and

Cambodia export over $5 billion in apparel each year to the United States – more

than five times the total of all clothing exported to the US by all 48 SSA countries

combined.

The minister also pointed out that unlike Bangladesh and Cambodia, both of which

have agricultural resources, resource-poor Lesotho, Africa’s top apparel exporter,

has few other alternatives. “Extending preferences to these countries might kill

that industry that started in Lesotho 10 years ago,” he said. “Let us look at AGOA

in an open and strategic manner. There are people [in Africa] who have been making a

living out of access to the US.”

“AGOA has demonstrated that if we have the market opportunities, Africa can respond,

it can produce, it can deliver. Give us a break and we can deliver,” Mr. Thahane

added. “African governments are trying to reach larger markets through regional

integration, but we have to have the infrastructure and we also need the skills. The

entry point has been AGOA and let us not dilute it, let us expand it and make it

global.”

Dr. Collier described AGOA as so successful that it should be replicated by the

European Union and Japan. “There is a real opportunity for AGOA to go global. If we

had a Super AGOA that included Europe and Japan, it would make life so much easier

for Africa,” he said, describing the trade preferences offered by AGOA as the “pump

priming mechanisms” that are helping African nations to break into manufacturing and

the global market.

“We know where trade preferences should go, and where they should be kept out,” he

said. “If we give them to one huge manufacturer [like Bangladesh], it would cut out

all the little manufacturers. These big manufacturers must be kept out because they

are not entrants into manufacturing. Bangladesh doesn’t need privileged access.

There are many ways to help Bangladesh because it is still poor but [giving

preferential trade access to its apparel sector] is not the way to do it.”

Proposals contained in the new Enterprise for Development policy initiative include:

· Making AGOA permanent and exclusive to Africa and expanding

duty- and quota-free access to more African products.

· Extending tax incentives and credits for US investors in

Africa, and supporting regional integration through AGOA.

· Developing an effective plan to work with African nations to

revitalize the region’s agricultural sector, support local processing and

value-addition for Africa’s agricultural products, support increased sourcing of

African agricultural products from initiatives such as the World Food Program and

support technology transfers, technical assistance and assistance to African

agricultural exporters to meet US sanitary and phyto-sanitary requirements, and

boost overall US support for a Green Revolution in African agriculture.

· Reform the US foreign aid program to focus more on trade

capacity-building initiatives, extending loans to African businesses in the same way

that the Marshall Plan rebuilt Europe’s business sector following World War Two, and

supporting regional development and energy and infrastructure development in Africa.

· Expanding and reforming the Millennium Challenge Corporation

(MCC) so that it focuses its resources on building African energy and transportation

sectors and gives top priority bidding to US and African companies and procurement

projects.

· Increasing financing for US exports to Africa through the US

Export-Import Bank.

· Increasing support to the Overseas Private Investment

Corporation (OPIC) to enable it to support African equity and infrastructure funds,

increase assistance to small- and medium-sized companies in Africa, and more funding

for the African Technical Assistance Initiative.

For more information on Enterprise for Development: A New US Policy Approach Toward

Africa please contact Patrick Costello at patrick@thewhitakergroup.us.

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