Monday, January 20, 2003

Is AGOA (African Growth & Opportunities Act), the seemingly benevolent and well-intentioned free trade arrangement between Africa and the US, really as innocent and benevolent as it seems? I am not convinced of this and have tried to assimilate some background to ensure that it's not just my general (and often unfounded!) suspicion of things American that is giving me this uneasy feeling about this act. The reality is that, especially in the apparel industry things are certainly looking up. I would imagine that the quality suits from the likes of House of Monatic are covering many a well-girthed American right at this moment. The question of the long term sustainability of such projects remains as well as the question of how long this is going to last. Will the plug be pulled just when the capital expenditure required to get some real return out of AGOA has been laid out. The question really is whether AGOA is just too Clintonesque to be fully supported by the incumbent president Bush.

Interesting and fairly lively discussion emanating from Africaonline

in Kenya. Excerpt follows:
Press release from the State Department today:

"U.S. imports of goods from sub-Saharan Africa declined in 2001, but goods qualifying for favored treatment under the Africa Growth and Opportunity Act in this first full year of the program totaled $8.2 billion, with most
of the AGOA imports accounted for by the energy sector."

Thanks Mr Bush, you're really helping us Africans buying Oil and nothing else and pretending that AGOA is really helping Africans. When you come to Mauritius (that very African country 3000 miles to our east) next month and tell the world how America is helping Africa, make sure you don't tell them the real story about how AGOA is benefitting Oil companies not Africans.

There needs to be some earnest debate on this issue. The US Senate staff (Robert Zoellick in particular) involved on AGOA appear to be genuine - well they come across that way in their interviews. I do hope that they receive genuine support to make this a real growth opportunity to clothe and feed Africa for the long term. This must not be another way to extract commodities from Africa (such as Gabon's oil) with little sustained return investment.
The acid test by which to judge the genuineness of motivation behind AGOA will be if the US Government is prepared to allow the duty free importing of African of agricultural commodities into the US and simultaneously cuts the tremendous farm subsidies that US farmers receive. This political potato is, I fear, simply too hot too handle.
Cape Talk

reports that "US Trade Representative Robert Zoellick brought a simple message to dozens of African ministers gathered in the Indian Ocean island of Mauritius: the key to development and poverty reduction is free trade and open markets." The thing about free trade is that it needs to come from both parties and tariffs are only a small portion of the bargain. The more challenging issue is a levelling of the playing field when it comes to subsidies and tax incentives applicable to the competing suppliers.

Justine Nofal writes in the Mail and Guardian Online If the history of the North American Free Trade Agreement (Nafta) is anything to go by, the Southern African Customs Union (Sacu) countries are in for a torrid time if the United States succeeds in closing a similar agreement with them.

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