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U.S. Trade Act Has "Uneven" Impact Across Africa

Although Successful, Trade Act Has "Uneven" Impact Across Africa

Assistant USTR Florizelle Liser addresses AGOA Assessment Forum

By Charles W. Corey
Washington File Staff Writer

Washington -- Thanks to the historic African Growth and Opportunity Act (AGOA), the $11 trillion U.S. market is wide open to exports from sub-Saharan Africa’s 37 AGOA-eligible countries, Assistant U.S. Trade Representative for Africa Florizelle Liser told a Washington audience September 14.

She cautioned, however, that while AGOA has been successful, its overall impact has been “uneven” across the continent, and she called on African countries to further diversify their economies.

“In 2004, over 98 percent of U.S. imports from AGOA beneficiary countries entered the United States duty-free. … Market access really does not get much better than that,” Liser said during a seminar entitled “AGOA Five Years Later: Lessons Learned, Challenges Ahead,” held at the Wilson Center for International Scholars.

“The market access provided by AGOA represents an important tool for helping African countries boost economic growth and development and address poverty,” she told her audience.

As a result, she said, many African countries have realized “significant trade and investment benefits” through AGOA. “U.S. imports from sub-Saharan Africa leapt by over 50 percent from 2000 to 2004,” she noted.

Contrary to popular belief, she said, the trade spike was “not just oil,” but included a diverse list of products, among them apparel, automobiles and processed agricultural goods.

“African apparel imports alone have more than doubled since AGOA came into effect, rising from $748 million in 2000 to $1.7 billion in 2004," Liser said. “Last year, 15 AGOA-eligible countries exported apparel to the United States. Prior to AGOA, only a few countries exported such goods to the United States.

“This increased trade,” she added, “translates into tens of thousands of new jobs in some of the poorest countries in Africa and hundreds of millions of dollars of new investment in the region.”

Kenya’s exports to the United States – which include fresh-cut roses, nuts, essential oils and apparel -- have been doing very, very well, Liser said. As a direct result of AGOA, she added, many African businesses that had never previously considered the U.S. market are now attending trade shows in the United States -- and getting orders. “Everything from Congolese honey wine to Senegalese seafood to Rwandan baskets” is finding its way to eager customers in markets all across the United States, she said.

She cited as an example the giant U.S. department store chain known as Macy’s, which has put in a huge order for Rwandan baskets.

Although more and more African countries are taking advantage of AGOA, Liser cautioned that the bulk of the trade act’s positive impact has been concentrated in 12 African countries. Some other countries, she added, “have yet to export anything under AGOA.”

What is essential for the promotion of greater U.S.-Africa trade growth, she told her audience, is that African countries further diversify their economies and the range of products they export. “Among AGOA-eligible countries, only South Africa -- which, of course, is the most industrialized economy in sub-Saharan Africa -- has come close to realizing AGOA’s full potential,” she said.

South Africa has exported more than 300 diverse products under AGOA: everything from luxury cars to citrus fruits to processed food products, she added.

Liser told her audience of African ministers, business executives, Africanists and trade specialists that a broad array of product lines -- such as footwear and fresh and frozen vegetables and light manufacturing -- is still under-represented on the continent-wide AGOA export list.

She pledged the U.S. government’s continued commitment to providing technical assistance to African countries on ways to fully benefit from AGOA and to helping them further expand their trade internationally. Liser also praised recent efforts by African governments to organize themselves regionally in order to explore ways they can join forces to best benefit from AGOA.

She reminded everyone that the U.S. Agency for International Development, to further expand and enhance the U.S.-Africa trade relationship, has established trade hubs, with AGOA advisers, at strategic points throughout Africa.

Liser also cited President Bush’s African Global Competitiveness Initiative, which was announced at the recent AGOA Forum in Dakar, as another measure to further expand U.S.-Africa trade. That important initiative, she said, has a five-year funding target of $200 million in new money to bolster the work of the trade hubs and further promote export diversification.

Liser said AGOA has had a “positive impact" not only for African business but for American business as well. From 2000, when AGOA was launched, to 2004, U.S. exports to sub-Saharan Africa increased 44 percent, she noted.

“The existence of AGOA helped to raise the profile of African markets for American businesses and encouraged many to explore new business opportunities there for the first time,” she said.

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