TRALAC - Trade Law Centre

AGOA forum connects Africans to Africans for business

Monday, 20 January 2003

Source: Business Report

Durban - "African delegates who came to Mauritius expecting to talk mainly to potential US investors made great contacts with each other for future business deals," Tim McCoy, the spokesperson for the private sector at last week's second Africa Growth and Opportunity Act (Agoa) forum, said at the weekend.

Intracontinental trade is providing a major spin-off for poor countries like Zambia, which has benefited from Agoa by selling yarn to Mauritius for the first time.

Mauritius is also investing in apparel factories in Madagascar as well as in Senegal, to cash in on the benefits of Agoa.

A number of countries are also diversifying their markets by selling yarn to textile mills in South Africa and Mauritius, as well as to Europe.

Dan Claffey, the public affairs officer for the US embassy in Pretoria, confirmed that African countries were working together on common problems and interests. He said regional co-operation was key in discussing trade issues with the US.

Comments from many delegates in Mauritius suggested a growing perception Agoa and the New Partnership for Africa's Development initiative - that encourages business, state and labour interaction - are beginning to work hand in hand to boost economic development in Africa.

The two initiatives have made good governance a common denominator, which could encourage further investment.

While the debate on extending the 2004 deadline for least developed countries to cut textile imports from third-country sources was high on the forum agenda, US trade representative Robert Zoellick would not commit on the issue.

The general consensus, however, was that gains from rolling over the deadline outweighed concerns that this would discourage textile investments.

McCoy said sticking to the deadline could force US apparel businesses in underdeveloped countries to close down.

"The US government will probably therefore delay making an announcement for as long as possible, so as not to ambush future investment decisions," he said.

Zoellick also postponed any decision on the 2005 deadline to scrap textile quotas from all countries, which would force African countries into direct competition with countries like China and India.

One of the biggest disappointments of the Agoa forum, and one that will need to be addressed at future meetings, was the apparent lack of communication between the private sector, governmental and non-governmental organisations, which held parallel sessions in different locations.

With government support key for private sector success, jubilation from delegates greeted US President George W Bush's videotaped announcement that he would ask congress to extend the Agoa deadline beyond 2008.

However, scepticism was expressed by Iqbal Sharma, the department of trade and industry's chief director of bilateral trade relations, who said congress could be unpredictable.

While Bush did not specify when he would put his request to congress, Claffey said the impression from delegates was that he needed to move "sooner rather than later".

Congress reconvened on January 7 and McCoy believed Bush's majority in both houses made stiff opposition less likely.

"There is a better than even chance of pushing through legislation," he said.