TRALAC - Trade Law Centre

'Take more advantage of AGOA,' experts say

Thursday, 06 February 2003

Source: The Namibian

THE US Africa Growth and Opportunity Act (AGOA) can do much to stimulate Namibian trade and development, but not all parties are happy with the law's provisions.

Trade and Industry Minister Jesaya Nyamu, recently returned from a forum on AGOA in Mauritius, told a meeting of business people yesterday that the US represented a vast market for the products of sub-Saharan Africa.

"Sub-Saharan Africa accounts for less than two per cent of US merchandise imports, which indicates a huge potential for trade growth," Nyamu said.

"There are obviously immense opportunities for both American and African businessmen to exploit," he added.

He was pleased to note that Government had successfully dealt with the administrative issue of establishing a visa system, as required under AGOA, for textile and apparel exports.

The speedy finalisation of this process was especially important in view of the "multi-million dollar investments by the Ramatex, Rhino and Taiwa companies," Nyamu said.

The Trade Minister also said the US government was to send an expert from the US Animal and Plant Health Inspection Services to assist southern African countries in meeting sanitary standards for agricultural exports to the US.

For more than a year now, the US government has been conducting inspections of Namibian abattoirs and other facilities with a view to approving or refusing Namibian requests to send beef and lamb to the US.

But the process had not yet been concluded.

Namibia also supported current talks on negotiating a US-SADC free trade area, which were announced on January 13.

Through this, he said, benefits of duty-free access to US markets could be maintained after AGOA expires in 2008.

But while the benefits of AGOA are undoubtedly worth maintaining, they have not been evenly spread.

Phyllis Shearer Jones, Chief Executive of Elan International LLC, an organisation which tries to promote trade between Africa and the US, said in an interview the main beneficiaries so far were big firms.

"For a number of reasons, the rural women, the small businesses and co-operatives are not getting involved," she said.

These reasons included a lack of financing, lack of capacity, poor understanding of international business and the US market and US import regulations, including onerous ones in agriculture.

"These issues are roadblocks, but they can be overcome," she said, listing a number of organisations that provide training and "business matchmaking" services to small companies aimed at exporting to the US.

There was also the problem, for textile exporters, that the provision that allows clothes made in African from non-African fabric to be exempt from customs duty, expires at the end of the year.

"We are pushing to have (the) 2004 (deadline) extended, as Bush has said he would try to achieve, but if it is not it will hurt industries by pushing up their costs," she said.

Namibia exported US$37 million worth of goods to the United States in 2001, while it imported about US$255 million.