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AGOA Is Opportunity Ghanaians Are Grasping, Official Says

Published date:
Tuesday, 25 March 2003

Washington - The U.S. Government is "working very hard" using tools like the African Growth and Opportunity Act (AGOA) to increase trade with Ghana. Ghanaians, in turn, are working hard to take advantage of the act's favorable trade benefits to spur their economy by increasing exports into the U.S. market, says Deputy U.S. Trade Representative (USTR) Jon Huntsman.

To truly prosper, the American said Ghana "must move beyond traditional exports of primary commodities and diversify into value-added products. Under AGOA, Ghana has already begun this process and is establishing itself" as a major African supplier to the United States.

Huntsman spoke at the opening of the Ghana Investment Promotion Forum, held in the ornate ballroom of the Mayflower Hotel on March 20. The goal of the two-day conference is to showcase commercial opportunities in the West African nation while bringing American investors together with potential Ghanaian business partners, explained Ambassador Alan Kyerematen, who hosted the meeting.

The Corporate Council on Africa (CCA), the U.S. business association whose 160-member firms seek greater investment opportunities on the continent, is supporting the forum, which is showcasing four regions -- western, eastern, Ashanti and Brong Ahafo --and promoting investment in mining, agro-processing, tourism, and textile and apparel. Representatives of 200 to 250 U.S. and Ghanaian businesses were invited to the forum.

The gathering follows in the footsteps of the second annual U.S.-Sub-Saharan Africa Trade and Economic Cooperation [AGOA] Forum held in Mauritius in January. There representatives of the 35 sub-Saharan African nations deemed eligible under the act met with USTR Robert Zoellick to discuss ways to implement AGOA's trade benefits.

Signed into law in 2000, AGOA is America's first-ever trade pact with Africa. Its aim is to spur reforming African countries' export sectors by offering favorable duty- and quota-free access of their products, including textiles, into the U.S. market. President Bush signed an amended AGOA in 2002 that expands the range of products.

Ghana, said Ambassador Kyerematen, needs to "switch from public diplomacy to economic diplomacy" in order to attract more foreign direct investment (FDI). Thus, the forum serves as a venue for U.S. investors and businesspeople to interact with Ghanaian government officials, including the Minister for Trade and Industry. The ambassador also indicated that the U.S. has the resources to support American businesses in Africa.

Huntsman, a former businessman like Ambassador Kyerematen, told his Washington audience, "I am particularly pleased to be here because I've been to Ghana and I have concluded that it is a very impressive country. As a former businessman, a few things jumped out at me that are so important to trade investment: a one-stop shop, which is critically important to businesspeople" trying to do business in a strange land.

After having recently met with President John Kufuor and several top cabinet ministers, the American said democracy and political stability were important advantages Ghana now possessed. Increasingly U.S. companies are "looking for a stable environment. So, I compliment you on your approach to attracting trade and investment."

Huntsman added, "Businesses are looking for predictability and certainty" as well as political stability. "They don't always need to be guaranteed a profit. But they need to be guaranteed that the rules of trade and commerce will always be predictable... and that they can rely on the government, year in and year out."

As a result of the West African nation's efforts to facilitate trade and investment, the U.S. official said, "We are working very hard with Ghana to maximize AGOA benefits and the benefits are certainly there. With AGOA, and GSP -- what is called the general system of preferences program -- and most favored nation status accorded to Ghana, almost all products from it can now enter the United States duty free."

In general, said Huntsman, "AGOA has opened the U.S. market to sub-Saharan African products. As a result of the act...92 percent of all U.S. imports from [38 AGOA] eligible countries now enter duty free. U.S. imports of AGOA products are growing steadily. They reached $9,000 million last year in 2002, which was a 10 percent increase over 2001."

But Ghana, said Huntsman, has "some potential to achieve even greater benefits under AGOA. Total trade between the United States and Ghana was valued at $309 million in 2002. Our trade relationship traditionally has been dominated by Ghanaian exports of refined petroleum, cocoa, wood and U.S. exports to Ghana of machinery and grains. However, our trade relationship is already starting to move beyond these products as Ghana continues to diversity its economy and export more value-added products."

Besides its political advantages and move toward economic reform, Ghana also has "a diverse rich resource base. It is a leading producer of cash crops and has also established itself as an exporter of non-traditional agricultural products like pineapples, cashews and pepper."

It also has a "very advanced industrial base, compared to many other African countries," Huntsman said. "Its industrial output includes: textiles, steel, tires, oil refining, flour milling, beverages, and the assembly of cars, trucks and busses. These are all established industries in Ghana that could be targeted for further development."

To assist Ghana in expanding its production and export capacities and "take advantage of its comparative advantages under AGOA," Huntsman said, "The United States has opened a special office in Accra, which is one of three regional [African] hubs for global competitiveness. The Accra hub is a central location for USAID (U.S. Agency for International Development) trade-related programs in sub-Saharan Africa. It houses many experts on AGOA and other topics who will provide technical support on trade and investment as well as design and carry out trade capacity-building programs."

As "an important resource and asset" for expanding trade," Huntsman said information about the hub could be accessed on its Internet website whose address was:

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