TRALAC - Trade Law Centre

US Senate Leader Pleads for Passage of Third Africa Trade Bill

Monday, 22 March 2004

Source: The East African (Nairobi)

US Assistant Trade Representative in charge of Africa, FLORIZELLE LISER, was recently in Mombasa to attend trade talks aimed at breaking the deadlock at the WTO since the failed Ministerial Conference in Cancun last year. VITALIS OMONDI spoke to her on the Africa Growth and Opportunity Act (Agoa)

Why is the sourcing of raw materials an issue in Agoa if the trade initiative is all about opening the vast US market to producers from sub-Saharan Africa?

Agoa is a unilateral one-way deal that allows goods from sub-Saharan Africa entry into the US market under general the system of preferences. Although the third country fabric provision allows Africa to use less expensive yarn and cotton fabric from other sources [Asia], we don't want to develop other countries' raw material base. Africa has to develop its own competitive fabric industry.

We want the sub-Saharan African countries that are beneficiaries of Agoa to invest in developing a vertically integrated textile industry so that they do not have to over-rely on Asian countries.

Does the US economy benefit from Agoa?

Agoa is spawning positive effects on the US economy. Some yarn and fabric is being imported by African countries from the US producers, is then used for apparel production by firms in Africa for re-export back to the US. The apparel industry is the gateway to industrialisation. All developed countries leveraged on it before they eventually became what they are today.

But a look at the composition in Kenya reveals a heavy concentration of foreign investors . Do you have any comment on that?

There are about 40 apparel companies in Kenya, with only three of them being locally owned. Kenyans with money should be encouraged to invest in the Export Processing Zones.

A recent report by a human-rights watchdog in Kenya catalogues cases of human-rights abuses at the country's Export Processing Zones which produce principally for the US market under Agoa. Doesn't Agoa have some inbuilt mechanisms that can protect workers in this industry?

The criteria for eligibility to Agoa by all countries is stringent. We insist on good labour practices, good governance and economic reforms before we allow any country to access the benefits. So far, a total of 37 countries have been accredited. This year, we removed Eritrea and the Central African Republic over violation of these principles and added Angola to the list.

Is there a provision under Agoa to engage in capacity building in African countries since it is emerging that most of them lack the capacity to take advantage of Agoa?

Agoa also focuses on technical assistance to help countries develop their capacities. We want countries to diversify the range of products that they can export to the US under Agoa. Kenya can, for example, export cut flowers to the US. But we are also encouraging the export of processed commodities. Kenya should take advantage of value-addition and move from being a supplier of raw commodities to an exporter of processed goods.