TRALAC - Trade Law Centre

AGOA Vital to Africa's Trade Growth

Monday, 31 May 2004

Source: Engineering News (South Africa)

The African Growth and Opportunities Act (Agoa) and black economic empowerment (BEE) share many common goals, the US Embassy’s economic officer, Alan Tousignant, said at the Metropolitan BEE Conference and Expo last week.

Following the establishment of Agoa in 2000, discussions are currently under way, in Washington, to finalise Agoa III.

Tousignant pointed out that the first part of the Act, the ‘Trade Policy for Sub-Saharan Africa’, describes the findings of Congress, and a statement of policy by Congress. These sections deal with economic issues that feature in the development of BEE policy.

He argued that many of the findings of Congress could comfortably apply to the findings that are driving black economic empowerment in South Africa.

“For example, with just a small amount of editing, one could rewrite some of the Agoa findings in the context of BEE, as follows: ‘South Africa has experienced the strengthening of democracy, has increased its economic growth rate, has taken significant steps towards liberalising its economy, and made progress towards economic integration that can have positive benefits. Despite those gains, the per capita income in South Africa remains unequal, with a vastly lower average for historically disadvantaged persons. Trade and investment, as the South African experience has shown, can represent powerful tools both for economic development and for encouraging broader participation in a political process in which political freedom can flourish’,” he said.

Tousignant added that Agoa and BEE are related in that they are policies that have been arrived at through much reflection by governments and the private sector and represent efforts to improve the economic situation of Africans.

“As in the case of Agoa, BEE policy also focuses on the eradication of poverty, and strengthening and expanding the private sector in South Africa, especially enterprises owned by women and small businesses. The Agoa ‘forum’ is about cooperation between the US and Sub-Saharan Africa so that decision-makers from all spectra can talk to each other about their respective concerns and find a way forward.

“In the context of BEE, stakeholders, including government and the private sector, have met in their own forum to develop charters that are also aimed to reflect consensus on the way forward. One of the requirements listed in this Agoa section on the forum includes encouraging joint ventures between small and large businesses. BEE encourages joint ventures as well,” Tousignant commented.

US firms have an excellent record for implementing programmes in South Africa that advance the goals of BEE, he said, adding that they already have experience in dealing with laws and policies in the US that redress the economic legacy of racial discrimination.

“Thus, US firms understand the issues to be addressed through so-called ‘scorecards’. They are active in executing employment practices that include training, recruitment and promotion that, over time, will lead to a more balanced employment picture without decreasing efficiency.

“Although the phrase ‘black economic empowerment’ does not appear in the text of Agoa, there is much in the findings and policy of Agoa that addresses exactly the same issues that are driving BEE in the Republic of South Africa,” Tousignant said.

The South African government, he explained, has a legitimate interest in promoting greater equality of economic benefits. Agoa and BEE are both mechanisms aimed at achieving this result.

“In conclusion, one can see that the result of the African Growth and Opportunity Act has indeed been black economic empowerment through the jobs it has created for Africans exporting products to the US. Agoa is furthering the goals of BEE,” Tousignant concluded.