TRALAC - Trade Law Centre

AGOA Sparks Export Gains

Friday, 24 September 2004

Source: United States Department of State (Washington, DC)

Africa's time has come and this will be Africa's century for economic growth and development, Rosa Whitaker, the former U.S. assistant trade representative for Africa and current president and chief executive officer of the Whitaker Group confidently predicted September 17.

Speaking to hundreds of students attending the Teach Africa Youth Forum at the State Department, Whitaker pointed to the many countries in Asia that once were "so incredibly poor" but now are "experiencing a kind of prosperity that we in America take for granted." They have gone from desperate poverty to prosperous members of the international trade community in just a few decades, she said.

In her estimation, the 21st century will be the time that African countries will transform their economies from poor to prosperous by strengthening their trade links with the international economy -- just as South Korea and Taiwan did not so long ago.

"When I was a child," she told the students and Africanists in attendance, "these countries [South Korea, Taiwan, Singapore] were just very, very poor. In fact, some of them were poorer than [some countries now are in] Africa."

Although analysts are still debating the variables that contributed to the dramatic economic take-offs of these Asian nations, she said, most agree that trade was a major factor that contributed greatly to their overall economic growth and development and made them vibrant and contributing members of the world economy.

Citing South Korea to illustrate her point, Whitaker said the key ingredients to that country's success have been: the production of new products, the exportation of these products abroad at a competitive price, and the subsequent lure of foreign capital to invest in South Korean markets.

The former assistant U.S. trade representative for Africa explained that the recent reauthorization of the African Growth and Opportunity Act legislation (AGOA) has given Africa the advantages needed to build-up its economies and emulate the success stories of its Asian counterparts, which were known as the "Asian Tigers" -- Hong Kong, Korea, Indonesia, Malaysia, the Philippines, Singapore, Taiwan and Thailand.

"We decided that if Africa was to have a real shot at what Malaysia and all the Asian countries developed, we were going to have to give Africa some preferential advantages and treatment. And that is what we did in the African Growth and Opportunity Act," she said.

South Africa, Whitaker told her audience, already has begun to follow the examples of its Asian counterparts by taking advantage of the tariff-free entry of its products into the U.S. market and exporting BMWs and Mercedes Benz automobiles to the United States at a very competitive price. Africa's trade advantages under AGOA, Whitaker said, are bringing clothing retailers like The GAP and The Limited to the continent to start producing their shirts in Africa instead of China.

Whitaker held up two Ann Taylor brand shirts produced in Lesotho to demonstrate how AGOA was changing the face of trade in and with Africa. Before clothing companies like Ann Taylor began investing there, Lesotho was considered one of the poorest countries in the world, she said.

Gold mining was its only major industry and companies employed mostly men, leaving women to scrounge for a living off the land. "Now," Whitaker explained, "there are hundreds of factories in Lesotho producing these tops for the U.S. market," with a high percentage of women now employed in the industry.

William Jackson, director for African affairs at the U.S. Office of the Trade Representative (USTR), stressed that the U.S. government is fully committed to promoting the expansion of African trade and the continent's continued economic growth. In past years, he said, the United States had contributed billions of dollars in assistance to help alleviate poverty in Africa, sometimes achieving only marginal results.

Now, he explained, using the successes of Taiwan and South Korea as a model, the United States government is working to create new jobs in Africa, bring in investment, and help these countries export more of their commodities abroad. This is what African leaders are requesting from the United States, he told students. "They did not want handouts, but a hand in building up their economy," he added.

The Teach Africa Youth Forum, sponsored by the Africa Society of the National Summit on Africa and the World Affairs Council of Washington as part of their Teach Africa program, aims to break down stereotypes and teach American students why the continent is important to the United States.