TRALAC - Trade Law Centre

Africa: AGOA lobby wants improved legislation

Tuesday, 18 December 2007

Source: East African Business Week (Kampala)

Governments and the civil society organisations from Africa have resolved to push for better trade legislation under the AGOA trade initiative in 2008.

At a meeting a fortnight ago, the AGOA Action Committee laid out strategies aimed at revitalizing the push for new African trade legislation. The committee includes government representatives, NGOs, local and international trade associations from sub-Sahara Africa.

The meeting, which was convened by Ms. Rosa Whitaker, was aimed at reviewing the congressional agenda for Africa in 2008 and to discuss opportunities to strengthen AGOA and advance improved legislation.

The committee discussed a range of ideas for a new Africa trade bill that would improve the existing African Growth Opportunity Act (AGOA).

The group feels that though there has been a lot of success under AGOA, with non-oil AGOA imports reaching $3.2 billion in 2006, there is need for continued advocacy for AGOA to continue benefiting Africa.

"AGOA needs continued advocacy to remain effective for Africa...this Committee needs to mobilise its various constituencies to contribute innovative ideas on how to improve AGOA and go beyond it, to address barriers to development in Africa," Whitaker said.

The AGOA Action Committee, which is co-chaired by former Congressman Mr. Jack Kemp and Rosa Whitaker, the president of the Whitaker Group, has worked over the years to advance AGOA in the US Congress, the private sector and investment community.

According an annual report for 2007 on US trade and investment policy towards sub Sahara Africa and implementation of AGOA, Kenya leads all the other East Africa countries in AGOA related exports with volumes worth some $273 million.

Tanzania's export to the US under AGOA stand at $3.7 million, Uganda at $2.5 million, Rwanda at $864,000 while Burundi which joined the AGOA fraternity only last year recorded nothing.

2007 figures generally show a drop in level of exports considering that Kenya exported products worth $353 million 2006. Uganda earned $32.8 million in 2003 from AGOA at the time of its peak.

Uganda's performance has since deteriorated by over 33%.

Despite the slump, the US continues to be a potentially significant market for the region especially in terms of future plans for export growth in various sectors. The AGOA market therefore offers an opportunity for expansion of East Africa's export base, provided the various trade constraints are addressed.

The AGOA Act, which was enacted in 2000, is the cornerstone of the US' trade and investment policy with sub-Saharan African countries.

Congress has amended the AGOA Act to improve and expand preferential access for beneficiary countries. AGOA rewards reforming countries with preferences that have been proven to help reduce barriers to trade, increase exports, create jobs, and expand business opportunities for African and U.S. entrepreneurs.

The countries export duty free to the US market products like textiles and apparels, petroleum products, chemicals, transportation equipment, minerals and metals, diamonds, fresh fruits, flowers and footwear, among others.

Thirty-eight of the 48 sub-Saharan African countries are eligible for AGOA, including Liberia, which was added to the list of eligible sub-Saharan African countries as of January 1, 2007.

Twenty-six of these 38 countries are eligible to receive AGOA's apparel benefits.

Since its inception in 2000, AGOA has helped increase US two-way trade with sub-Sahara Africa. Total imports by the US from Africa increased by 17% to $59.2 billion.

In 2006, over 98% of US imports from AGOA-eligible countries entered the United States duty-free. U.S. imports from AGOA countries totaled $44.2 billion in 2006, up 16% over 2005, largely due to oil.

Non-oil AGOA trade increased by 7% to $3.2 billion - rebounding from a decline of 16% in 2005 as several sub-sectors (footwear, fruits, nuts, prepared vegetables and cut flowers) experienced increases.