TRALAC - Trade Law Centre

'Infrastructure hampering US trade with Africa'

Monday, 14 April 2008

Source: Reuters Africa

Africa's lack of transport infrastructure is denying the world's poorest continent the full economic benefits of a preferential trade agreement with the United States, a top U.S. trade official said on Monday.

Passed in 2000 and expected to end in 2015, the African Growth and Opportunity Act (AGOA) is designed to give 39 sub-Saharan African countries duty-free access on more than 1,500 selected items in the $14 trillion U.S. market.

But decades of underdevelopment and investment in Africa's road, shipping and aviation sectors is impeding the continent's competitiveness and hampering a diverse flow of trade with its largest single market. "Transportation has a direct effect on our efforts to strengthen the US-African trade relationship," Florizelle Liser, assistant U.S Trade Representative for Africa told delegates attending the first U.S.-African transport and trade forum in Cape Town.

"One challenge in particular that all African products seem to have in common are higher transportation costs to the United States than competing products from other countries and regions," Liser said.

She said another challenge was the scarce availability and frequency of air and maritime services, as well as inadequate rail and road links which constrained products from farms to markets and ports.

Using the example of Ghana exporting cotton socks to the U.S. to illustrate her point, Liser said early successes were being undone by increased transit times.

"Where it used to take 21 days to ship from west African ports to the U.S. east coast, producers of apparel and other products are currently facing 38 to 46 days for shipping," said Liser.

Critics of the AGOA law argue that Washington's subsidies to American farmers keep African growers of agricultural products for export to the U.S. mired in poverty, outweighing any real benefits the trade initiative offers. (Reporting by Wendell Roelf)