TRALAC - Trade Law Centre

Report: McCain may be better for Africa

Tuesday, 04 November 2008

Source: The Times (South Africa)

US trade policy with Africa has been a peripheral issue in this presidential campaign, making it unclear if South Africans should be rooting for Barack Obama or John McCain as Americans go to the polls today.

The US has grown into this country’s largest customer during George Bush’s presidency, thanks to the African Growth and Opportunity Act (Agoa) — meaning the outcome of this election may have huge repercussions for our economy.

Imports from SA have cracked $9-billion a year, according to US government statistics. The Department of Trade and Industry’s website said SA exports to the US totalled over R15-billion for the year to March.

The Agoa policy of encouraging economic growth in Africa by opening the world’s largest market to imports was conceived by Bill Clinton’s Democrat administration, but enacted and implemented by the Bush government.

The US now buys 12.1 percent of South Africa’s exports, followed by Germany with 9.4 percent and Japan with 9.1 percent, according to Department of Trade and Industry data.

Before Agoa, Japan was by far SA’s biggest customer, buying coal for its power stations. The US, by exempting over 98 percent of SA products from import duties, has helped SA move up the value chain from mining to manufacturing.

The US consul-general in Johannesburg, Andrew Passen, along with US Commercial Service senior officer Craig Allen, reassured exporters during a panel debate last week that Agoa will stay irrespective of who the next US president is.

This is despite Agoa appearing to conflict with Obama’s US job protectionism platform.

According to www.agoa.info, McCain’s campaign team promised his administration would “expand and improve” Agoa, along with other Bush African projects such as the Millennium Challenge Corporation and the President’s Emergency Plan for Aids Relief.

“Contrary to the ideas of some Obama romanticists, having a Kenyan father does not automatically impart an understanding of Kenya, let alone the whole of the African continent,” the website said.

The recent economic crisis, which has hit the US economy particularly hard, will also mean that it is in both candidates’ interest to focus on domestic policy. When American families are losing their homes and jobs, “compassion” tends to fall by the wayside.