TRALAC - Trade Law Centre

Africa: Enhanced US market access critical

Friday, 24 July 2009

Source: America.gov (Washington, DC)

Enhanced market access to the United States - a key feature of the African Growth and Opportunity Act (AGOA) - remains a "critical component" for Africa's long-term economic growth and development, says longtime Africa trade facilitator and attorney Anthony Carroll.

Carroll, a member of the Corporate Council on Africa and vice president of Manchester Trade Ltd., a Washington-based consulting firm specializing in international trade and investment, July 21 discussed with America.gov the 8th Annual AGOA Forum, which will take place in Nairobi, Kenya, August 4-6.

"I think it was our thought at the outset of AGOA -- in its design -- that we needed some pulling of the railroad instead of just pushing it and that pulling could be enhanced market access. That remains, I think, a critical component to Africa's economic development and evolution, and that is to [help Africans] more effectively and competitively trade with the world and among themselves."

In the nine years since AGOA's enactment, Carroll said, it has been determined that "market access is not enough," but has to be coupled with technical assistance, infrastructure development and marketing sophistication for Africa to be able to take advantage of AGOA and other such trade agreements.

Looking back on African progress under AGOA, which was signed into U.S. law in its original form on May 18, 2000, Carroll said: "I think AGOA has made a significant contribution to Africa and its trading relations, not only with the United States but the world. Where I think we have been disappointed is that those benefits have not extended more broadly in terms of geographic distribution. There are some countries that remain not deeply affected by AGOA's opportunity, and in product categories ... the overwhelming concentration of trade is in the hydrocarbon and mineral sector, and that masks, I think, some of the failure to penetrate other areas that might provide greater employment and deeper economic benefit, such as agribusiness in particular."

Illustrating his point, Carroll said: "In agribusiness, there are certainly many areas [in which] Africa can be both competitive and more competitive. Those include specialty coffee, teas, specialty horticultural products, pisciculture [the breeding and raising of fish] and seafood products. They are all showing good growth."

Africa has been limited in other product categories in agriculture by two things, he said. "First of all, AGOA does not provide for benefits to certain agriculture products that Africa could be more competitive in such as sugar, tobacco and groundnuts. Secondly, certain foodstuffs are very dependent on certain infrastructure for transport to ports and export to markets such as the United States. They have been constrained by certain institutional and physical constraints in Africa," he explained.

Citing an example, he said onions are an excellent product in Northern Nigeria and Northern Ghana. "Onion varieties are world-class, but the absence of agricultural storage prevents these products from reaching the market in the best state. Also, road and sea transport are limited and therefore undermine the capacity of that crop itself to find export markets."

Looking ahead to the AGOA Forum, Carroll said the Cabinet-level U.S. government presence "is certainly an endorsement of this administration's embrace of Africa and underscores, I think, the importance of trade in our relationship with Africa."

The AGOA Forum will have three major components, he said: government-ministerial, private sector and civil society.

Carroll, whose firm is helping to coordinate the private sector and civil society components, said civil society will play an important role at the forum. "I think in this day and age, corporate social responsibility requires an engagement and dialogue with civil society. I think we have seen that in both the trade agreements and ministerial of the World Trade Organization and in business practices. I think there is an important role to outreach to civil society."

Continuing, he said: "Be mindful that civil society groups that tend to come to this [forum] are organizations that are very interested in enhancing their trade relationships with the United States. They are comprised of organizations that are gender-based [in the sense of being largely women], small credit-based that are agricultural producers, etc., and so they are looking for ways that AGOA can benefit them as well."

The Rwandan cooperative of largely women -- many of whom are survivors of that country's 1994 genocide -- who are producing baskets for sale in the large U.S. by retailer Macy's is a prime example of such a group, he said.

Carroll said it is most important that the annual AGOA forums offer the opportunity to hear from Africans. "The old idea of this AGOA Forum was to have a useful dialogue. I think the Africans have a better understanding often of what works and does not work in terms of market access, technical assistance, and I think we need to be ready to garner and digest and use that guidance from them in a manner that makes us constantly try to improve the model of AGOA," which has already been modified many times since its original inception.

"I think the Africans would, frankly, like to see some out-of-the-box [new and unique] thinking on how AGOA can be expanded and added to in many ways to try to continue to open this trade window with the United States," he said.