TRALAC - Trade Law Centre

Africa seeks permanent AGOA deal

Tuesday, 04 August 2009

Source: Capital FM

The African Growth and Opportunity Act (AGOA) should be amended to make it a permanent trade program if it is to achieve the intended purpose of strengthening trade between Sub-Saharan Africa and the US, a trade expert has proposed.

African Union (AU) Deputy Chairperson Erastus Mwencha, who is a former Secretary General of COMESA, said on Tuesday that the Act should be investment-friendly and predictable to encourage investors to take advantage of the opportunities it presents.

“This element is lacking in the Act and that is an area that we could try to reinforce in AGOA. Many investors will always be hesitant to embark on AGOA programs especially when they don’t know that they will be eligible,” he said.

This, he further stressed, was particularly true in situations where - if there’s a breakdown in dialogue between the US and a member state - the business community would bear the brunt of such a standoff.

The Act, which is part of the US legislation and meant to liberalise market access to the country, initially covered the eight-year period from October 2000 to September 2008, but amendments signed into law by President George W. Bush in July 2004 further extended it to 2015.

“The US government can also include in the legislation some investment provisions that would encourage US investors to look at Africa,” he added while pointing out this would help dispel the image of Africa as a politically instable, poor and conflict laden and disease stricken continent.

At the official opening of the 8th AGOA forum, the Chairperson proposed the linking of AGOA to other global trade initiatives such as the World Trade Organisation, G20 and G8 forums which would go a long way in integrating Africa into the global economy.

Mr Mwencha also urged the United States to assist Africa to diversify its export products which would in turn enable the continent to further penetrate the American market.

Efforts to diversify and add value to Africa’s eligible countries’ products have borne fruit with the 2008 figures showing US imports under AGOA were $66.3 billion, which was approximately 30 percent higher than in 2007.

During the conference, Prime Minister Raila Odinga said it was time African states came up with new ways to tackle the challenges facing them particularly when the world is grappling with the effects of an economic slump.

Increased trade, he observed is the only way out of the continent’s problems and called on leaders to exploit Washington’s a commitment to support Africa’s efforts to do much better.

“Never before has an American President and the Secretary of State visited our continent so early in their tenures. Let me therefore take this opportunity to thank Mrs Hillary Rodham Clinton for coming to Kenya for this crucial AGOA forum to exchange views with all of us and to take the pulse of the continent’s new determination to do better,” he said in reference to the expected arrival of the US Secretary of State in the country.