TRALAC - Trade Law Centre

US urges Africa to break trade barriers

Wednesday, 05 August 2009

Source: Xinhuanet (China)

US Secretary of State Hillary Clinton on Wednesday urged African countries to break down the trade barriers in order to spur business with each other.

Clinton told the three-day African Growth and Opportunity Act (AGOA) forum in Nairobi that Africa should "tear down trade barriers with each other".

"The nations of Africa trade least with each other. You must work to tear down trade barriers amongst yourselves. Creating a favorable investment climate also requires countries to translate politics into governing," she told over 2,000 delegates at the forum.

Clinton called on African countries to increase trade with each other to realize the enormous potential that exists within the continent in an address to the AGOA forum. "The biggest opportunity for African countries is to open up trade with each other," said Clinton.

She lauded the efforts to improve trade and investment in Africa while insisting on good governance.

Clinton said Africa was full of promise and potential, but increased corruption, poor leadership and the failure to invest in infrastructure made the continent lag behind in development.

The U.S. secretary of state noted that while the United States offered a market of 300 million people, African states could benefit more if trade within Africa was further improved.

The U.S. top diplomat who is on a seven-nation tour of African nations said the continent's economic progress will in future depend on good governance, which she said, was not all about holding elections.

"Progress will depend on good governance and adherence to the rule of law that is critical to create positive, predictable investment climates and inclusive economic growth. Democracy is not only about election," she said.

The United States opened up to imports from Africa under the AGOA initiative, aimed at improving the trade. Under the initiative, countries like Kenya have been able to export products, valued at 200 million U.S. dollars, but this has been declining.

Africa, Clinton said, has a population of more than 700 million people, which provides a potentially bigger market for African products, much more than the American market.

The AGOA has helped Africa achieve "demonstrable results". However, Clinton noted that the market access for Africa would amount to nothing if the African states were unable to fulfill the market demands.

She urged Africa to pursue product diversification so as to take advantage of market access across the world.

The U.S. diplomat gave the Rwandan example ,saying that it was the fastest growing economy in Africa with its health indicators improving and this was commendable.

Clinton said Washington will double foreign assistance to Africa by 2014, increase trade capacity, pursue public private partnerships and expand the number of bilateral treaties with African nations.

The secretary of state said the continued social, political and economic marginalization of African women has "left a void" that "undermines progress" in the continent, adding that given the opportunity, women can have "lasting influence" on their nations.

In his video address to the delegates, U.S. President Barack Obama said his country will help Africa harness its vast national resources and put in place strong institutions to promote democracy.

Obama pledged his administration's "full support" for Africa's development. "I see Africa as a fundamental part of our interconnected world," Obama, whose father was born in Kenya, told the eighth AGOA forum.

"And I pledge to you the full support and partnership of the United States," he said. Obama apologized for not being able to come to Kenya in person and said he had always enjoyed his visits to the country.

Speaking at the forum, Clinton called on the African companies to increase efficiency and produce competitive products if they have to break into the global trade ring.

"Market access alone is not sufficient ... We see product diversion, enhanced competitiveness and look for advanced ways to leverage economic power that comes up from trade, but Africa must open up trade with each other," she emphasized.

Clinton also called for enhanced capacity for humanity to adapt to the changing climate to maximize the productivity of the continent which is currently suffering the worst form of drought and famine.

"Investors will be attracted to states that do this. And they will not be attracted to states with failed or weak leadership, or crime and civil unrest, or corruption that taints every transaction and decision," Clinton said.

The U.S. secretary of state said America is not interested in being a patron of the African continent but a partner.

Kenyan Prime Minister Raila Odinga quickly countered the statement, saying that Africa's goods were still facing uphill barriers accessing the U.S. market. "African goods cannot compete with heavily subsidized goods," Odinga said.

Clinton said if African states could increase trade by only one percent, the continent could earn more money than it receives in foreign aid.

The United States plans to peg future aid to Africa on the quality of trade policies adopted by the recipient states, Clinton said.

Africa has to struggle to meet the demands of increasing trade to meet her own goals of improved trade. Clinton said African states have opportunities to export close to 7,000 different products to the U.S. market.

She said "there was real progress" imminent from African states, including the opportunities to improve cut-flower exports to the United States, which currently come from Tanzania, fruits, from Africa and other industrial goods, including leather products.

"We believe in Africa's promise. We would be partners with Africa's people. Progress in Africa requires partnership, not patronage. The progress depends on shared opportunity," she said.

She also urged African leaders to work on transparency. "It is not just about good governance, this is about good business,"

Clinton noted that African states were victims of stereotypes, which consigned the continent as underdeveloped and noted that some of these beliefs were far from the truth.

She regretted that some workers were still earning less than one dollar a day while the continent's women were constantly sinking deeper into poverty.

Clinton offered hope to Africa, saying apart from working to improve America's trade ties with Africa, the United States was also launching a new initiative to improve Africa's agricultural production.

Africa, she said, was still capable of making a huge leap in global trade, if only the right investments were put in improving roads, rail transport, and electricity supply.

She said the U.S. government was keen on investing in Africa's infrastructure improvements.