TRALAC - Trade Law Centre

AGOA creates more than 300,000 jobs in Africa

Sunday, 20 June 2010

Source: All Voices

The African Growth and Opportunity Act (AGOA) is said to be creating more than 300,000 jobs in Africa and also brings in about $300 billion in export earnings and nearly $30 billion in non-oil exports to Africa at a minimal cost to United State (US) taxpayers.

The Chair of the AGOA Action Committee and President, the Whitaker Group, the premier United State (US’s) trade consultancy facilitating trade between the US and Africa, Ms. Rosa Whitaker, who stated this said that AGOA has been very successful in the past decade in its operations.

Call for Continuation of AGOA’s Exclusive Duty

Speaking at an AGOA Leaders Forum in Washington, DC, hosted by a coalition of AGOA’s US supporters, and attended by African Ministers of Finance and Ambassadors, as well as other AGOA stakeholders and business and policy leaders, she noted that the new policy proposal, entitled Enterprise for Development: A New Policy Approach Toward Africa, calls for the continuation of AGOA’s exclusive duty and quota-free access to the US market for African goods.

She also said that the new policy will strengthen and grow indigenous enterprises in Africa and stipulate measures that will support job creation, export promotion and prosperity in both the US and Africa.

She stated: “Over the past decade, we have learned that AGOA should be just one tool – albeit a critical one - in America’s arsenal to support Africa as it grows its own prosperity.”

Whitaker noted that it has been discovered that what Africa needs from the US is a concerted, multifaceted trade and investment policy that brings together the trade preferences of AGOA with trade capacity building, strategic development assistance and incentives to spur greater foreign direct investment by U.S. businesses in Africa.

Why AGOA Benefits Shouldn’t be Extended to US market

She warned that if the current proposals in the US Congress to extend AGOA benefits, duty and quota-free access to the US market, to all Least Developed Countries (LDCs), including hyper-competitive Asian nations, sails through, it would have catastrophic consequences for Africa, particularly to the nascent apparel exporting sector.

In his own contribution at the Forum the Minister of Finance and Development Planning for the Kingdom of Lesotho, Honorable Mr. Timothy Thahane, said that the government can’t develop a viable agricultural sector with only women and old people.

“In 2000, the small apparel sector employed only 10,000 women. Between that time and last year when the financial crisis hit, over 50,000 women had found work in the industry. The employment provided by AGOA has made a difference in the lives of Lesotho’s women and children,” he added.

Thahane pointed out that Africans are not saying that the US Congress should not grant special trade preferences to LDCs in Asia, but that legislators should provide preferences that would help struggling sectors in those countries, rather than benefit sectors that are already successful. “Preferences for Bangladesh and Cambodia should not be at the expense of sub-Saharan Africa,” .

AGOA Described as Very Successful

Also speaking, the renowned development economist and the Director for the Study of African Economics at Oxford University, Dr. Paul Collier said that AGOA is so successful that it should be replicated by the European Union (EU) and Japan.

He stated: “There is a real opportunity for AGOA to go global. If we had a Super AGOA that included Europe and Japan, it would make life so much easier for Africa. The trade preferences offered by AGOA is like the “pump priming mechanisms” that are helping African nations to break into manufacturing and the global market.”

Collier noted that it’s a well known fact that if it’s given to one huge manufacturer, like Bangladesh, it would cut out all the little manufacturers. These big manufacturers must be kept out because they are not entrants into manufacturing. Bangladesh doesn’t need privileged access. There are many ways to help Bangladesh because it is still poor, but giving preferential trade access to its apparel sector is not the way to do it.