TRALAC - Trade Law Centre

African trade ministers want US to extend AGOA

Tuesday, 14 June 2011

Source: New Vision (Uganda)

African countries want the African Growth and Opportunity Act (AGOA) and the Third Country Fabric extended beyond 2015 and 2012 respectively to 2025 on a long-term and sustainable basis.

African ministers from AGOA eligible countries, contend that the extension will create predictability for investors to devote to the region since the future of AGOA and the Third Country fabric provision had tended to make AGOA not investment friendly.

Third Country Fabric Provision allows least-developed African nations like Uganda to make apparel using fabric from other nations to enable them develop their own industries.

AGOA, initially expected to end in 2015, is a tariff preference trade agreement covering 37 countries in sub-Saharan Africa. It was signed in 2000 to provide African countries with the most liberal access to the US.

“AGOA should not just be about exports, but about attracting American investors into Africa to partner with businesspeople so as to make AGOA a reality,” Susan Muhwezi, the Uganda’s special presidential assistant on AGOA and trade, said at the just-concluded AGOA Forum 2011 in Lusaka, Zambia.

Muhwezi, who led the Ugandan delegation, said apart from the extension, the US needs to help African countries by rendering infrastructure development and technical capacity, which are some of the barriers to the success of AGOA.

In a communiqué, the African Ministerial Consultative Group recommended the relaxation of restrictive rules of origin in order to promote diversification of exports to the US. Addressing delegates at Lusaka’s Mulungushi International Conference Centre, the US Secretary of State, Hillary Clinton, said in the past decade, Africa’s exports to the US had quadrupled to $4b without counting oil.

Clinton said although Africa still faces challenges in many areas, productivity had been rising with consumer spending in the region projected by almost $600m, and GDP by $1 trillion in less than a decade.

“All of us who care about the success of AGOA have hard choices to make.

“As we look to renew this trade agreement; and let me say clearly that the Obama Administration will work with the Congress on a seamless renewal of AGOA beyond 2015,” Clinton said to a big applause.

“We must decide whether we are willing to do what is necessary to make the most of its benefits. We can either move ahead, or risk failing to live up to the hopes we all shared 11 years ago.”

Clinton said sub-Saharan Africa was now more ripe for massive investments and trade but challenged the countries to heighten moves towards regional integration to maximise the economic benefits.

Zambian President, Rupiah Banda, stressed the need for regional economic blocs like the COMESA, SADC and the EAC to work together in collaboration with the African Union to enhance the integration agenda. He said since its inception, AGOA had created hundreds of jobs in sub-Saharan Africa.

“It is on record that more than 300,000 jobs have been created in Africa with $300b in export earnings and nearly $30b in non-oil exports to Africa at minimal cost to the US taxpayers,” he said.




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