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You are here: Home/News/Article/Africa-America Institute on AGOA: ‘Allowing the Africa Rising Story to Happen’

Africa-America Institute on AGOA: ‘Allowing the Africa Rising Story to Happen’

Africa-America Institute on AGOA: ‘Allowing the Africa Rising Story to Happen’
Published date:
Saturday, 14 June 2014
Makula Dunbar

The Africa-America Institute (AAI) hosted its first Conversations on Africa panel titled “AGOA 2015: Positioning Renewal to Ensure Better Human Capacity Training.” AFKInsider attended the Capital Hill event, which aimed to pinpoint the necessity of an extension, while examining what has worked and what hasn’t.

Panel moderator, Kamran Khan — VP of the Department of Compact Operations and the Millennium Challenge Corporation — summarized the purpose of extending AGOA best. Honoring continued trade from the continent would be “allowing the Africa rising story to happen,” he said.

Though one of the panelists H.E. Liberata Mulamula, Ambassador of Tanzania to the United States, said that it’s time to revert the focus of the Africa Growth Opportunity Act (AGOA) from challenges — the discussion largely targeted hurdles and solutions to the legislation’s fate.

Established in 2000, the extension of AGOA has gone through several congressional perusals and is now set to expire in September of 2015. The ultimate function of AGOA is to allow incentives and duty-free trade to the U.S., which will encourage the expansion of African markets.

“AGOA really was enacted on the principle that trade is crucial for growth — a strong engine for economic growth. It’s been true all around the rest of the world and it is indeed true for Africa as well,” The Honorable Florizelle Liser, Assistant U.S. Trade Representative for Africa at the Office of the U.S. Trade Representative said.

“Under AGOA there have been tens of thousands of jobs that have been created. I have been to those factories myself. Not just apparel, not just textiles and not just footwear.”

Is AGOA a disappointment?

Still there remains an alarming issue. An International Trade Administration document revealed that last year, total trade between the U.S. and Africa declined 12 percent compared to 2012.

While under AGOA more than 97.5 percent of goods from Africa can be exported duty-free to the U.S., America only receives a meager percentage of that, Liser said.

For this reason, Stephen Hayes, President and CEO of the Corporate Council on Africa said that overall AGOA has been a disappointment. Since the private sector in the U.S. hasn’t largely gained from African trade, he believes that the U.S. congress is unconvinced of its greater potential.

“What concerns me is that the American private sector does not really benefit from AGOA. We have a growing problem in this country — the gap between the rich and poor, which is enormous,” he said.

“[For] the shrinking of the middle class, the lowering on manufacturing, we’ve got to find creative ways to make those changes. Working with African can change the American economy,” he admitted.

According to Hayes, the strength of AGOA would shine through better implemented trainings, vocational schools and in-depth examination of regional markets. It is not that the U.S. has failed to aid the progression of the act. Instead, growth of African markets is being hindered by a lack of capacity.

Why capacity matters more than market access

“For the first time at these AGOA forums it’s now addressing the issue of human capacity. It’s not about the market access. All has been happening for those countries that have the capacity,” H.E. Mulamula added.

“If you compare Tanzania and South Africa — we have one product, we have one factory and that’s what we’re bringing here. South Africa has 200 products that are coming into this market.”

Liser and Gregory Simpkins, Staff Director of the U.S. House Subcommittee on Africa, Global Health, Global Human Rights and International Organizations believe that strides in capacity can be attained by lessening the load on African producers.

Large U.S. retailers who order huge quantities of products from Africa are sometimes unaware of the strain placed on workers in some countries.

“We often talk about AGOA and the successes and failures. The blame is for these failures is often put on Africans when it’s mutual. Manufacturers in Africa are not able to keep up with the people who buy here,” Simpkins said.

“Why in the world are we concentrating on taking these little countries and matching their producers with Walmart or JCPenny? Some of the producers can do it, but for the most part, that’s not going to happen.”

Methods for success

Aggregating small and independent retailers with small-scale producers, he said, could be an effective alternative.

Another panelist, Witney Schneidman, Senior International Advisor for Africa, Covington & Burling LLP, said that once African leaders meet with the Obama administration at the U.S.-Africa Leaders Summit later this year in August, ministries need to outline new AGOA strategies.

“Not only will each country develop an AGOA strategy, but the month or two after the summit, they’ll be posted on ministry trade websites and so we can literally see what’s going on,” he said.

In addition, political coups should not determine the eligibility of a country’s participation in AGOA, Schneidman offered.

When you’re in you’re in

“When there’s a coup, you’re out of AGOA. I think we need to take a good hard look at that. Madagascar’s a perfect example,” he continued.

“They’ve been involved in this political crisis for four years. As a result, they’ve not been in AGOA, but who’s the big loser in that? The big loser is the 2,000 women who’ve been working in those factories and those plants. Their jobs are gone and America’s not investing.”

The concept of committing to the extension of AGOA circles back to congress Stephen Lamar, executive VP of American Apparel & Footwear Association said.

Although the deadline is next fall, a conducive congressional calendar and grouping of AGOA supporters has to be in motion now in order to impact a favorable decision. Long-term extensions and reviewing the benefits of AGOA, Lamar believes, must be taken into consideration long before setbacks become make-or-break issues.


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