International relations

'Agoa 2.0' to underpin US-Africa growth

14 August 2013

The United States will be looking to work with African experts and leaders on forging an improved "Agoa 2.0" ahead of the planned renewal of the African Growth and Opportunity Act, US Trade Representative Michael Froman told a two-day forum in Addis Ababa, Ethiopia on Monday.

Agoa, which enables 39 eligible sub-Saharan African countries to export most products duty-free to the United States, has seen total African exports to the US more than quadruple, and US exports to sub-Saharan Africa more than triple, since its inception in 2000.

Stressing that Agoa "remains at the heart of our strategy for increasing US-Africa trade and investment", Froman told the gathering of US and African government, business and civil society representatives that US President Barack Obama had made it clear that his administration wanted a "seamless" renewal of Agoa before the expiry of its current version in 2015.

At the same time, he said, Agoa needed to be reviewed and reshaped to take account of shifts in global trade relations and a changing, growing Africa.

"We need to lay the foundation for Agoa 2.0, informed by the lessons of the past 13 years, reflecting the changes in the global trading system, and driven by the ideas of today and tomorrow."

Agoa, Froman said, could act as a stepladder to Africa's further growth and development by helping the continent to fit into global value chains, increase value-added production, and avoid bad policies and common pitfalls, such as "rigid localization requirements that serve as barriers to trade and hinder the development of competitive industries".

Tariffs were only part of the story, Froman said, noting that there were a range of other factors that affected the ability of African firms and farms to provide goods in the quantity and quality and at a price that would make the continent competitive.

"We will want to talk about why the costs of getting goods to market are higher here than anywhere else in the world and what we can do, through trade facilitation, customs harmonization, infrastructure development and other measures to address that."

South African Deputy Trade and Industry Minister Elizabeth Thabethe, also addressing this week's forum, said Agoa should be developed into a programme that supported African integration more directly.

"This is where we need to be innovative in defining mechanisms that support Africa's integration," Thabethe said, adding that larger, more integrated African markets would underpin growth and development in Africa, which in turn would encourage growth in US trade and investment to Africa.

Froman said that the US secretaries of commerce, energy and treasury were expected to travel to Africa in the coming months to discuss the expansion and deepening of US-African economic ties.

"And when the President convenes African leaders in Washington in 2014, I look forward to reporting back on our plans for Agoa renewal and, beyond that, a clear vision of the future of US-African economic relations."

SAinfo reporter


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