Secretary of State Hillary Clinton is among delegates from the United States expected to attend the African Growth and Opportunity Act, AGOA, forum in Zambia this week.
African Growth and Opportunity Act is designed to strengthen trade between the United States and sub-Saharan Africa. And Deputy Trade Representative Demetrios Marantis says AGOA works best when it improves conditions for individuals and countries in terms of economic growth and job creation.
“You can go in various countries in Africa, meet a woman who is HIV positive and has a job and is able to support her children because she is employed by a jam factory that exports jam from Swaziland to the U.S. or you can go to Liberia and meet a woman who would not have had a job otherwise, but for the fact that she works for a factory that’s exporting high-quality African organic cotton T-shirts to the U.S,” Marantis said.
But despite such progress, Marantis says more needs to be done. “There hasn’t been enough utilization of AGOA by African countries. We need to spend more time together thinking of how each individual AGOA beneficiary country can make better use of AGOA,” Marantis said.
But Stephen Hayes from the Corporate Council on Africa says it’s hard to take advantage of something when countries face inadequate conditions.
“Let’s be fair. How can they use it if they lack the infrastructure and the training of workforce, capacity building to really use it effectively? You’ve got to have road structures to get products to market. You’ve got to have manufacturing capabilities. It doesn’t just come overnight and to get that, you’ve got to have investors. You can’t just send textiles in trinkets and expect that AGOA works,” Hayes said.
AGOA has worked in South Africa, Hayes says, because the infrastructure is there. He also brought up another issue.
“Our second major beneficiary, somewhat jokingly, of AGOA was China. By moving their textile plants to Africa, then they didn’t have to worry about the tariffs,” Hayes said,.
Marantis says the U.S. market is open to 98 percent of Africa’s products, but to be eligible, countries must make progress in establishing the rule of law, protecting human rights and fighting corruption. The U.S. last year terminated trade benefits with Niger, Guinea and Madagascar because of lack of progress in those areas.
“I worked six years in this free trade zone. But now our garment factory has shut and the Chinese left. So we no longer have work there and we keep ourselves busy with household jobs,” said Ralalaoarisoa Mamy, a resident of Madagascar.
In addition to meeting the criteria of eligibility, there are lots of competitive challenges that make trading from Africa to the United States difficult. Marantis says the U.S. has created trade hubs to provide technical assistance to the African exporters.
“An exporter can learn this is how I market a product in the United States, this is the kind of packaging that could work so I can better sell my products and this is how I can assess how much capacities I need as an exporter in order to accommodate orders in the U.S,” Marantis said.
The AGOA Forum brings together over 600 participants, including senior U.S. and African officials, as well as U.S. and African members of the private sector and civil society.