The East African Tribune

Experts Call for Expanded U.S.-Africa Agricultural Trade

July 27th, 2008

By Charles W. Corey
Staff Writer

Washington — There is no better time than now — in the face of record-high food and commodity prices — to expand the African Growth and Opportunity Act (AGOA) to further open and enhance U.S.–Africa agricultural trade.

Three specialists on AGOA, a preferential tariff program originally passed by Congress in 2000, made that point July 14 at the AGOA Civil Society Forum held on Capitol Hill in Washington. The annual three-day forum runs July 14-16. The theme this year is “Mobilizing Private Investment for Trade and Growth.”

The three specialists are: Daniel Karanja, a senior fellow at the Partnership to Cut Hunger and Poverty in Africa; Jayme White, legislative director in the office of Washington state Representative Jim McDermott; and Likando Mukumbuta, the chief executive officer of Zambia Agribusiness Technical Assistance Centre (ZATAC Ltd.) in Zambia.

Karanja argued for the agricultural sector in Africa to be more integrated into AGOA.

“If the purpose is to cut hunger and poverty in Africa and to promote economic growth and trade, then AGOA definitely needs to consider how its benefits can reach the rural poor, the small holder who are the foundation of African economies,” Karanja said.

Heralding the trade legislation, Karanja said AGOA has resulted in tremendous growth of U.S.-Africa trade, which now exceeds some $80 billion annually.

“Our concern,” he said, is that “only a few countries have benefited from AGOA and only a few sectors” of their economies have benefited, with oil and gas exports in the lead at about 90 percent of total U.S.-Africa trade, followed by textiles at less than 5 percent and agriculture less than 1 percent in 2005.

“This is a big concern for those people who understand the genesis of AGOA. This bill was introduced to promote trade and economic growth in Africa, but as many … know, agriculture is the major sector of most of the economies in Africa and accounts for the largest share of gross domestic product, largest share of export earnings for African economies, largest share of population with three out of every four Africans living in rural areas and depending entirely on agriculture, and the largest share of employment.”

With ever-higher prices for food and fuel, the issue of broadening AGOA is of “the utmost importance,” he said.

Reinforcing that point, Jayme White, who has worked on the AGOA legislation since its inception on Capitol Hill, said AGOA is a trade program that spells out the U.S. tariff regime for goods imported from sub-Saharan Africa.

Speaking of the original AGOA legislation or AGOA I, which was passed in 2000, he said, “There were a lot of compromises that were made, but in effect, AGOA eliminated tariffs on over 95 percent of imports that come from sub-Saharan Africa,” including some on apparel. “Where we fell short was on full tariff elimination on what we call sensitive agricultural goods — sugar, corn, peanuts, some value-added agricultural products like chocolate and some syrups.”

Since that time, he said, AGOA II in 2002 and AGOA IV in 2006 mainly focused on apparel. AGOA III, he said, did address the need for trade-capacity building in Africa and stipulated that 20 specialists be put in sub-Saharan Africa to help African farmers comply with U.S. laws on importing agricultural goods into the U.S. market.

“We have seen some improvements as a result,” White said, but “we have fallen far short on agriculture because of our focus on apparel.”

He cautioned against making the assumption that only the oil and gas sector is benefiting.  The upside of AGOA, he said, is that “we are seeing some diversification” and an “explosion of apparel imports” under AGOA “which has created tens of thousands of jobs in countries like Lesotho, Swaziland, Kenya, Madagascar and Mauritius.

“That is terrific,” he said, while acknowledging that “the downside is that most of the benefits have been in southern Africa in the apparel sector.”

Overall, “we have not seen the explosion of imports and trade and investment that I think the proponents of AGOA would have first liked to see,” White said.

What has been learned over the years, he said, is the importance of both trade and aid and the transfer of agricultural skills and technology.

What is still needed, he said, is coordinated, long-term trade-capacity building, especially as much of AGOA is slated to expire in 2015.  Also needed are public- and private -sector investment in Africa and the coverage under AGOA of all African agricultural products.

For all of this to happen, he said, those who work with Africa must “speak with one voice” on Capitol Hill to lobby Congress. “AGOA would not have happened without the African diplomatic corps because they were organized behind the bill and they asked for it,” and that same energy is needed today, he said.

Likando Mukumbuta — who has more than 16 years of agricultural development experience in Africa — reiterated that Africa needs both trade and aid, but what is more important is the active engagement and participation of U.S. business.

“The transactions and exports that are needed are not going to happen in meetings such as this one,” he told his audience. “They are not going to happen at conferences and in legislation. It is actually businesses being able to actually transact, negotiate and to export to each other with facilitative legislation” that will create meaningful economic growth and development.

He praised the United States for doing so much in Zambia to help streamline the Zambian economy and stimulate private-sector growth and development.  He said that while the United States has helped improve the investment environment in Africa, it has not always been a participant in the actual investment.

“When it comes to taking advantage of that very environment that has been created,” he said, “you tend to find that it is other players who are there who take advantage.”  He called for more American investment, and said he would like to see Americans “at the table when the deals are being done.”

The AGOA Civil Society Forum began earlier in the day with digital video conferences linking American and African civil society groups in the United States with their counterparts in Kenya, Malawi, Tanzania, Cameron, Mauritania and Togo.

The forum also features a ministerial session, which will be addressed by Secretary of State Condoleezza Rice, and a private-sector forum. The event alternates its venue annually between the United States and Africa.

(This is a product of the Bureau of International Information Programs, U.S. Department of State.  Web site: http://www.america.gov)

Entry Filed under: Agriculture