Diversification of African Exports under AGOA

Presentation by Florizelle LiserAssistant U.S. Trade Representative for Africa

at theLeon H. Sullivan Summit VIII

Arusha, TanzaniaJune 2, 2008

Trade & Development

The potential of trade to alleviate poverty far exceeds that of aid.

If Africa were to increase its share of global trade by just one percentage point – to 3% – it would generate additional export revenues of $70 billion – equal to 3 times the amount of current annual donor assistance.

AGOA: Catalyst for Trade

Objective: To increase and diversify African exports to the United States.

Eliminates tariffs on almost everything African countries export – over 6,000 products in all.

Special focus on non-traditional and value-added exports.

40 sub-Saharan African countries eligible

AGOA Non-Oil Exports

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2001 2002 2003 2004 2005 2006 2007

Non-Oil AGOA Trade

AGOA Results

Non-oil AGOA exports (incl. apparel, cars, citrus, fruits and nuts) have more than doubled since 2001; totaled $3.4 billon in 2007.

34 AGOA-eligible countries exported AGOA or GSP products to the U.S. in 2007.

Over 98% of exports from AGOA countries entered the U.S. duty-free in 2007.

Agriculture

AGOA agricultural exports totaled $271 million in 2007.

Includes wide range of farm products and processed foods, including: Ethiopian honey, citrus and wine from South Africa, jams from Swaziland, and hot sauces from Malawi.

U.S. SPS experts posted at the USAID trade hubs.

African Cut Flowers

Exports to U.S. growing, up 23% in 2007, to $7.7 million

Kenya, Ethiopia, Uganda, and South Africa main exporters to U.S.

Cars from South Africa

South African exports of cars and car parts have nearly quadrupled under AGOA, reaching almost $600 million in 2007.

Up 200% in first 3 months of 2008 as Mercedes joins BMW in producing for the U.S. from South Africa.

Tuna from Mauritius

In 2006, Mauritius began exports of processed tuna “loins” under AGOA

New multi-million dollar tuna processing plant employs 1,400 people

Tuna loins now the 3rd largest Mauritian export to the U.S. after apparel & cut diamonds

Apparel from Lesotho

Lesotho is the leading exporter of apparel under AGOA.

Has nearly tripled AGOA apparel exports since 2001, reaching $380 million in 2007.

Organic Cotton T-Shirts from Uganda

In February 2007, first shipment under AGOA of high-end 100% organic

T-shirts from Uganda

Example of opportunities with niche markets, organic products

Mudcloth Bags from Mali

Being sold in Hallmark stores – largest greeting card company in U.S.

One of largest single handcrafts purchases ever in Mali. Involves over 500 tailors and dyers.

Tanzania: From Cotton to Apparel

Sunflag factory in Arusha – one of few completely vertically integrated apparel factories in Africa

Transforms Tanzanian cotton into apparel for export

Trade Capacity Building

Market access not enough, African firms need help to take advantage of AGOA

U.S. TCB since 2001: $1.6 billion; $505m in FY2007

African Global Competitiveness Initiative

Regional Trade Hubs

In Sum . . .

AGOA provides extraordinary access to U.S. market

African countries have begun to diversify their exports and are seeing real benefits.

U.S. will continue to work with African producers and to provide trade capacity building assistance to help all realize AGOA’s full potential.