MAKING  THE  US-­‐AFRICA  PARTNERSHIP  A  REALITY:  WHICH  WAY  FORWARD  

FOR  AGOA?    

 

 

 

Written  by  Ben  Kangwa  

 

 

 

MAKING  THE  US-­‐AFRICA  PARTNERSHIP  A  REALITY:  WHICH  WAY  FORWARD  FOR  AGOA?  

Written  by  Ben  Kangwa  

In  2010,  Zambia  took  over  the  Chairmanship  of  the  African  Growth  Opportunity  Act  (AGOA)  and  the  Zambian  Ambassador  to  the  United  States,  Mrs.  Sheila  Siwela  was  appointed  Co-­‐Chair  of  the  Economic  

Development  Committee  of  the  African  Diplomatic  Corps  in  Washington  DC,  teaming  up  with  the  Ambassador  of  the  Kingdom  of  Lesotho,  Amb  David  Rantekoa  as  the  other  Co-­‐Chair.  

The    major    responsibilities    of  the  Co-­‐Chairs  were  to  engage  the  US  government  and  Congress  on  the  improvement  and  review  of  AGOA  trade  preferences  on  behalf  of  and  for  the  benefit  of  all  AGOA  eligible  

countries.  

Initially,  AGOA  was  set  to  expire  in  2008.  In  2004,  the  United  States  Congress  passed  the  AGOA  Acceleration  Act  which  extended  AGOA  to  2015.  

There  are  currently  ongoing  consultations  in  the  US  Congress  and  among  the  African  Diplomatic  Corps  in  Washington  DC  regarding  reforms  to  trade  preferences  and  as  to  what  happens  to  AGOA  after  2015.  

In  June  2011,  Zambia  successfully  hosted  the  fifth  AGOA  conference    after  Kenya,  Ghana,  Senegal  and  

Mauritius.  

The  recommendations  that  emerged  from  that  meeting  and  specifically  during  the  African  Ministerial  Consultative  group  were,  one,  the  need  for  AGOA  eligible  countries  to  speak  with  one  voice  in  urging  the  US  to  extend  AGOA  beyond  2015.  

Two,  to  urge  the  US  for  the  Third  Country  Fabric  provision  to  run  concurrently  with  AGOA  after  it  expires  

in  2012.  

Three,  a  call  to  the  US  to  priotise  capacity  building  especially  in  infrastructure  development,  sanitary  and  physio-­‐sanitary  laboratories  and  private  sector  support  to  enable  African  countries  take  advantage  of  

the  market  access  AGOA  offers  

Four,  to  urge  the  US  to  consider  relaxing  its  restrictive  rules  of  origin  in  order  to  promote  diversification  of  exports  into  the  US,  especially  for  agricultural  products  and  lastly  request  US  support  towards  Africa’s  regional  integration  efforts  through  development  of  value  chains.  

To  push  this  agenda  forward,  the  African  Partnership  For  Economic  Growth  Caucus  (APEG)  co-­‐Chaired  by  

the  Honorable  Bobby  L.  Rush,  the  Ranking  Member  of  the  Energy  and  Power  House  Sub-­‐Committee  of  the  Energy  and  Commerce  Committee  and  the  Honorable  Donald  M  Payne,  the  Ranking  Member  of  House  Sub-­‐Committee  on  Africa,  Global  Health  and  Human  Rights,  held  the  first  ever  Quarterly  Meeting  

with  the  African  Diplomatic  Corps  to  launch  a  Working  Group  on  Trade  and  Investment  In  Africa.  The  theme  was  “Making  the  US-­‐Africa  Partnership  a  Reality.”  

APEG  was  created  by  Congressmen  Bobby  Rush  and  Donald  Payne  to  foster  stronger  commercial  and  economic  ties  between  the  US  private  sector  and  Africa.  The  primary  objective  of  APEG  is  to  promote  

bilateral  private  sector  development  that  will  increase  export,  investment  and  economic  growth  for  large  and  small  US  and  African  firms.  

It  is  dedicated  to  educating  Members  of  Congress  on  issues  affecting  the  commercial  and  economic  

relations  between  the  US  and  African  countries.  

This  particular  meeting    was  chaired  byDirector  of  the  Wilson  Center’s  Africa  Program  and  Project  Steve  McDonald    while  former  Ambassador,  former  Assistant  US  Trade  Representative  for  Africa  who  is  also  co-­‐Chair  of  the  AGOA  Action  Coalition,  Rosa  Whitaker  of  the  Whitaker  Group  served  as  moderator.  

Others  who  participated    included  South  Africa  Ambassador  to  the  United  States  of  America,  Ebrahim    

Rassol,  the  Ambassador  of  the  Republic  of  Mauritius,  Somduth  Soborum,  Cote  D’Ivoire  Ambassador,  Daouda  Diabate.  

From  the  American  Private  Sector  was  Ms  Karen  Tandy  from  Motorola  Solutions  (MS),  Del  Renigar  from  General  Electric  (GE)  and  Wanda  Felton  from  Export-­‐Import  Bank  (EIB)  of  America.  

During  the  discussion  overview,  most  participants  agreed  that  AGOA  had  produced  impressive  results  in  

2010,  but  however,  as  AGOA  comes  up  for  renewal  in  2012,  the  discussion  had  shifted  towards  an  analysis  of  how  a  “languishing”  American  business  community  could  better  leverage  the  engines  of  trade  and  investment  in  Africa  in  order  to  create  jobs  at  home  and  benefit  American  economic  interests.  

It  was  also  observed  that  AGOA  eligible  countries  needed  to  speak  in  a  uniform  voice  to  urge  the  US  to  

expand  the  legislation,  to  prioritize  infrastructure  and  to  focus  on  regional  integration.  

Ambassador  Sheila  Siwela  in  her  remarks,  stated  that  “the  meeting  signaled  the  beginning  of  a  historical  true  partnership  between  Africa  and  the  USA.”  She  paid  gratitude  towards  the  US  for  the  favourable  responses  and  commitment  from  Secretary  of  State,  Hillary  Clinton  and  the  US  Trade  Representative  

Ron  Kirk  during  the  AGOA  Forum  where  they  pledged  support  towards  the  extension  of  AGOA  preferences  and  the  Third  Country  Fabric  provision  beyond  their  current  life  spans.  

She  emphasized  the  urgent  need  for  the  extensions  in  order  to  sustain  investor  confidence  which  she  

said  “is  prone  to  falter  as  the  expiration  date  nears.”  More  importantly,  she  concluded  by  noting  “the  need  to  ensure  that  thousands  of  jobs  that  directly  or  indirectly  depend  on  these  provisions  were  not  lost.”  

Meanwhile    most    participants  praised  AGOA  for  providing  the  platform  for  high-­‐level  consultations  and  

increased  trade  competitiveness.  The  benefits  of  AGOA,  they  said,  could  not  be  overemphasized  with  respect  to  its  effect  on  the  textile  industry  in  Africa.  

Ambassador  Somduth  Soborum  of  the  Republic  of  Mauritius  charged  that  AGOA  should  be  used  for  “the  development  of  value  chains  which  will  culminate  in  regional  integration.”  He  said  it  was  clear  that  the  

priority  going  forward  would  be  the  Bill’s  extension  as  well  as  the  extension  of  the  Third  Country  Fabric  provision.  

Ambassador  Daouda  Diabate  of  Cote  D’Ivoire  highlighted  his  country’s  desire  to  join  the  ranks  of  AGOA.  Congressman  Charlie  Rangel  in  response  said  that  Cote  D’Ivoire’s  return  to  AGOA    eligibility  was  an  

initiative  that  had  the  support  of  various  Members  of  Congress.  

The  South  African  Ambassador  in  the  US,  Ebrahim  Rasool  pointed  out  the  responsibility  on  the  part  of  the  Diplomatic  Corps  to  equip  proponents  of  AGOA  in  Congress  with  proper  information  in  order  to  deliver  a  message  that  is  well  understood  and  to  avoid  misunderstandings.  

 Congressman  Payne  stated  that  fostering  robust  trade  between  African  countries  was  an  essential  step  

for  the  continent.  

He  noted  that  beyond  trade,  there  was  need  to  foster  Foreign  Direct  Investment  in  Africa.  

“In  the  last  few  years,  many  African  countries  have  seen  a  surge  in  Foreign  Direct  Investment,  with  a  great  deal  of  that  money  coming  from  India  and  China,”  he  added.  

Congressman  Payne  stated  that  the  US  had  been  slow  to  react  to  changes  in  Africa  and  that  many  private  sector  companies  in  the  US  remained  hesitant  to  invest  in  the  continent  because  of  political  

instability  and  violence  in  the  region.  

He  concluded  that,  “The  United  States  must  continue  to  be  a  partner  in  Africa’s  progress  and  build  a  relationship  based  on  mutual  respect  and  interests.  

Africa  is  ready  to  transition  from  an  afterthought  to  a  major  figure  in  the  world  economy  and  the  US  should  make  necessary  policy  changes  to  ensure  that  our  financial  instruments  are  revamped  to  fully  

support  this  transition.”  

In  his  remarks,  co-­‐Chair  Congressman  Bobby  L.  Rush  asserted  that  he  strongly  believed,  “Africa  holds  the  keys  to  its  own  development.”  

He  said  the  continent  was  experiencing  economic  take  off  and  added,  “At  the  same  time,  we  are  facing  

serious  competition  in  our  economic  relations  with  African  countries.  

 I  have  not  met  a  single  public  official  or  private  sector  representative  from  either  the  African  or  North  American  continent  who  has  said  they  do  not  want  more  trading  activity  between  them.  What  is  clear  to  me  is  that  stronger  partnerships  will  forge  the  link  that  is  currently  missing.”  

From  the  Private  Sector,  the  Senior  Vice  President,  Public  Affairs  at  Motorolla  Solutions,  Ms.  Karen  

Tandy  told  the  meeting  that  her  organization  had  been  active  in  African  countries  for  40  years  and  taken  a  slew  of  development  initiatives  to  the  continent.  

She  stated,  however,  that  the  company  had  been  severely  thwarted  in  its  efforts  to  extend  its  business  footprint  owing  mainly  to  the  favourable  financing  and  uneven  playing  field,  which  many  Chinese  

companies  seize  advantage  in  Africa.  

She  noted  that  the  Export-­‐Import  Bank(EIB)  of  America  was  essential  in  terms  of  financing,  but  that  there  were  many  EIB  rules  that  were  “antiquated  and  irrelevant.”  

In  response,  Vice  Chair  of  Export-­‐Import  Bank  (EIB)  of  America  said  EIB  business  was  growing  rapidly  in  

Africa  as  was  seen  in  2010  when  the  company  registered  177  transactions  in  20  different  countries.  

She  said  even  though  the  Bank  has  a  congressional  mandate  to  do  business  with  African  countries,  its  commitment  to  the  continent  was  much  broader  than  just  a  mandate.  

And  Senior  Counsel,  International  Policy  and  Trade  from  General  Electric  (GE)  Del  Renigar  maintained  that  the  firm  considered  African  countries  to  be  partners.    

He  said  General  Electric    had  opened  an  office  in  Nairobi,  Kenya  and  was  extending  its  operations  

southwards  to  neighbouring  countries  such  as  South  Africa  and  Angola.    

He  added  that  the  company  was  taking  deliberate  steps  to  position  itself  as  the  one-­‐stop  shop  for  countries  seeking  to  increase  their  GDPs  and  to  improve  the  quality  of  life  and  access  to  healthcare  for  their  people.  

At  the  end  of  the  meeting,  key  points  evolved  around  a  number  of  issues  of  pertinent  to  AGOA  viz-­‐a-­‐viz  

the  United  States  of  America.  Of  significance  were  as  follows:  

• Commitment  to  strengthen  and  extend  AGOA  and  the  Third  Country  Fabric  provision  beyond  2015.  

• Provide  Members  of  Congress  who  are  champions  of  AGOA  with  the  information  and  support  necessary  to  make  compelling  cases  of  linkage  to  US  national  interests  that  build  a  constituency  

for  AGOA  renewal  and  extension  

• Promote  Cote  D’Ivoire’s  eligibility  to  resume  participation  in  AGOA  and  move  that  initiative  forward  post-­‐haste  

• Advance  efforts  to  improve  US  competitiveness  with  regard  to  China  through    strengthening  

Export  Import  Bank  (EIB)  

• To  increase  exports  to  Africa  via  EIB  financing  and  more  favourable  investment  conditions  for  US  companies  in  Africa  

• The  American  Private  Sector  were  unanimous  in  their  call  for  a  leveling  playing  field  as  far  as  American  businesses  were  concerned,  and  equipping  those  businesses  with  the  tools  to  access  

and  to  compete  in  African  markets  

• That    the  first  Quarterly  Meeting  with  the  African  Diplomatic  Corps  would  serve  as  an  ongoing  forum  for  the  promotion  of  ideas  and  the  cultivation  of  relationships  between  Members  of  Congress,  African  Diplomatic  Corps  and  the  Private  Sector.  

The  author  is  Press  Secretary  at  the  Embassy  of  the  Republic  of  Zambia  in  Washington  DC