The U.S. and Africa: Current and Future Relationships
Presentation by:
Florizelle Liser
Assistant USTR for Africa
U.S. Trade Policy Toward Africa AGOA
WTO Cooperation
Trade Capacity Building
High Level Dialogue
AGOA AGOA extended through 2015 and key to helping
boost two-way trade between the United States and sub-Saharan Africa
Continued success under AGOA will depend on countries’ intensified efforts to promote greater diversification of AGOA trade
Also supporting reform efforts in Africa and generating new investments
AGOA Eligibility Congress established criteria – “continual
progress” toward rule of law, open markets, poverty reduction, labor rights, etc.
Annual review process; input welcome Has resulted in some countries being added,
some dropped, e.g. Liberia 38 countries now eligible
U.S. Trade with Sub-Saharan Africa
0
20
40
60
Billions of Dollars
Total exports 5.9 6.9 6.0 6.9 8.6 10.3 12.1
Total imports 23.5 21.3 17.9 25.6 35.9 50.3 59.2
2000 2001 2002 2003 2004 2005 2006
AGOA Non-Oil Trade Trends
0
0.5
1
1.5
2
2.5
3
3.5
Bill
ion
s o
f D
olla
rs
2001 2002 2003 2004 2005 2006
Non-Oil AGOA Trade
0.0
0.5
1.0
1.5
2.0
Bill
ion
s o
f D
olla
rs
AGOA Apparel Trade
AGOA 0.4 0.8 1.2 1.6 1.4 1.3
Total 0.9 1.1 1.5 1.8 1.5 1.3
2001 2002 2003 2004 2005 2006
0.0
50.0
100.0
150.0
Mill
ion
s o
f D
olla
rs
AGOA Fruits & Nuts Trade
AGOA 29.4 40.1 62.0 73.1 79.5 85.8
Total 43.4 47.6 73.7 88.7 95.4 103.8
2001 2002 2003 2004 2005 2006 0.0
1.0
2.0
3.0
4.0
5.0
Mill
ion
s o
f D
olla
rs
AGOA Footwear Trade
AGOA 0.2 0.3 0.8 0.9 1.9 2.5
Total 1.3 0.9 1.4 1.9 2.3 4.1
2001 2002 2003 2004 2005 2006
Agriculture
AGOA agricultural exports are increasing – more countries and more products, totaling $361 million in 2006 – a 33% increase over 2005
Since placing APHIS experts at the regional hubs, 5 products have gone through pest risk assessments (PRAs), & another 10 are in the pipeline
South Africa most diverse in raw & processed agricultural exports under AGOA – sending everything from fresh citrus, to wine, to macadamia nuts
Rwanda Coffee
With USAID help, moved up value chain from green beans to high-quality specialty coffee
Coffee exports tripled in last 3 years; $6.5 million in 2006
Rwandan Peace Baskets at Macy’s
Macy’s Showcases in NY Store and on Internet
Made by Genocide Survivors, mostly from rural areas
Not just Christmas sales – ongoing partnership
Women get one-third of retail price
USAID, USADF and Nairobi Trade Hub Involved
East African Cut Flowers
EU is now main market, but exports to U.S. growing, up 19% in 2006, to $3 million
USAID assisting
Transport challenges
Kenya, Ethiopia, Uganda, and South Africa exported in 2006
African Cut Flowers at Macy’s African flowers at Macy’s annual
Flower Show
Over 400,000 visitors viewed exhibit of diverse African flowers
Including two 18ft high giraffes made entirely of flowers
A lush centerpiece of African trees, flowers, and plants
Cashews from Mozambique
Used to export raw cashew nuts to India for processing. Cashews processed in India were, in turn, exported to the United States
With the support of USAID and Technoserve, Mozambique is now shipping processed cashews directly to United States and adding more value
US TCB helped to set up cooperatives, produce, distribute, brand, and market the cashews
Total cashew imports from Africa up 73% in 2006, reaching nearly $11 million
Tuna from Mauritius
In 2006, Mauritius exported its first AGOA exports of processed tuna “loins”
Visited new multi-million dollar tuna processing plant that employs 1,400 people
Tuna loins are now the second largest Mauritian export to the United States after textiles and apparel
For three years, AGOA hubs have worked with African fish processors bringing more than eight companies to the annual Boston Seafood Show
Organic Cotton T-Shirts from Uganda
In February 2007, first shipment under AGOA of high-end 100% organic T-shirts from Uganda
Example of vertical integration
Opportunities with organic cotton
Jeans from Mauritius
High-end jeans from a new vertically-integrated factory
The factory imports cotton from West Africa, produces the yarn and fabric, cuts, and sews jeans
Vertical integration allows for greater competitiveness
Also reduces the need for and reliance on third-country fabric
Men’s Sports Jersey from Ethiopia
Ethiopia not previously apparel exporter to U.S. but has seen exports rise in each of last 5 years
Much investment in sector from within Ethiopia or from expatriates
Production-sharing among small firms
Shirts from Madagascar (Eddie Bauer/Tommy Hillfiger)
Madagascar is producing high-end, high-quality shirts
Malagasy apparel firms are targeting specific niches in order to compete with China
One such niche is high-quality shirts that require special detail requirements
AGOA Stimulating Investment
$100s of millions in AGOA-related investment
Apparel, textiles, as well as autos, seafood, & agribusiness
SSA less than 1 percent of U.S FDI
In 2005, US FDI totaled $14.8 billion, up 16%
More U.S. direct investment would support trade with the region and enhance U.S.-African business partnerships
Cooperation on WTO Doha Round
U.S. committed to trade-expanding agreement
Africa has much at stake -- declining share of trade
Main development outcome is new trade flows, esp. South-South trade
Cotton: pursuing on two tracks
Duty-Free/Quota-Free: African input on implementation
Trade Capacity Building
Access to markets alone insufficient to simulate increased trade
TCB essential to diversify African trade globally and with the United States
$394 million for SSA in FY2006. Over a billion dollars since 2001
AGCI: $200 million, 5-year program
Trade Hubs
Export Diversification Workshops
Need to integrate trade into development strategies
High Level Dialogue AGOA Forum encourages high-level dialogue
on new policies and initiatives that could promote mutually beneficial trade and economic development under AGOA
Next AGOA Forum on July 18-19 in Accra Ghana, with theme, “As Trade Grows, Africa Prospers: Optimizing Benefits Under AGOA”
What You Can Do When delegations visit, arrange for visits outside of Washington to meet with U.S. businesspeople.
Know the top 5 products the U.S. imports from your country and be familiar with the major importers. Develop a strategy for identifying new prospective buyers of your products.
Get schedules of U.S. trade shows for buyers: the Boston seafood show, the Miami flower show, the MAGIC apparel show, the New York gift show -- and get your entrepreneurs there. Be sure their presentations are ready for a global stage.
Encourage your governments to update their AGOA strategies to reflect the dynamic trade environment. How many countries are poised to take advantage of the new AGOA 4 textile benefits? How many took advantage of ethnic prints in AGOA 3?
New information is becoming available all the time on African competitiveness issues. For example, the ITC study I mentioned earlier. Feed this information back into your government’s AGOA strategy.
For those of you with TIFAs, make sure follow up occurs on action items.
For those of you from countries who are not in AGOA: Be familiar with the impediments to eligibility and meet regularly with U.S. government agencies to discuss possible ways forward, and then relay this back to key officials in your capitals.