United States: So near, yet so far
The start of 2004 has presented a set of challenges to the business community in Benin.
After difficult negotiations that lasted for almost two years, the country was finally granted a licence in January to export a variety of locally manufactured goods to the United States, tariff- and quota-free. But, laments Henri Gouthon, president of the National Council of Beninese Exporters, “Benin has nothing to export!”
“We’ve been able to obtain the Agoa [African Growth and Opportunity Act] visa, but we are not ready,” he adds. “It’s like we want to go hunting but we’ve forgotten to ready the dogs.”
The question now is whether would-be manufacturers will be able to rise to the challenge.
The visas or export licences in question are granted under Agoa that was passed in May 2000 during the presidency of Bill Clinton.
The act aims to “promote trade and investment between the US and the countries of sub-Saharan Africa by according eligible countries special access to the American market”.
For countries to become eligible, they have to demonstrate progress in areas that include the protection of human rights, the scrapping of some forms of child labour, upholding democracy and the rule of law—and doing away with barriers to US trade and investment. To date, almost 40 states have made the grade.
The range of finished goods that Benin may now export to the US includes animal, leather and seafood products, fruit juices—and iron and steel goods. Agoa also provides for a limited export of clothing textiles made from fabric and yarn produced in the various sub-Saharan countries.
For the immediate future, however, this means little to Benin.
“Benin produces the best cotton in West Africa, but the manufacturing facilities do not exist there to create finished products. Benin also produces the highest-quality cashew, but it sends its entire crop abroad elsewhere,” says Leonard Yamongbe, who is in charge of Agoa-related matters at the Beninese Ministry of Industry, Trade and Business Development.
On average, Benin exports 150Â 000 tons of cotton fibre annually—about 50% of its total production. And, 99% of its cashew crop goes to India. Even the packaging used to ship these commodities abroad is made outside the borders of Benin.
“At the present time, Benin has only four textile factories that could possibly sell to the American market. But unfortunately, none of them can do so yet because they are not set up to meet American standards,” explains Tidjani Chakirou, secretary general of the Chamber of Commerce and Industry of Benin.
Before tackling this market, he says, Beninese manufacturers need to acquaint themselves with US standards and distribution systems.
Gouthon agrees: “We’ll really have to hustle and train our merchants, our customs officers, our technicians, and especially retool our production facilities to conform to American standards.
“We’ve spent a lot of time being asleep. But if we begin working on it right away, we can be ready in six to eight months, that is, before the end of 2004,” he says.
Yamongbe believes that the Agoa licence provides a golden opportunity for Asian firms from China, Thailand and Hong Kong to invest in Benin, where they can build factories to cater for the US market. He says the aim of Agoa is to encourage developing countries to develop local manufacturing capacity.
But, lurking in the background of concerns about how Benin can make the most of Agoa is the spectre of missed opportunities under the Lome Convention. This agreement gave developing countries preferential access to European markets.
“Benin has done nothing about it [the Lome Convention]. We haven’t taken advantage of the opportunity,” says Chakirou.
“We’ve just been playing around. It would therefore not be surprising if once again, we fail to use the Agoa law to our best advantage,” he added pessimistically.—IPS