Africa's US sales more important than deal

African nations exporting to the United States under a special deal should boost sales rather than pushing to extend the agreement, US trade representative Ron Kirk said on Thursday.

A total of 38 African countries are allowed to export more than 6 400 goods to the United States without paying duties under the African Growth and Opportunity Act (AGOA).

The deal is due to expire in 2015 and African nations have asked for the term to be extended and listed products increased.

“Time spent worrying about whether AGOA will be extended five years from now versus making the hard decisions that need to be made to help some of our countries become more export successful is time wasted,” Kirk told Reuters.

“The reality is that many of our countries are having difficulties that can be solved by their own initiative and have nothing to do with the range of products or the timeline.”

US preferential trade programmes with other parts of the world will be expiring at the end of 2009 and will be going through review in Congress, he said in an interview, so Africa is lucky that it still has some time until the next review.

“The most expeditious thing we can do is to make the most use of AGOA in the time we have now, and as we have plenty of lead time to talk about extending it.”

Under AGOA, the United States gives full duty-free preference to 98% of products from Africa, yet AGOA members take advantage of less than 60 specific items, he said.

Sub-Saharan Africa accounts for a little more than 1% of total U.S. exports and only about 3% of US imports.

Oil from countries such as Nigeria, Angola and Chad accounted for about 80% of the $86-billion in total US purchases from the region last year.

Cotton subsidies
US President Barack Obama’s administration has said it is serious about tackling poverty, but has failed to scrap subsidies to its cotton farmers that are choking poor farmers in Benin, Burkina Faso, Chad and Mali.

Kirk reiterated the US stand that a successful completion of the WTO Doha round of negotiations, providing market access for all the parties involved, was the best way forward.

“I welcome and understand those in Africa, particularly about cotton subsidies, but I’ve invited them to be as forceful in pressing the other members of the WTO to engage energetically in goods and services, in non-agriculture manufacturing so that we can bring this issue to some resolution.”

He said it was unfair that the completion of the trade talks depends on the issue of subsidies: “It was a horrible decision to single out one industry in one country and say, ‘We’ll hold our feet on everything else, we won’t proceed’ ... but for one country, one industry only.”

Silver bullet
Kirk said African countries must urgently address bad infrastructure, tariff barriers, customs standardisation, government and legal reforms and corruption if they want to attract more investment from the West.

Some nations have been successful under the AGOA framework, Kirk said, citing the Indian Ocean island of Mauritius.

Speaking in Nairobi at an annual AGOA forum, he said the United States had launched negotiations for a bilateral investment treaty with Mauritius.

He said African states should look at other markets, including more nations on the continent, to expand exports and reform systems to attract more foreign investment.

“The ball is now in Africa’s court.
If American investors begin to see ... real democratic reforms in government, in justice, in regulatory schemes so that there is predictability, you will see some foreign investment begin to flow.” - Reuters

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