The Future is Here

Paul Ryan, Chairman of the House Ways and Means Committee

For the past 15 years, the African Growth and Opportunity Act (AGOA) has been the thing to talk about if you’re in the business of U.S. – Africa relations. Yes – during the Bush Years, there was PEPFAR – the President’s Emergency Plan for AIDS Relief; and here, many African countries, like Uganda and Malawi, were able to access millions and millions of dollars in anti-retroviral treatment for their sick. Ultimately, just like PEPFAR, AGOA has had successes and some major drawbacks that can be blamed on both sides of the upper and lower Atlantic. For instance, by not allowing African countries to export their heart’s content in sugar, cotton, tobacco, groundnuts and other commodities currently under American tariff rate quotas (TRQ), some African countries and their supporters could, legitimately, suggest that AGOA did not fully exploit its economic development potential. Others say that because of the way countries were allowed to access benefits or kicked out of the program, this was unfair – much like Franz Fanon’s Wretched of the Earth. Of course, so much more was said about the preference program that gave African countries access to the American market for more than 97% of their products and services.

But today, just when some had started to wring their hands in helplessness, there’s a stronger than strong probability that – well in advance of its September 30, 2015 expiry – AGOA will be extended and actually enhanced to respond to some of the issues the program has had over the years. Although AGOA beneficiaries may still not have duty free/quota free (DFQF) access for those TRQ products mentioned above, they’ll probably be allowed to collaborate with each other in the production of goods and services. According to the summary of the AGOA Extension and Enhancement Act (AEEA) of 2015, the bill will promote greater regional integration in Africa by updating AGOA’s rules of origin to allow African countries to conglomerate in exporting to the U.S. instead of working as singular units. This is a huge development, and the African Union, the African Ambassadors in Washington, DC – and a whole host of important stakeholders need to be congratulated on their successful advocacy.

In the same vein, the AEEA ‘provides a long-term extension of AGOA for 10 years, including a 10 year extension of third-country fabric provisions, which are important to continue to nurture the development of the textile and apparel industry in sub-Saharan Africa.’ This is another key development – not only because it encourages longer-term American investment in various African industries, but also helps make the case for a continental free trade agreement (CFTA) as advocated by the African Union and all key regional economic communities. The plan is for this to be in place by 2017 – and if this significant milestone can be achieved, then Africa can, legitimately, make the case for a mega regional trade agreement with the United States – just like the Transpacific Partnership (TPP) with the Far East and the Transatlantic Trade and Investment Partnership (TTIP) with the European Union.

If the AEEA is true to its word and is about reaffirming the United States’ commitment to Africa ‘through clear statements of policy on the importance of AGOA and expanding trade and investment ties between the United States and sub-Saharan Africa,’ then Africa has a singular task: Over the next 10 years, the continent as a whole, must work towards truly exploiting the dynamic that truly exists between itself – as the world’s fastest growing region – and the United States as the world’s foremost consumer economy. Surely, anyone can figure this one out.

The Habari Network Editorial Board
April 22, 2015