Washington, DC — The United States will be pointing to positive numbers showing rising bilateral trade with African countries at next week's "Agoa" forum in Mauritius, arguing that Agoa - the trade and cooperation act intended to boost economic ties between Africa and the U.S. - is proving very effective.
But critics say the small print tells a less positive story; African trade and finance ministers from 38 countries are likely to seek concrete improvements in Agoa's terms at the forum, as well as clarification on political "conditionality" that might be imposed by Washington.
It is also clear that many aspects of the Agoa relationship are being determined elsewhere. Issues of democracy and governance as well as of capacity-building, agricultural subsidies, the continuing debt crisis and unresolved trade issues are still being wrestled with by the World Trade Organization (WTO). And those deliberations will determine the handling of such issues under Agoa.
The U.S.Sub-Saharan African Trade and Cooperation Forum is mandated by the African Growth and Opportunities Act (Agoa) signed into U.S. law in May 2000. Next week's forum is the second such meeting. The first was held in Washington, DC in October, 2001, when President Bush called Agoa, "a roadmap for how the United States and Africa can tap the power of markets to improve the lives of our citizens."
There is disappointment that President Bush, who last month had announced his intention to open the forum, has since cancelled those plans. And Secretary of State Colin Powell will not be in attendance because of "other issues that are pending," said a senior administration official speaking on background.
United States Trade Representative Robert Zoellick will lead the US delegation to Mauritius that includes USAID administrator Andrew Natsios as well as U.S. Under Secretary Of State For Economic Business And Agricultural Affairs, Alan Larson.
Declaring himself "very excited" by the upcoming meeting, Larson, says "AGOA is a centerpiece of our relationship with Sub-Saharan Africa" and stresses the themes of investment, trade and "investing in people".
Mixed record
According to President Bush's May 2002 report to Congress (also mandated by the Act), Agoa has resulted in accelerating trade with Africa. With "substantially all products from sub-Saharan Africa...now eligible to enter the United States duty free," U.S. imports from Africa have increased 61.5 percent over the last two years," according to the White House.
But a closer look at the numbers reveals a thin line between progress and pitfall. While apparel exports to the United States from certain countries - notably Kenya, Madagascar, Lesotho and Mauritius - have dramatically increased in the past two years, by far the greatest gains came in the oil and mining sectors of sub-Saharan Africa, with crude oil representing 64 percent of the total value of African exports to the United States, followed by the platinum group metals at 7 per cent. Apparels represent only 4.5 percent of sub-Saharan exports to the U.S.
Money from oil output buffered sub-Saharan Africa from the global economic turndown in 2001, the latest year for which figures are available. And though global growth dropped to 1.3 percent from 3.8 percent, Africa experienced a 2.7 percent growth rate, down from 3 percent in 2000. According to the IMF it was the first time in five years that sub-Saharan Africa recorded faster growth than the world in general.
But this still doesn't make for an economically healthy Africa. Even with Agoa, foreign investment still seems in flight from the continent. According to the third annual "U.S.-Trade and Investment with Sub-Saharan Africa" report of the U.S. International Trade Commission, sub-Saharan Africa received only $14.3 billion in investments in 2001, or 7.7 percent of global foreign investment flows to developing countries. But almost one-half of those 2001 investment inflows came from the sale of a South African company to a British firm. Without this transaction, investment flows would have totaled an estimated $6.9 billion. nearly 10 percent less than in 2000.
"Agoa has been a real mixed bag, but overall it's a sham," says Bill Fletcher, president of the Washington, D.C.-based TransAfrica Forum. "Exports continue to be largely oil. While in a number of countries there has been an increase in jobs - and that's good - Agoa doesn't carry with it human, environmental and labor rights to protect people in areas where production is supposed to be taking place."
In Lesotho, one of the Agoa success stories with 15,000 new jobs in the country because of the Act, factories produce Wrangler blue jeans and clothing for Wal-Mart discount chain of stores. Workers there have begun complaining of long hours and low pay. But that's better than no work and no pay, say Agoa supporters.
"What I hear when I'm there [in Africa] is that Africans are asking for more trade, not less trade," former U.S. Trade representative for Africa, Rosa M. Whitaker, told allAfrica in a recent interview. "Those people don't have a problem with trade; they're asking for more of it. [You] should talk to those women who have been working and supporting a whole village on their salaries and now having opportunities including educating girls as well as boys."
Nonetheless, says the NGO Bread for the World, in a presentation prepared for the Mauritius meeting, Agoa "is still a hot button issue for some advocacy organizations in the U.S. who say that it does not truly provide a broad range of opportunities for African businesses to trade and grow."
Africans are also asking for better terms of trade, both within the Agoa framework and outside of it. One important concern African ministers have is with the scheduled ending of textile quotas for U.S imports next year. Their still-fragile industries trying to export to the U.S. will face stiff competition from Asian nations like China and Thailand. Even now, many of Lesotho's new apparel factories are owned by Taiwanese and Chinese.
"It's precisely because we recognize the concerns that African producers and some other smaller producers have that we have created a program that will give special preferential benefits to them after the end of quotas," said Under Secretary Larson. Agoa, he explained, promises "tariff-free entry" so even if textile quotas are lifted, as scheduled, across the board, African producers will still continue to benefit from preferential access to the U.S. market.
Larson sees quota-allocation as an issue for the World Trade Organisation, and no proposal to extend import quotas has been proposed in the WTO. "If it were broached in any explicit way, we would have to take a look at it and come to a conclusion. But it isn't that we're for or against; it's simply that the issue hasn't been raised.
But it is not just the economic terms of trade which have provoked concern. Insistent voices on human rights and democracy have been raised in tones loud enough to be heard. In Mauritius, a group calling itself, "Platform Against Bush's Politics" has been banned from holding a protest march against Agoa and the looming war with Iraq during the meeting. The reason given by the authorities is that the Agoa conference will absorb existing police capacity, making it impossible to permit public gatherings or possessions while it is taking place.
Political conditionality
Meanwhile, the U.S. Embassy in Swaziland issued a statement last month warning that "abuses of...basic principles of justice and human rights on the rise in Swaziland," is putting that countries eligibility for Agoa at risk.
A "warning" letter from the State Department - a little known option under the Agoa legislation - is now being sent to Swaziland. "It tells them that 'you are on probation' and unless you do something to correct labor, human rights and economic policies, next January you will be out [of Agoa]," said a senior administration official speaking on background and on condition of anonymity.
Eritrea will also get such a warning letter "for its total crackdown on civil society."
But Swaziland has become the lightening rod for the relationship of Agoa to democratization. A New Year's manifesto by the "illegal" opposition People's United Democratic Movement (Pudemo) called for repeal of a 1973 royal degree that did away with the constitution and banned political parties and opposition to the then King, Sobhuza; and a new coalition of business groups, fearful of losing Agoa eligibility, has given the government until January 20 to commit to democratization.
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In Mauritius, African ministers will want to know where the line is drawn between their sovereignty and U.S. authority to impose conditions for participation in Agoa.
"One of the things that trade is supposed to do is help society develop to a place where it can be more liberal politically," says Africa Society president Leonard Robinson who is hoping that some "synergy" between civil society, government and the private business sector will emerge at the end of the Forum.
As well as the two-day ministerial meeting starting on Wednesday January 13, businesses and civil society groups will also have an opportunity to meet beforehand.
The private sector forum organized by the America-Mauritius Chamber of Commerce (AMCham), the Corporate Council on Africa (CCA) and the African Coalition for Trade (ACT) will gather on January 14 to focus on finance, doing business in the United States, trade barriers and biotechnology.
The low level of civil society participation has been one of the criticisms of Agoa and, unlike the private sector forum, the NGO or "shadow Forum" was not held during the 2001 meeting in Washington. "Many African NGOs remain uninformed about what Agoa offers their countries in terms of economic benefits," said the Washington, DC-based Foundation for Democracy in Africa, one of the coordinators of the NGO gathering.
But President Bush's decision not to go to Africa and Mauritius has given some U.S. NGOs second thoughts about attending. "It's 8,000 miles and a lot of money," said the Africa Society's Robinson, explaining his organization's decision not to participate. The Constituency for Africa and TransAfrica have also decided not to go.
