Washington, DC — High tariffs and trade barriers on African-manufactured products block the continent's development, Ugandan President Yoweri Museveni told a Washington audience at the Center for Strategic and International Studies (CSIS) Monday afternoon.
"If I export a kilogram of raw cotton I am paid US$1.20. If you make yarn, you get three times that. If you weave, the value goes up six times and if you make the garment the value goes up ten times," Museveni said, complaining that unfair tariff barriers make Africa a continent of "donor" nations that give jobs and income to the industrial west.
While Uganda is the fourth biggest coffee exporter in the world, the country 'donates' US$15 and creates jobs overseas for every kilogram exported as a raw material, Museveni said. The cocoa bean "comes in free," he noted. "But if you are too clever and try and make chocolate there's a 25 percent tax."
Museveni speaks passionately about the trade imbalance issue whenever he is given an opportunity. "My assignment at the G8 was to talk of market access." Museveni said, speaking of the lunch he and five other African presidents had with leaders of the Group of Eight nations at last week's summit in Sea Island, Georgia. Last month, in an opening address to a conference of African finance ministers and central bankers, Museveni called current trade arrangements "sinful" and received loud cheers from a usually staid crowd. "If you are foolish enough to sell your raw materials, you are welcome. If you are clever to add value to your exports, you are shut out."
The African Growth and Opportunity Act (Agoa) passed by the U.S. Congress in 2000 marked a change, the Ugandan president said. "It is the greatest act of solidarity between the West and Black Africa in the last 500 years," said Museveni, who stayed in Washington to lobby for extension of the law after attending the summit and the funeral of former President Ronald Reagan.
Museveni met Monday with the U.S. Senate Majority Leader, Bill Frist (R-Tennessee) who assured him that the proposed legislation that extending Agoa until 2015 would not get lost in the growing presidential election-year furor. Since it was adopted, Agoa has generated US$18 billion in exports from Africa and 300,000 jobs, "so you can see this is the way to go," Museveni said. "That is what I was telling Frist when I met with him today."
A key provision of the legislation continues duty-free access for garments made in Africa from fabrics of other countries until September 2007. In an April letter to U.S. President George W. Bush, Museveni said that without the extension of the 'third-country fabric' provision, due to end September 30 this year, "factories started will collapse."
Earlier Monday, the House of Representatives unanimously passed its version of the legislation, extending third-country fabric provisions. And in a statement, the White House Office of Management and Budget declared that the administration "strongly supported" the House bill. It called Agoa the "centerpiece" of U.S. policy to "encourage economic and political reforms, alleviate poverty in sub-Saharan African countries, facilitate the region's integration into the global economy and create jobs here at home."
The administration statement also outlined objections to several provisions in the House bill including one requiring the President to convene a trade and advisory committee on Africa and another requiring that a minimum of 20 technical experts be assigned to no fewer than 10 countries, saying they would "limit Presidential discretion." In addition, the statement said the development studies called for in the House bill "are generally useful" but should not be mandated for every country in sub-Saharan Africa, including those not designated as Agoa beneficiaries.
From a different standpoint, Rep. Jesse Jackson Jr., (D-Illinois) spoke against the legislation, charging that it forces participating African nations to meet conditions on security and economic reforms that are not imposed on other U.S. regional trade-agreement partners.
Concern about the future of Agoa has focused on the U.S. Senate, where prospects for passage have been clouded by bipartisan disputes unrelated to the African bill. But on Monday, the Senate Finance Committee chairman, Charles Grassley, (R-Iowa) and the Committee's ranking Democrat, Max Baucus, (D-Montana) pledged to introduce an Agoa bill for a vote. "There's no reason the Senate shouldn't pass this bill this year," Grassley said.
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In an editorial Tuesday welcoming the House vote, the Washington Post warned that Senate inaction remains a danger to the bill. "Giving Africa this access costs the United States almost nothing; the business that Africa wins comes at the expense of other developing countries, particularly in Asia's textile industry," the editorial said.
"Time is of the essence," the paper argued, citing both a "crowded" Senate calendar and the pending expiration of the key 'third-country fabric' provision. "Already, orders to supply U.S. clothing retailers that might have been placed with African factories are being redirected, because by the time those orders are filled Africa's special trade access may have run out," the editorial said. "The chief danger to the bill is therefore that a handful of senators might try to attach amendments, eating up scarce floor time and ultimately compelling the Senate leadership to drop the whole business."
