U.S. Official Comments on AGOA Trade Act at Media Forum

Cites favorable export statistics

Washington -- Trade between the United States and sub-Saharan Africa has been sparked by the African Growth and Opportunity Act (AGOA), an historic trade bill whose passage last year in Congress was helped by the African diplomatic corps, says Dr. Abdul Shaikh, regional coordinator for Africa and the Middle East at the U.S. Commerce Department.

Shaikh, a senior international economist at Commerce, spoke at a June 12 meeting at the headquarters of the Freedom Forum, a media foundation dedicated to free speech and free press worldwide. The topic for discussion was "Telling the U.S.-Africa Trade Story" and the influence of the African diplomatic corps.

The official explained that "under AGOA, for the first time in the history of the United States, any African country or countries are allowed to export without any quota or any duty."

Recent U.S. Trade Representative (USTR) figures show that exports to the United States from African nations that have been deemed eligible under AGOA has risen by 24% over the first three months of 2001 compared to the same period in 2000.

Signed into law by former U.S. president Bill Clinton in May 2000, AGOA provides African countries with broad access to U.S. markets. The reform law encourages the improvement of Africa's economic regimes in hope of attracting U.S. firms to the continent by eliminating the duties and quotas usually imposed on the two-way street of trade.

Shaikh said that President George Bush looks to continue the success of AGOA and "is very much interested in maintaining the legacy of the previous administration" on helping Africans develop their economies along free-market principles.

Even before AGOA became law, Shaikh indicated that trade between Africa and the United States was on the upswing. For example, African exports to the U.S. grew by 67% between 1999 and 2000, he said.

In 2000, African countries exported $27.6 billion of goods and services to the U.S., approximately 2.6% of the $1.068 trillion total U.S. imports last year. In comparison, Asia exported $454.7 billion worth of goods and services to the U.S., and South America exported $209.2 billion worth of goods and services to the U.S. in 2000. The U.S. exported $10.9 billion of goods and services to Africa in 2000.

The leading U.S exports to Africa in 2000 were aircraft and parts ($780.5 million), oil and gas equipment ($343 million), wheat ($309.8 million), motor vehicles and parts ($257.5 million), and industrial chemicals ($231.9 million). Telecommunications exports totaled $139.5 million.

Crude oil dominated sub-Saharan African exports to the U.S. in 2000, causing $16.29 billion to change hands. Platinum group metals ($1.523 billion), petroleum products ($969.4 million), and woven or knit apparel ($748.1 million) also accounted for the $23.5 billion total goods and services that went from sub-Saharan Africa to the U.S. that year.

"We want to see more of the trade from Africa to the United States because the trade means a better standard of living, more jobs for Africans, and therefore the capacity to buy American goods," said Shaikh.

To get more trade flowing between Africa and the U.S., Africa's biggest market, Shaikh indicated a number of factors that foster investment, including the elimination of government control of industry, transparency of investment policies, long-term stability, and a workable infrastructure.

Also key, Shaikh said, were the criteria for eligibility in AGOA, including positive market reforms, intellectual property rights, acceptable labor conditions, protection for human rights, and a workable visa system for goods. Once U.S. and African officials agree that a particular country is moving to meet these measures, it becomes eligible for membership in AGOA. In January, Swaziland was designated the 35th eligible country.