U.S. Africa Trade Official Addresses
OAU Economic Forum in Abuja

Rosa Whitaker cites progress already made by AGOA

Washington -- Assistant U.S. Trade Representative (USTR) for Africa Rosa Whitaker told a September 22 meeting of the Organization of African Unity (OAU) that the organization's efforts at trade liberalization and regional integration are appreciated by the United States.

Whitaker made her comments at the OAU African Economic Community's Fourth Regular Conference of Trade Ministers, held in Abuja, Nigeria. According to the speech released by her office, she told the ministers, "I want to start by thanking the Organization of African Unity and the Nigerian Government for hosting this important meeting, which represents yet another sign of Africa's growing leadership in the international trading system."

The U.S. government, she emphasized, is "absolutely delighted with the leadership that OAU, COMESA/SADC [Common Market for Eastern and Southern Africa/Southern African Development Community], ECOWAS [Economic Community of West African States], and other regional institutions, and individual trade ministries in the region are demonstrating in preparing for the next round of global trade negotiations. You are also ensuring that the WTO [World Trade Organization] and preferential trade initiatives such as the African Growth and Opportunity Act [AGOA] yield their full potential for African farmers, families, and entrepreneurs."

AGOA, the first-ever U.S. trade agreement with African nations, became law in May 2000 after enthusiastic support from both political parties in Congress. Its aim is to help spur African development by offering favorable export arrangements to nations liberalizing their economies. Thus far, 35 nations on the continent have been deemed eligible for the program and a meeting of their trade and finance ministers is planned for Washington later in October.

In her remarks Whitaker also touched on the recent terrorist attacks in America, saying: "On behalf of the United States, I'd also like to take this opportunity to thank you for all of the kind words of sympathy and support that you extended to us in the wake of the horrific and tragic terrorist attack on our nation and all of humanity on Tuesday, September 11. Many of us are personally touched by this tragedy, but we are comforted by the expressions of support throughout the world, particularly in Africa."

Whitaker stressed that the events of September 11 "make it even more important that we launch a new [WTO] round, so that the world trading system can continue to promote international growth, development, and openness, which strengthen the prospects for enhanced and sustainable peace and security."

Because of AGOA, Whitaker said, "essentially all products from this region now enter the $10 trillion [$10 million million] U.S. market duty- and quota-free. The few remaining duties on products from this region are very low. AGOA provides sub-Saharan Africa with the most liberal and generous access to the U.S. market accorded any region of the world. This was not the case four years ago. This represents progress made and promises kept."

In addition, she said, the opportunities accorded under AGOA "have also translated into tangible gains for many African countries. In a little more than a year of enactment, AGOA has resulted in nearly $4 billion [$4,000 million] in expanded trade and investment in sub-Saharan Africa. This surpassed the predictions and estimates of our own economist at the International Trade Commission."

Whitaker further pointed out that AGOA has not only expanded the U.S.-African trade relationship, but also diversified it. In that regard, "the early results from AGOA are encouraging," she said. And she explained: "During the first quarter of this year, U.S. imports from AGOA countries were up 24 percent compared to the same period last year. Some countries experienced staggering increases: Madagascar and Senegal were up 138 percent and 544 percent, respectively. For apparel, one of the key sectors covered by the law, imports, bolstered by new investments in the region, are up more than 30 percent. These dry numbers mean jobs and improved prospects for families in sub-Saharan Africa."

The U.S. trade official cited a number of countries where there are examples of progress made because of AGOA, including:

-- Madagascar, where the government and the private sector started planning for AGOA "years before its enactment." As a result, the country's exports of shirts to the United States so far this year have doubled. "It is estimated that orders from one U.S. company alone will create an additional 17,000 new manufacturing jobs for the Malagasy people this year, on top of the thousands of jobs and new factories that have already been established as a result of AGOA," Whitaker said.

-- Lesotho, which has attracted more than $120 million in new investment in one year, which is four times the foreign assistance the country received in 1999.

-- South Africa, where hundreds of millions of dollars in new trade and investment have been generated as a result of AGOA. South Africa is exporting in 18 different sectors under AGOA, including some steel products, apparel, and automobiles. "In fact, South Africa's clothing and textile association predicts that AGOA will create about 66,000 jobs in South Africa in the coming years," Whitaker said.

-- Kenya, another "leading success story" and the first to be approved for AGOA's apparel benefits. It has already attracted nine new foreign investors and its government now estimates that AGOA will generate some 200,000 new jobs. In addition to apparel, Kenya has realized expanded trade and investment under AGOA in leather, horticulture, and agricultural products.

-- Malawi, where apparel producers made shirts for a chain of 15,000 sandwich shops called "Subway" in the United States. This one order created 600 jobs in the country.

-- Mauritius, which has realized significant gains from AGOA and is even investing in other countries in the region.

-- Ghana, where a major U.S. agriculture firm is expanding its investment.

-- Cape Verde, where American interests have purchased a fish processing company.

These examples show that "AGOA is, therefore, more than an abstraction; it is a real opportunity," Whitaker concluded.