The African Union Commission (AUC) says African countries do not need the Africa Growth and Opportunity Act (AGOA), signed with the United States (US).
The AGOA is a non-reciprocal trade preference programme that provides duty-free treatment to US imports of certain products from eligible sub-Saharan African countries.
However, Fatima Haram Acyl, the Commissioner of Trade and Industry at the AUC says Africa does not need AGOA, because the continent can’t compete with Asian countries.
Acyl pointed out that while the entire textiles export value of African countries to the US under AGOA amounts to $1 billion Vietnam alone exports $20 billion worth to the US.
Addressing journalists at The African Editors’ Forum meeting, a side event at the 27th African Union Summit in Kigali, Rwanda to discuss how the media in Africa can help to popularise the AU’s Agenda 2063, she said the US is negotiating with Asian countries to remove taxes on textile exports.
Clarifying later in an interview with ghanabusinessnews.com, Acyl said, even without taxes, if Vietnam alone is exporting $20 billion worth of textiles, and African countries, together export $1 billion worth of textiles, if all Asian countries including Bangladesh, begin to export textiles to the US tax-free, Africa would stand no chance.
On October 25, 2011, President Barack Obama signed a presidential proclamation designating Côte d’Ivoire, Guinea and Niger as eligible for AGOA benefits, and subsequently increasing the number of sub-Saharan African countries eligible to trade under AGOA to 40. As of June 2011, there were 37 countries.
AGOA was initially enacted on May 18, 2000 until 2008, but was amended in 2004 to expire in 2015 to allow increased market access to the eligible sub-Saharan African countries to export approximately 7000 product lines to the US market.
On Thursday, June 11, 2015, the US Congress renewed the Act for another 10 years, according to information accessed by ghanabusinessnews.com. The trade agreement will end in 2025.
An overwhelming 392 against 32 of members of Congress voted for the renewal, indicating a bipartisan endorsement of AGOA.
Despite being a major trade policy for the US, beneficiary countries have not been able to take advantage of such a policy to drive economic growth. In a May 2015 article by Madjie Simon, the Executive Secretary of the American Chamber of Commerce in Ghana, countries like Kenya, Lesotho and Mauritius provide the bulk of apparel exports under the programme. According to Simon, in 2014, Kenya exported $423 million worth of apparel to the US under AGOA, Lesotho, $289 million; Mauritius, $227 million and Swaziland, $77 million.
By Emmanuel K. Dogbevi
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