|
Get AfricaFocus Bulletin by e-mail!
Print this page
|
Note: This document is from the archive of the Africa Policy E-Journal, published
by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action
from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived
document may not work.
|
USA: Africa Trade Bills
USA: Africa Trade Bills
Date distributed (ymd): 991016
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+ +US policy focus+
Summary Contents:
This posting contains a slightly condensed version of the
executive summary of a new report by the Africa-America
Institute, reporting on an investigation of non-official
African views on U.S. trade initiatives (for the complete
executive summary and the full report see
http://www.aaionline.org).
Among other recent statements, with the Senate reported ready
to consider the trade bills shortly:
October 5, 1999:
Senator Feingold introduces Senate version of
an alternate trade bill (S. 1636, HOPE for Africa Act):
http://www.africanews.org/atlarge/stories/19991005_feat4.html
October 4, 1999:
Washington Office on Africa position paper on
The African Growth and Opportunity Act and the H.O.P.E. for
Africa Act:
http://www.woaafrica.org/AGOA.htm
+++++++++++++++++end profile++++++++++++++++++++++++++++++
The Africa-America Institute
African Perspectives on the Trade Bill:
A Sampling of Non-Official African Views on U.S. Trade
Initiatives toward Africa
For more information:
Bill Jackson, AAI's Director of
Government Relations and Policy, at (202) 667-5636; e-mail:
wjackson@aaionline.org. The full report is available on the
AAI web site (http://www.aaionline.org).
Executive Summary
Much of the debate in Congress over the African Growth and
Opportunity Act (AGOA) has revolved around whether the bill is
good for U.S. business and labor interests. Much less
attention has been paid to the bill's prospective impact in
Africa.
In an effort to inject some fresh African perspectives into
the debate, the Africa-America Institute organized a series of
focus group discussions in eight African countries and the
U.S. from June through August of 1999. The African
participants -- a diverse cross-section of businesspersons,
academics, and civil society leaders -- were asked to discuss
the major provisions and underlying themes of AGOA.
While there was no overall consensus on whether the bill
should be supported, the participants were virtually unanimous
on two points:
- Trade and investment initiatives for Africa will not succeed
without substantial investments in developing Africa's human
resources.
- Debt relief should be the highest priority of donor
countries seeking to promote African economic development.
Neither of these two points is inconsistent with AGOA, though
both suggest that expanded trade and investment alone will not
bolster African economic development.
Among other recurring themes in the sessions were: 1) that
U.S. policy should do more to promote regional economic
cooperation and integration in Africa; 2) that U.S.
policymakers should undertake broader and more regular
consultation with Africans, especially those representing
civil society; and 3) that AGOA's eligibility standards should
be refined to take into account differing levels of
development and should not be linked with IMF Structural
Adjustment conditions.
Background and Objectives
The past few years have seen an unprecedented focus, and
corresponding policy debate, on efforts to increase U.S. trade
with and investment in Africa. This is a significant departure
from the historical U.S. policy focus on promoting economic
development in Africa primarily via economic and humanitarian
assistance. The African Growth and Opportunity Act (AGOA) has
been at the center of this policy debate. Those who favor AGOA
point to the paradigm shift it represents, hailing it as a
more mature, more pragmatic U.S. approach to Africa. Those
opposed to the bill argue that it promotes U.S. business
interests at the expense of African economic growth and the
needs of Africa's poor.
In an attempt to address the question "Is AGOA good for
Africa?" the Africa-America Institute (AAI) organized a dozen
focus group discussions in eight African countries and the
U.S. involving a cross-section of African businesspersons,
academics, and community leaders. The objective was to elicit
fresh African perspectives on AGOA and its underlying
principles and to introduce these views into the U.S. policy
debate so as to enrich the discussion on the bill's purported
advantages and shortcomings.
AAI's intent was not to reach a consensus on whether AGOA
should be supported -- the number and diversity of the
participants made any such consensus improbable -- but to
identify some of the concerns Africans have about the bill and
to derive some recommendations for guiding this and future
U.S. initiatives on trade and investment.
Methodology
Focus group sessions were held in Kenya, Uganda, South Africa,
Nigeria, Mauritius, Madagascar, Ghana and Cote d'Ivoire. In
addition, sessions were held with African expatriates in
Washington, DC and Baton Rouge, Louisiana. AAI's field
representatives organized four of the Africa sessions; the
other four were carried out in partnership with local,
African-based non-governmental organizations. In all cases,
every effort was made to include a cross-section of informed
participants from the business, academic, and non-profit
communities. Altogether, well over a hundred Africans
participated in the project.
The recommended format, which was followed in most cases,
consisted of a moderated discussion involving 8-12
participants from diverse backgrounds on the themes underlying
recent U.S. trade initiatives for Africa. ... In order to
promote candor, names and institutional affiliations were
expunged from the public records of the proceedings. Summaries
of each focus group session are available on request.
Key Findings
The participants in the twelve focus group discussions were
virtually unanimous on two points:
Trade and investment initiatives for Africa will not succeed
without substantial investments in developing Africa's human
resources.
Debt relief should be the highest priority of donor countries
seeking to promote African economic development.
Neither of these two points is inconsistent with AGOA. The
first suggests that, in order to have the intended effect, the
enhanced market access and trade incentives provided for in
AGOA should be accompanied by public and private sector
investments in education, training, and professional
development. The second point suggests that, whatever AGOA's
fate, the willingness of the U.S. and other donor countries to
approve substantial debt relief for African countries is
crucially important to African economic prospects and that the
U.S. Congress should consider debt relief provisions either
along with or in place of AGOA.
The following additional observations or concerns were echoed
in two or more focus group sessions:
U.S. trade and investment initiatives should support, or at
least not undermine, efforts toward regional economic
cooperation and integration on the continent. Some
participants believed that, as currently written, AGOA works
at cross-purposes with regional integration by promoting
bilateral trade agreements between the U.S. and individual
African countries.
The U.S. should broaden and formalize the processes by which
it consults with Africans about policies affecting them. Many
participants viewed the March 1999 African ministerial meeting
in Washington, DC as a step in the right direction. However,
it was also felt that greater efforts should be made to
solicit the input of civil society organizations.
Eligibility standards for prospective trade benefits should be
structured to take into account the varying levels of
development in different African countries and to encourage
step-by-step progress toward democratic and economic reform.
While most participants supported some type of conditionality
attached to the trade benefits, many were skeptical of the
wisdom of linking the bill with IMF structural adjustment
policies. There was also a widespread view that past
implementation of conditionality standards had been uneven
and, in many cases, counterproductive.
Overview of the Focus Group Discussions
The sessions typically began with a general review and
discussion of past American policy toward Africa and the
current global and African environment in which AGOA is being
considered.
Capacity-building: Most participants were of the view that
present parameters defining the global economy prevent most
African countries from taking advantage of increasing global
market opportunities. ...
Stepping Up Debt-relief Efforts: A participant in the Kenyan
focus-group session declared that "any discussion of
development in Africa that does not decisively deal with the
debt crisis will come to naught just like so many others
before it as 80% of Africa's export earnings is spent on debt
service." ...
Partnerships Designed to Empower Africans: Most sessions were
unanimous in calling for a change in U.S.-Africa policy
initiatives from "foreign assistance designed to help
Africans" to "partnerships designed to empower Africans." ...
Monitoring Trade and Aid Initiatives: A U.S.-based participant
observed that donor groups and African governments alike have
manipulated conditionalities in the past to advance their own
interests without regard to whether actual progress toward
democratic and economic reform was being achieved. Most
sessions recommended that both Africans and donor groups
intensify their commitment to monitoring the impact of future
trade and aid initiatives and that economic assistance and
development programs ought to be designed based on a critical
examination of individual countries' particular development
status. Participants in the South African forum asserted that
externally defined conditions are incompatible with the notion
of partnership. They suggested that the U.S. would do well to
follow the example of the recent European Union-South Africa
trade agreement, in which the conditionalities were the result
of consultations and mutual agreement.
The African Growth and Opportunity Act
Participants had mixed reactions to the African Growth and
Opportunity Act. Those favoring the bill saw it as presenting
a new opportunity for Africa in private sector trade and
investment. Supporters also argued that the bill would expand
and renew the Generalized System of Preferences program for
eligible African countries, increase women's input in growth
and development, and promote democracy and good governance
within sub-Saharan Africa. The shortcomings of the bill cited
most frequently included lack of consultation with African
civil society; the primacy it would give to the market and to
profits; inadequate support for debt relief initiatives;
potential disruption of regional integration; possible
shrinkage of social capital investment; and unrealistic or
ill-advised eligibility standards.
Opportunities
New Opportunity for Africa: The Ugandan session found the AGOA
bill a new, albeit limited opportunity for Africa to engage
and negotiate with the U.S. on how to combat the development
crisis facing the continent. Some forums lauded those
responsible for advancing the bill -- including the African
diplomatic corps, pro-free trade Republicans, pro-Africa
members of Congress, the Clinton Administration, and African
and U.S. private sector groups -- for their efforts and
commitment to shaping a new U.S. approach toward Africa.
Private Sector Trade and Investment: The Mauritius discussion
cited OPIC's establishment of $500 million and $150 million
funds -- for infrastructure and equity respectively -- as
major elements of AGOA that would expand opportunities for
private sector trade and investment. A U.S.-based participant
added that some of the eligibility requirements might
stimulate African governments to enact economic policy
measures that would liberalize product and financial markets
and foster private sector empowerment.
GSP Provisions and the Textile Industry: The bill's textile
and apparel provisions and its proposed expansion and renewal
of the GSP were frequently cited favorably. However, some
noted that only a few countries, mainly Kenya and Mauritius,
would likely be able to take advantage of the textile benefits
offered in AGOA. ...
Importance of Women in Growth and Development: One of the two
sessions in Ghana expressed support for the bill because "it
makes provisions for U.S. organizations and institutions to
support projects that encourage and support women
entrepreneurs." Other forums, including the one in Nigeria,
cited the importance of creating more windows of opportunity
for women's involvement in growth and development in
sub-Saharan Africa.
Democracy and Good Governance: Some participants in a
U.S.-based forum felt that conditions enumerated in the bill
may stimulate governments to promote accountability and
transparency in governance, enhance the protection of
individual human rights, encourage environmental protection
efforts, and adopt international labor standards. The
Mauritius forum lauded the bill's good governance provisions,
noting that they were written in such a way as to promote
gradual improvement in a step-by-step process.
Rerservations
Lack of Consultation: The Uganda forum expressed the view that
AGOA reflects an inadequate knowledge about Africa among U.S.
policymakers and a lack of prior consultation with African
civil society. Participants in the forum remarked that the
bill, like past U.S. policy initiatives, uses findings and
analysis of the African situation based largely on misinformed
American perceptions and a shallow understanding of Africa
formed from a distance. This paternalistic outlook, as one
participant in a U.S. forum put it, contradicts the stated
objective of changing past U.S. attitudes toward sub-Saharan
Africa.
Primacy of the Market and Profits: Participants in the Kenyan
forum were wary of the primacy the bill gives to the market
and profits over the needs of the people and their rights.
This raised the suspicion among some of them that AGOA
"represents the mere use of legislation to secure [for the
U.S.] an African market for so long dominated by Europe." Many
sessions pointed out that the bill risks increasing the trade
imbalance in favor of developed nations because the current
global market system is skewed against countries -- like many
of those in Africa -- that are reliant on exports of raw
materials.
Unbalanced Private and Public Sector Development: A Kenyan
participant pointed out that the bill asks African governments
to play a diminishing role in the economic affairs of their
countries while at the same time pushing for more private
sector involvement. The discussion in Cote d'Ivoire noted that
government has a central role to play, especially in providing
assistance to critical social sectors like education and
health. The Mauritius discussion proposed that, "development
in the public sector should accompany development in the
private sector," so that the two sectors balance and
complement each other.
Inadequate Support for Debt Relief Initiatives: Virtually
every session underscored the bill's lack of significant debt
relief measures. One U.S.-based participant acknowledged that
AGOA was intended as a trade bill not a debt relief bill, but
went on to assert that under current circumstances debt relief
should be a higher priority than trade promotion. The Nigerian
forum called for more specific provisions for either forgiving
or postponing debt as a matter of urgency for sub-Saharan
Africa. In critiquing the bill's debt relief efforts, the
Kenyan forum remarked that it links debt relief to the very
complicated and slow procedures stipulated by the IMF and the
World Bank.
Disruptive to Regional Integration: Participants in the
Ugandan forum expressed the fear that moves to establish Free
Trade Areas with sub-Saharan African countries would be
"selective and disruptive" to African regional initiatives
already underway and reflected a colonial-era "divide and
rule" approach. The Mauritius forum pointed out that current
regional initiatives in Africa such as EAC, COMESA, and SADC,
are barely managing to grow and develop. The Kenyan session
remarked that "it would make more sense if the US sought to
strengthen these existing regional groupings rather than
seeking the establishment of new ones." This view was echoed
in the South African forum, where there was concern that the
bill might work at cross-purposes with efforts to strengthen
economic integration in SADC.
Shrinks Investment in Social Capital: Some forums noted that
AGOA prescribes cuts in domestic spending and corporate taxes
that will significantly reduce the revenue base of African
governments, leading to reduced investment in the development
of social capital and poverty eradication schemes. Several
participants expressed the fear that the bill may cause
African governments to phase out educational and other social
development programs, which, in the long run, will have a
harmful effect on education, especially of young women.
Agriculture and Food Security Concerns: The Kenyan forum noted
that the bill urges unilateral removal of subsidies and market
safeguards aimed at protecting and stabilizing local
agricultural production, the backbone of most sub-Saharan
African economies. This would likely reduce agricultural
output within Africa and increase the dumping of U.S. exports
on the African market, thus undermining the efforts of local
African entrepreneurs.
Eligibility Standards Too Restrictive: Some participants,
notably those in Madagascar, Mauritius, and South Africa, were
concerned that some of the eligibility standards under AGOA --
such as the protection of intellectual property rights,
improvements in labeling and certification standards,
eliminating corruption, and pursuit of WTO membership -- would
disqualify the majority of sub-Saharan African countries. One
U.S.-based participant asserted that no more than a handful of
African countries would ultimately benefit from the bill and,
in view of this asked "what then is left for the vast majority
of poor African countries?"
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC's primary
objective is to widen the policy debate in the United States
around African issues and the U.S. role in Africa, by
concentrating on providing accessible policy-relevant
information and analysis usable by a wide range of groups and
individuals.
|
