US Africa Trade on Exhibition at 8th Annual AGOA Forum

Posted by Motaroki on Sunday, August 2, 2009 at 2:38pm.

US - Africa trade is on exhibition this week at the 8th Annual Africa Growth Opportunity Act (AGOA) Forum in Nairobi, Kenya.

The Forum will bring  senior level delegations of Government including Secretary of State Hillary Clinton and Secretary of Agriculture Tom Vilsak;  Top US Private Sector Executives including Trevor Robertson - Vice President/Managing Director of Polo/Ralph Lauren Sourcing Co. Ltd and civil society participants together for meetings with their Sub-Saharan Africa(SSA) counterparts.

A key issue that will likely dominate the discussions is how to achieve the full potential of AGOA.  The legislation is a centerpiece of U.S. trade, aid and investment policy in Sub-Saharan Africa that provides for duty and quota free access to U.S. markets for specific products, especially textiles and apparels. In addition to market access provisions, AGOA provides for trade facilitation and technical assistance to African producers.

The AGOA Forum is an annual high-level event, mandated by the African Growth and Opportunity Act (AGOA) signed by President Clinton in May 2000.  The Forum allows officials from AGOA eligible countries and officials from the United States to review implementation of the African Growth and Opportunity Act, as well as chart new ways forward in building closer economic ties between the U.S. and sub-Saharan Africa.

The AGOA Initiative has been successful in increasing trade between Sub-Saharan African Countries and the United States partly evidenced by a $73 Billion increase in trade between 2001 and 2008.  However, despite several success stories in some countries, Africa has far from exploited the potential benefits that this legislation provides for.  If you look at the market of textile and apparel imports to the United States for example,  it is valued at $93 billion, of which qualified AGOA countries accounted for $1.1 billion.  That’s less than 1.5% of that segment alone.   A small Asian country like Bangladesh, exports $3.5 billion worth of textiles to the U.S.  That’s more than twice what all Sub-Saharan African Countries export in textiles to the same market.

Given these figures, it seems as though the real issues that should be on the Agenda are not about market access, but the lack of competitiveness by African Countries and how to improve on it.  It should include  improving structural issues like infrastructure and increasing the knowledge and capacity of African businesses that could potentially benefit from the trade advantages offered by AGOA.

This Forum will serve as an opportunity for US Government officials to articulate the Obama administration’s policy on US Africa trade and will allow for African businesses and other stakeholders to engage with US officials and private sector participants with a goal of increasing exports from AGOA countries to the US market.

For more information on the Forum visit their website here.

AfricaBusinessSource.com will continue to follow developments around the 8th Annual AGOA Forum as well provide more information on the legislation and the benefits it provides to US businesses in our Learning Center.