Topics publications: Global trade governance
Trade Reports
AGOA at 10: Reflections on US-Africa trade with a focus on SACU countries
The African Growth and Opportunity Act (AGOA) has formed the basis for preferential US-African trade over the past decade. However, AGOA is about more than just trade, but represents a policy framework covering issues such as the development of trade capacity, general development assistance, investment, healthcare assistance and security-related cooperation. Trade remains an important focal point, however: since inception, US policy has taken the approach that export-led growth would play a key role in assisting Africa’s development. A slight change in emphasis was expressed by US Secretary of State Hilary Clinton and other officials when addressing the 9th AGOA Forum in Nairobi last year, where the importance of regional trade and the removal of regional trade barriers were repeatedly highlighted. This stance was reinforced at the 10th AGOA Forum held recently in Washington.
Midway through 2003, the countries of the Southern African Customs Union (SACU) began negotiations with the US for a Free Trade Area (FTA). These were intended to be concluded within 18 months, but were postponed indefinitely a year later as a result of widely divergent views on the scale and scope of the proposed agreement. In July 2008, SACU and the US then signed a Trade, Investment, and Development Cooperative Agreement (TIDCA) whose stated objective was to ‘promote an attractive investment climate and to expand and diversify trade between SACU and the United States’. The TIDCA established a platform for bilateral consultations on a range of trade issues, including trade facilitation, technical barriers to trade, and trade and investment promotion, but also to act as a stepping stone for a future SACU-US FTA. This remained a longer term objective for both negotiating parties, and new signals are emerging that this issue may soon be revisited more formally. In the meantime, South African officials have been reported as favouring an extension of AGOA and South Africa’s continued participation and eligibility under AGOA.
Given recent legislative proposals, there appears to be some consolidation in US policy on preferential trade. Some of this legislation has originated in the House of Representatives – one of the two chambers of Congress – while similar reform proposals are expected in the Senate shortly. Proposed changes to the AGOA legislation include an extension to 2019 (and beyond, subject to conditions). Aspects of the proposed legislation could pose a serious threat to Africa’s exports to the US and would for the post-2015 period see a number of high-profile countries lose their eligibility status under the Act. Also included is an extension of trade preferences to other least-developed countries (such as Bangladesh and Cambodia) through an extension of the US GSP, which would erode current AGOA preferences especially in the critical textile sector.
This paper provides an overview of the current AGOA legislation and tracks legislative amendments over its first decade. This is followed by an analysis of African exports to the US, with a more detailed focus on three sample sectors (the automotive sector, the clothing manufacturing sector and the fruit and fruit juice sector) that benefit from AGOA and which are of relevance to SACU. A review of trade between SACU member states and the US (bi-directional) reveals that most SACU exports enter the US duty-free (mostly under AGOA, but also in other duty-free categories), whereas SACU imports from the US are still to a significant extent subject to tariff barriers. The paper concludes by reviewing the proposed legislative amendments that are currently being considered by the US Congress, some of which are likely to have a significant impact on current recipients of AGOA preferences.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Books
The World Trade Organisation: an African Perspective, more than a decade later
The current Round of trade negotiations is the first ‘Development Round’. Given the challenges of addressing development issues in the context of trade negotiations in the WTO which is not a development institution it should not be surprising that the current negotiations are proving extremely difficult.
The WTO remains however the core of the rules-based system of international trade governance providing also the rules for RTAs that are still growing rapidly both in number and in scope and coverage.
The WTO was established in 1995 as the institutional anchor of the multilateral trading system. Since then significant developments have taken place on the trade agenda as well as in the participation of developing countries in the WTO.
This collection of papers provides an African perspective on the first decade of the WTO. Substantive trade issues such as agriculture remain despite their declining importance in terms of overall economic activity even in African countries of key importance to Africa.
Key issues on the agriculture agenda are not addressed on the Regional Trade Arrangement (RTA) agenda and so the WTO remains the only forum within which to address these. Africa is still engaging at the margins of the international economy and this collection of papers explores some of the challenges as well as prospects for Africa within the WTO.
© 2009 Trade Law Centre for Southern Africa
Publication of this book was made possible by the support of the Trade Law Centre (tralac) and the Swedish International Development Cooperation Agency (Sida). The views expressed by the authors are not necessarily the view of any of these institutions.
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Trade Reports
The ability of select sub-Saharan African countries to utilise TRIPs Flexibilities and Competition Law to ensure a sustainable supply of essential medicines: A study of producing and importing countries
The impact of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) on access to essential medicines in the developing world is an issue that has gripped stakeholders for years. The landmark Doha Declaration on TRIPs and Public Health, the 30 August Agreement of the WTO General Council (2003), and most recently, the December 2005 Decision of the TRIPs Council to permanently amend Article 31 of TRIPs, have increased the legal certainty on flexibilities available to developing countries. These developments have been criticised as remaining insufficient to address concerns about drug prices, and consequently, increased access to treatment for the poor. Instead of focusing on the debate above, this paper examines the degree to which countries in eastern and southern African have utilised the flexibilities contained in the 30 August Agreement to increase access to treatment in their countries. Three countries were chosen for their diversity in pharmaceutical manufacturing capacity and developmental status: South Africa, Kenya and Zambia.
The paper further examines the use of competition law and policy as a tool for reducing prices and consequently increasing access to essential medicines and points out the advantages to developing countries of using competition law and policy: first, the TRIPs Agreement accords member countries considerable flexibility in implementing competition law and policy most appropriate for its purposes; second, countries have leeway to define what constitutes anti-competitive behaviour; third, competition law and policy is well suited to implementation by an independent competition authority vested with strong investigative powers; and finally, competition law and policy has been successfully employed by South African activists and stakeholders to reduce the prices of essential medicines.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
Textiles and clothing: Reflections on the sector integration into the post-quota environment
Quotas to restrict imports of textiles and clothing into developed countries, notably Europe and the United States, have been in place for at least the past four decades. During the early phases of quotas these were imposed arbitrarily by importing countries, without any kind of formal structure or explicit multinational agreement and coordination.
This paper tracks developments of the global textile and clothing quota regime from its early stages in the 1960s to the final integration of the sector into world trade on 1 January 2005. This is followed by a brief analysis of trends in textile and clothing trade, focusing on key markets in general, and that of the United States in particular, while highlighting the importance of the sector for developing countries. With the Agreement on Textiles and Clothing (ATC) likely to cause substantial shifts in both trade and production within the sector, with a resultant range of economic impacts, the paper concludes by outlining key outcomes that can be expected in the post-quota environment.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.