Building capacity to help Africa trade better

African Growth and Opportunity Act (AGOA) Forum: preview


African Growth and Opportunity Act (AGOA) Forum: preview

African Growth and Opportunity Act (AGOA) Forum: preview
Photo credit: Breezy Baldwin | Flickr

Transcript from an Africa Regional Media Hub press briefing with Mr. Peter Henry Barlerin, Deputy Assistant Secretary: Bureau of African Affairs, and Ms. Constance A. Hamilton, Acting Assistant U.S. Trade Representative for Africa, held via teleconference in Washington, DC on 3 August 2017

Mr. Barlerin: I just want to start out with a little story. When I was a kid, I spent a couple of years with my parents in Iran, where my dad worked for the U.S. Agency for International Development. There was a period when he had work colleagues visiting from the United States, and one Sunday, my parents took them to shop for Persian carpets, which one did in Iran. Before they went out, my dad typed on a piece of paper, “Made in China,” and he cut it out, and when they got to the store, he secretly taped that piece of paper to the bottom of the corner of the rug on top of the pile of rugs, as a joke. And of course, the first thing his colleague found when he turned over the corner of the rug was that little slip of paper.

Now, everyone thought that was funny because “Made in China” back then, in those days, was synonymous with low-quality stuff. Of course, China has transformed itself in the course of two generations into the second-largest economy in the world. It is a colossal exporter, not only to the United States. And I’ve heard from people who have been to Iran lately that many of the carpets sold in the bazaars are now, in fact, made in China.

The point of my story is that trade is transformative, and can often be non-linear, but there’s nothing automatic about it. People have to make it happen. We have the vision that trade can transform Africa. We want a stronger Africa, to help make a stronger United States. The Africa Growth and Opportunity Act remains one way to help us get there. As many of you already know, U.S. Trade Representative Robert Lighthizer will be leading a robust U.S. delegation to the 2017 AGOA Forum, scheduled for August 8th to 10th in Lomé, Togo. We are expecting this year’s AGOA Forum to be one of the best ever, thanks in large measure to the planning and preparation by the Togolese authorities, working closely with U.S. Ambassador Dave Gilmour and his team in Lomé.

The Africa Growth and Opportunity Act mandates that we convene an annual U.S./sub-Saharan Africa trade and economic cooperation forum, known as the AGOA Forum, in order to foster closer economic ties between the United States and qualifying African countries. This year’s ministerial theme is Partnering for Prosperity through Trade. And, as in the past, this ministerial will consist of several plenary sessions on the future of U.S.-Africa trade and economic cooperation, as well as breakout sessions that will promote improved trade practices.

As encouraged by AGOA legislation, civil society and private sector stakeholders from the United States, Togo, and other AGOA-eligible countries will convene meetings in conjunction with the ministerial forum on August 8th. Representatives of these groups will deliver readouts on the first day of the ministerial. The AGOA Civil Society Network is coordinating with the West Africa chapter of the Africa Women’s Entrepreneurship Program, or AWEP, to organize this year’s civil society program, which will host its main side event on August 8th at Lomé’s recently reopened and renovated, beautiful Radisson Blue Hotel. Government officials will be invited to speak on panels and are welcome to attend.

Consistent with AGOA provisions that encourage the integration of women in the AGOA Forum, the AWEP Togo chapter, in collaboration with U.S. Embassy Lomé, is working to encourage AWEP members across Africa to participate in that civil society forum. As background, AWEP began in 2010 as an international visitor’s leadership program on the margins of the 2010 AGOA Forum in Washington, and has since grown to a network of hundreds of women entrepreneurs from across Africa. The Corporate Council on Africa is working with EcoBank to organize the AGOA Forum private sector dialogue on enhancing U.S.-Africa trade and investment, on August 8th as well, also at the Radisson Blue. And our expectation, based on what we know of CCA, is that this dialogue will be dynamic and forward-looking.

Finally, I’d like to highlight the Trade and Investment Hubs run by USAID, and for this AGOA Forum, particularly the one based in Accra, Ghana. These Trade and Investment Hubs are a way to empower and enable increased two-way trade and investment, as are our ambassadors and economic officers and our U.S. Department of Commerce Foreign Commercial Service Officers, where they are present. I’ll turn things over to my friend and colleague – as I said, the real AGOA expert – USTR Acting Assistant U.S. Trade Representative for Africa, Connie Hamilton, but I’d just like to close by saying how excited we are to be going to Togo and that we continue to see a bright future for the continent.

Ms. Hamilton: Thank you, Peter, and thank you David, and thank you all for joining us. Good morning and good afternoon, wherever you happen to be. It’s my pleasure to talk to you today about the AGOA Forum. As Peter said, planning for this event has been underway for some time. I was recently in Lomé, where I met with the planning team and the [UNCLEAR] working to put on one of the best AGOA Forums ever. They are very focused on making sure that this is a great event. I think the delegates are going to find it a very, very productive two or three days in Lomé. The AGOA Forum provides an opportunity for American and African government officials, civil society, and business to establish and promote stronger economic ties between the United States and sub-Saharan Africa. The Act requires that we do this event annually, and we alternate between the United States and an AGOA beneficiary nation. We are very glad and very proud that Togo has offered to host this year’s event.

The AGOA Forum is designed to encourage the participation of a diversion group of stakeholders. We look forward to having robust conversations and discussions about promoting sustainable economic growth and trade. The forum also provides a venue for discussion between our respective governments on trade and investment matters. This year’s forum will consist of a two-day ministerial, preceded by civil society and private sector and AWEP. And as Peter has said, the delegation will be led by the U.S. Trade Representative Robert Lighthizer. At the forum, he will outline the administration’s trade policy approach to Africa generally, and to the sub-Saharan African region specifically. We expect that he will stress both the Trump administration’s interest in deepening our trade relationship with the continent, as well as his expectation that our African partners will engage in fair trade, eliminate barriers to U.S. export, and abide by the eligibility criteria of the AGOA program. He is looking forward to meeting with his commerce and trade counterparts and to forging long-term relationships.

Let me tell you briefly a few of the topics that are going to come up at the forum. The first plenary that Ambassador Lighthizer will co-chair will talk about the U.S./sub-Saharan Africa trade and investment relationship. We have a plenary with representatives from Congress; staffers are going to talk about their views on that relationship. We have another plenary that my friend Peter Barlerin is going to co-host on the role of AGOA in U.S.-African cooperation, and some of the topics that we’ll cover in the breakout and workshops are: regional integration, trade and labor, women and trade, logistics and transportation, investment, agriculture, agro-business and land reform, the Trade Facilitation Act of the WTO, public health and trade, biotechnology to address food security, and gas-fired power solutions and intellectual property protection. So we expect to have a very dynamic three days in Lomé, and we look forward to hearing your questions.

Question (Kevin Kelly –The Nation Media): To what extent do you think the Trump administration will put emphasis on the reciprocity of trade under AGOA? And, specifically, in that regard, I attended a recent public hearing in Washington about the possible out-of-cycle AGOA review for Rwanda, Uganda, and Tanzania, over a controversy involving those three countries’ move to ban imports of secondhand used clothing, from the United States. There was discussion that this is unfair to U.S. employers – U.S. traders – because they’re not allowed to reap the benefits that AGOA’s supposed to provide the United States as well. So I’d like you to comment on that, specifically, and more generally on the issue of possible increased emphasis on reciprocity. Thanks a lot.

Ms. Hamilton: Let me just say about the out-of-cycle review, I was actually chair of that hearing, and we are the ones that accepted the petition from the SMART Association which filed the petition, alleging that there were challenges with the East African countries banning used clothing and used footwear imports into their countries. And let’s be very clear: AGOA has two pages of eligibility criteria, and we have always – whether we were under the Bush administration, or the Clinton administration, or the Obama administration – we have always been enforcing the criteria. The fact that we accepted this petition under the Trump administration, I won’t think that it means we’re any harder on countries, I think it just says that we continue to respect the criteria and Congress’ intent that countries abide by the criteria if they’re going to get the wonderful benefits that are provided under AGOA. And so we’re still looking at that issue, we don’t know how it’s going to turn out. The hearing was just one of the first steps in gathering information to determine whether or not the allegations in the petition were true or false, and we’ll continue working on that issue.

But in terms of reciprocity, AGOA is a preference program. It is a unilateral, one-way preference program. It does not demand reciprocity from the countries that benefit. So we do believe that in the long term, preferences alone are not going to stimulate the kind of economic growth that we want to see on the continent. And so we encourage countries to think about doing more with us, and thinking on their own about reciprocity with the United States and how that can help move their growth forward.

Question (Lesley Rawson – Reuters): My question generally, the AGOA was renewed – and this is obviously a review of where it stands – do you see any changes coming about – I think that’s the big question – even though it stands, and it’s, you know, a trade agreement, is there any opportunity for the Trump administration to change it, expand it? There are some discussions about expanding it to other countries in the rest of Africa.

Ms. Hamilton: AGOA right now is specifically for sub-Saharan Africa. And so I don’t see that changing anytime soon. In terms of the renewing or changing provisions of AGOA, it is extended to 2025. We have eight more years acting under it the way it is now. I don’t think that Congress or anyone else is talking about renewing it now, I have not heard that.

Or updating it. I think that we are going to keep going forward. There may be moves to do that later on, but that’s still eight years away. But right now we are continuing along with what was done the last time when it was renewed in 2015, the changes that were made. And there were some changes to it, especially in terms of the flexibility that the administration can use in dealing with problems, so that instead of taking the country out of AGOA completely, we have the flexibility to maybe modify some of their benefits or withdraw certain benefits so that they’re still in AGOA, they can still benefit, they can continue to work towards addressing those concerns. But right now, there’s nothing on the table about changing or renewing or changing the provisions of AGOA. That could change, but not right now.

Question: Thank you. Which basically says that the relationship would remain the same between U.S. and Africa. Is there not any kind of thinking going on of changing that relationship under a new administration who sees trade as something different?

Ms. Hamilton: Are we talking about reciprocity? I think that we’ve always said that building towards a more reciprocal relationship was in the best interest of both United States and African countries, but we want countries to be ready to do that. We’re not demanding FTA’s, we’re simply saying that when countries are ready and want to approach us with doing more, we welcome that. We welcome that conversation. But right now, we’re not changing AGOA into a two-way, sort of asking for reciprocity from the beneficiaries of the program. That’s not what AGOA was set up to do. It’s a preference program that was set up to provide unilateral, one-way trade preferences to promote the trade and growth of Africa.

Now, if I could just say one more thing. Ambassador Lighthizer will be there, he’s the new USTR, but he has a lot of depth and understanding of trade relationships. He’s going to be talking to African Ministers, he’s going to be talking to the heads of regional organizations, and he’s going to learn a lot about their concerns about the existing AGOA and hear recommendations about what we do next in the future. And he’ll consider all of that.

Mr. Barlerin: Yeah, Lesley, I’ll just add this, you know, that with negotiating free trade agreements, they’re much more desirable than these trade preference arrangements, to the other countries, to sub-Saharan Africa or other countries that are beneficiaries of this, but these come with disciplines, and some of these countries with whom we are contemplating entering into negotiations are not at the stage right now where they’re ready to enter into those disciplines.

Question (J Brooks Spector – Daily Maverick): Given the Trump administration’s clear preference for bilateral, reciprocal trade agreements rather than multilateral or, in this case, as you say, unilateral accommodations under AGOA, and given the fact that there is less than 10 years left to run on this current version of AGOA, and the likelihood of a further renewal recedes further and further away, and given, further, the fact that bilateral trade agreements, by their very nature, take a long time to negotiate and then ratify, when do you believe it will begin to be clear that bilateral trade agreements are going to have to be proposed, negotiated, and agreed to between African nations and the U.S.? And just in parentheses, some years back, the Southern African-U.S. Free Trade Agreement negotiations, if you’ll recall, collapsed and never really got started, in part because there was disagreement among the African partners. And this is for both panelists, obviously.

Ms. Hamilton: If I can just say, I think that one of the reasons that FTA negotiations were put on hold or suspended; we had just also renewed AGOA to 2015. We were doing those negotiations around the time of 2008, and when the announcement came out that we were going to extend AGOA to 2015, I think it took away from the incentive for countries to sit down and do what they needed to do under an FTA. So I don’t think it was completely because of a lack of interest in doing it, but I do think that when AGOA offers benefits that are very much like an FTA, and because they are unilateral and they don’t require more than following the eligibility criteria, I think sometimes the incentive when you have such a broad-based preference program, to do more, it’s not always fair.

But I do think that there are a number of countries that are looking at this relationship in terms of what we’re doing with other regions in the world, and believing that, you know, they have to do more with us if they want to get more out of the relationship and trade. And so I’m not pessimistic that countries will not approach us for an FTA, but when they do, again, you know, the process for that in Congress – there are a lot of steps before an FTA is actually initiated. But we will look forward to that conversation.

Question (Simon Ativa): Thank you, good morning. Yesterday the Mandela Fellowship Summit has concluded in Washington, D.C. without any word from President Trump, and we’re concerned by [UNCLEAR] about [UNCLEAR] in Africa that America is retreating from Africa. Do you think that Africa is a priority under President Trump? And also, we have China that is expanding investment ties with the African continent. Is America trying to have a plan to, you know, counter the China expansion of trade in Africa? Thank you.

Mr. Barlerin: Thank you for that, Simon. We were gratified to have these thousand young African leaders come for the Mandela African Fellowship, and I spoke and met with a number of them. And we can’t say for sure what happens going forward. I suspect that the number next year will be reduced, but that the program – for next year, at least – will go forward. Africa is a priority for the Administration. Africa is a priority for the U.S. government and for the American people. We have a strong history of bipartisan support in both houses of Congress for strong relations with Africa. So I don’t see that changing in any material way.

As far as China and Africa goes, our position has been that we cooperate with China in a number of areas. I think about the Ebola crisis of 2014, where China sent medical workers and doctors to help with Liberia, Sierra Leone, and Guinea. And they’ve helped us with setting up the African Centers for Disease Control under the African Union, they send peacekeepers to South Sudan and other parts, and there are U.S. companies that compete with China in sub-Saharan Africa but also sell capital equipment and other services to Chinese infrastructure projects, for example. So there’s a combination of competition and complementarity, I guess I would say. And so we look at any other country or region that’s interested in sub-Saharan Africa, as long as they conduct themselves in a transparent manner, and the African governments and companies working with other third parties go into things with their eyes open. And we look at that as a good thing. Hope that’s helpful.

Question (Kevin Kelly): So just following up on my earlier question regarding the out-of-cycle review of Rwanda, Tanzania, and Uganda over the secondhand clothing controversy. It’s a difficult issue, so can you speak about the thinking behind the need to balance encouraging an African textile industry, which is the rationale for this ban, versus the AGOA criteria, which say that the countries in Africa need to be open to U.S. exports – to importing products from the United States? Those two considerations are maybe somewhat contradictory. Can you speak to that, please? Thanks.

Ms. Hamilton: This is Connie. I’m not sure that I agree with you that they’re contradictory. I do believe that used clothing and new clothing can exist side-by-side. One of the things that we were telling the countries of the EAC is that the AGOA criteria is very clear about not putting in place bans or restrictions on U.S. products. That’s just one of the criteria. We’re giving you this advantage to build your apparel sector. As you know, AGOA allows for third country fabric from any place in the world for African countries to produce clothing to send to the United States, and we encourage that. That’s what AGOA’s about, and one of its biggest successes has been in the apparel sector. So for countries to say that they’re not going to allow this product, which is a legal product, to come in from – there are like 40,000 people employed in the used clothing sector in the United States – these are mainly in small mom and pop – which we mean very small organizations, maybe three or four employees at a time – and they’re losing market share, they’re losing their profits because of this ban that’s already taken place, even though it’s just getting phased in. The tariff increases and some of the regulatory restrictions that have been put on this product means that they’re definitely losing market share and losing profit. So what we’re saying to the countries of the EAC is, we welcome you to use AGOA to the fullest, but please do not ban a legitimate American product and hurt U.S. citizens and companies and our employment on the backs of that.

And so that’s why we accepted the petition. As I said, we’re still looking at it. We do believe that the argument that the EAC makes, that used clothing is stifling their ability to grow their local industry, is just not supported by the data or the research. We do believe that these things can exist side-by-side, and we encourage the EAC to look at some of that research and go back and revisit this ban before we have to make a final decision on what we’re going to do as a result of the petition.

Moderator: Okay, I’m going to read a question that’s come in from Zambia. Actually, so there are two questions. Has AGOA been a win-win program for the U.S. and Africa, and what is the concern that the current President of the United States would abandon AGOA? Is there a concern?

Ms. Hamilton: There’s no concern that the President of the United States will abandon AGOA. Full stop. In terms of win-win, we do believe that in terms of the imports that come into the United States from AGOA countries, we think that that helps our consumers here. We also think that the fact that AGOA helps countries grow and develop, it presents larger markets for the United States businesses and farmers, and producers who can sell their products on the African continent. So I actually think it is a win-win.

Mr. Barlerin: Yeah, I guess I would just say that, you know, AGOA has been good, and we would like it to be better. We would like more countries to take advantage of the trade preferences that have been so generously offered. And again, a lot of what we do through the U.S. Agency for International Development’s trade hubs in Accra, in Nairobi, in Johannesburg, is to try to encourage potential exporters to U.S. markets to take advantage of these opportunities, and, more broadly, to benefit from AGOA.

Question (Kelly): Okay, thanks again, I really appreciate having the third follow-up here. So for Ms. Hamilton – thanks for all your other responses, they’re very helpful – but one final thing. It sounds as though you’re inclined to say that the EAC out-of-cycle review should take place, based on the way you’re framing their approach towards the AGOA criteria. Can you give me a timetable for when a definitive decision might be made by USTR, and then what the process would be, what the next steps would be? Would it get to the point where the EAC – the three countries – are ruled ineligible for participation in AGOA? Thanks again.

Ms. Hamilton: Thank you for the question. Actually, we expect to have a decision on this sort of [UNCLEAR] regular AGOA annual review, which is also taking place right now, and we expect to end by the end of the year. So we expect to move forward with the out-of-cycle review along that same timetable.

In terms of taking these countries out of AGOA, as I said, the fact that we now have the flexibility to address certain areas of eligibility means that we don’t have to take out Rwanda or Tanzania or Uganda from AGOA completely. We could take away, for example, their apparel benefits. We could take away some other benefit. So there are things, and we’ll look at all of those things as we continue to move forward with this process, if we get to that point, where we’re looking for actions to take because we have not resolved this issue.

But as I’ve stressed to the governments of these countries and as I would like to make very clear on this call, we want to resolve this issue before we get to that point. We want to make sure we’ve made it very clear our concerns, we’re asking the countries to find a workaround so that we can address this issue, so that we don’t have to do things that are going to take benefits away from countries that are using them and benefiting from them and helping their apparel sectors grow currently.

Read the full transcript here.

Visit AGOA.info for further information about the 2017 AGOA Forum.


Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010