| |
AGOA Successes and Challenges in Target Sectors
Alan Larson,
Under Secretary for Economic, Business, and Agricultural Affairs Remarks at the 2003 Private Sector Session of the AGOA Forum J.W. Marriott Hotel, Washington, DC December 8, 2003(As prepared)
Good morning. I am very glad to be here to participate in this plenary session on "Successes and Challenges in Textiles, Handicrafts and Agribusiness and attracting SMEs".
I just came from the AGOA [African Growth and Opportunity Act] Civil Society Forum, where I discussed how the government and NGOs [non-governmental organizations] can work cooperatively to achieve our common goals. My message to the NGOs is the same as it is here: we all have a role to play in the success of AGOA and Africa's future.
This Administration is committed at the highest levels to help Africa realize its full potential. As you know, AGOA is the centerpiece, but not our only effort to help Africans develop the continent's enormous human and natural resources.
"Building Trade, Expanding Investment" is our theme for this year's AGOA Forum and there is no greater need for building trade links and expanding investment than in Sub-Saharan Africa, where the share of world trade has fallen from 4% in the 1960s to under 2% today. This decline reflects a lost opportunity – Africa has not been a part of the global growth in incomes over the past 4 decades.
We believe that an open trading system offers the best chance to help Africa share in the world's global growth – in conjunction with well-crafted aid policies to improve the capacity of business and farmers to participate. That is why the United States is moving to further open markets through programs such as AGOA. And we have had some initial successes:
- In the southern Africa region, since 2002, for instance, Lesotho has seen the opening of twelve new apparel factories and the expansion of eight existing plants, resulting in the creation of 25,000 new jobs. Now, for the first time, manufacturing employment in Lesotho exceeds government employment, and Lesotho has become the second largest exporter of manufactured products to the U.S. from Sub-Saharan Africa.
- In Namibia, new textile and apparel investments totaling $300 million resulted in 10,000 jobs.
- In South Africa, AGOA has been directly responsible for the creation of 19,000 new jobs, and indirectly for 40,000 others, many of these in the textile and apparel sector.
- And in Malawi, over 4,000 jobs were created in the textile sector.
- AGOA-related businesses employed about 200,000 people in Kenya, and the country has earned roughly $650 million in AGOA exports in 2002, again mainly textiles and apparel.
- Yet another example: in West Africa, Woolworths opened two new branches in Ghana's capital city, Accra, where the company will invest $10 million over the next five years.
- We can also cite Madagascar, Mauritius, Rwanda and Senegal as success stories.
This isn’t just altruism on the part of the United States, either. We hope that increased trade and investment will bring growth, peace, and stability to the residents of Sub-Saharan Africa. But we also hope to create vibrant markets there that can more fully participate in the global economy and become better markets for American goods, too.
In fact, we have seen this happen already – many African textile and apparel manufacturers, for example, have purchased U.S.-made equipment in expanding and modernizing their plants in response to AGOA. For example, the $300 million in new textile and apparel investments in Namibia that created 10,000 jobs also resulted in $120 million worth of U.S. exports to Namibia.
While we can take heart from these success stories, we all know that AGOA trade between Sub-Saharan Africa and the U.S. will not see its full potential unless all participants listen to each other, share with each other their thoughts and ideas, discuss openly their problems, and work together to find solutions. And I can tell you that we value very much your cooperation and input, and I’ll give you an example.
At the Forum in Mauritius were concerns about difficulties in expanding fresh agricultural products to the U.S. market. After Mauritius, the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture (USDA), which has a broad legal mandate to protect domestic plant and animal food sources from the risk of disease or pests, agreed to staff each hub with a technical expert to help African countries and producers in completing pest risk assessments for African farm products.
Now, everyone should be reminded that pest risk assessments are data intensive and can be complicated and time-consuming. In addition, this is the first part of a total review. So I can't stand up here today and say that all problems are solved, but I can say that we are making progress. In both Botswana and Nairobi, agreements to get these programs started have been signed between USDA and USAID [U.S. Agency for International Development], and a technical expert has been posted in Botswana.
I am also aware of other issues that are of concern to some in this group. On the agriculture side --- concerns about global distortions of the market for agricultural commodities. It is very important to get the Doha trade round back on track, as African exporters will gain the most from it. And those companies on the handicrafts side -- your concerns about weak technical clarification of what is determined to be a "genuine handicraft." Both USDA and the U.S. Department of Commerce will be working closely with you on these issues.
We have heard that we need to do a better job in getting the word out to American businesses, particularly to the small and medium-sized (SME) companies. Manuel Rosales, Assistant Administrator for International Trade at our Small Business Administration will discuss the importance of SME involvement later in this plenary.
It is sad but true that there are many countries among those currently eligible for AGOA that have so far seen little or no direct impact. Details vary, of course, from country to country, but we note that good cooperation between the public and private sectors is a major underlying factor in AGOA successes to date and a prerequisite for economic prosperity more generally.
The spirit of hope and opportunity that animate AGOA also lie behind the development and design of the Millennium Challenge Account (MCA). AGOA and MCA both are founded on the conviction that developing countries can and must take control of their own development. Both see development as an inclusive, open process. Both recognize that ODA [official development assistance] is but one factor in growth, and that free markets and domestic and foreign investment are much stronger engines of growth. AGOA and MCA both rest on the certainty that development will best be served by governments that rule justly, invest in their people, and promote economic freedom. We fully expect African countries to be able to compete for MCA partnerships on this basis, and urge that you all continue to support vigorously African-led reform efforts.
We have reached an agreement in principle with both sides of Congress on MCA appropriations. We expect the House to vote tomorrow. Such a profound initiative of $1 billion would increase core U.S. development assistance 50% by FY 2006. We look forward to working with the Senate in early 2004 to make MCA a reality.
When we met in Mauritius, President Bush announced by videotape in Mauritius his intent to ask Congress to extend AGOA beyond its current end-date of 2008. We think AGOA will be a great benefit but recognize that 2008 is probably too soon to let it expire. I can’t be certain at this early date exactly how this extension will be accomplished, and in what form, but I am confident that working with our supporters in Congress and elsewhere, we can fulfill the President’s request. We welcome your suggestions on AGOA and will be working throughout the next year to incorporate recommendations coming out of this week's events.
[End] |