Alan Peat THE US trade concession for African export countries - the Africa Growth and Opportunity Act (AGOA) - is soon to be extended from its original expiry date of 2008 to 2015, according to Henry Flint, Standard Bank African economic researcher. “To be known as AGOAIII, it is in the process of becoming law with its recent introduction in the US Senate and House of Representatives.” While the main focus of AGOAIII is to extend the overall programme, extending the “third country” apparel provisions by four years from 2004 to 2008 is also on the agenda. Amongst the additional benefits stemming from the new phase of the act, will be increased access of agricultural products to the US market by eliminating trade barriers. Technical assistance “Also envisaged is increased technical assistance to African farmers to assist them in meeting the strict US sanitary/phytosanitary requirements,” said Flint “Focus is also on building the capacity and the infrastructure (transportation, energy, telecommunications, water) of eligible countries.” The Americans see this infrastructural development as an important generator of expansion in reciprocal trade flows, according to Flint. “AGOA III provides new opportunity for African countries to attract investment and grow exports.” Flint described the proposed changes under AGOAIII to be “a major breakthrough for eligible African countries”. Primary amongst these is the extension of AGOA to 2015. “This means that those countries that have already embraced the benefits offered by AGOA will continue to do so for a longer period.” It is also something which a number of export industry executives have told FTW is an absolute necessity - guaranteeing the price advantages of duty-free import to the US for a period sufficient to justify capital investment in export production, and allowing for longer-term planning. “Also, those who have been slow in utilising the programme will have more time to enter.” An interesting point is that of the 37 eligible countries only about 10 have been recording meaningful trade with the US under AGOA. “Those governments that have been slow in creating the appropriate platform for increased investment and international trade will therefore have another chance.” Foreign investors Flint also forecasts that the extended timeframe may also make it more attractive for foreign companies to invest in AGOA eligible countries. “Those who have not invested in the past due to the limited timeframe may now find it viable,” he said. Talking about the greater access for agricultural exports from Africa, Flint described it as “much needed and long overdue”. “However,” he added, “greater access without a focus on infrastructural development in eligible countries does not mean much. “Underdeveloped infrastructure has long been a prohibiting factor in African trade.”
