Questions arise over Agoa’s value to US

United States (US) policymakers
are questioning the effectiveness of
preferential trade programmes, such as
the African Growth and Opportunity
Act (Agoa), amid declining trade with
sub-Saharan Africa.
Former US trade representative
and senior fellow at the US Council on
Foreign Relations, Michael Froman,
highlighted that US trade with
countries who benefit from the
programme had dropped
since its 2008 peak
almost to its pre-Agoa
total, while African trade
relationships with other
countries, particularly
China, have
expanded.
He said
there were
also concerns
about Africa’s
continued dependence
on low-value-added products and
natural resources, pointing out that
beneficiaries still exported few of the
higher-value manufactured products
that the legislation hoped to spur.
Brookings Brief researchers,
Witney Schneidman and
Moyombuya Ngubula, recently
suggested a step towards more equitable
two-way trade policies as southern
African countries were increasingly
setting up new trade agreements with
other economic blocs, thus reducing US
competiveness as a trading partner.
“The European Union-Southern
African Development Community
(SADC) Economic Partnership
Agreement (EPA) will further erode US
export competitiveness in South Africa
and the region due
to the greater
disparities in
tariff levels that
US exports will
face under the EPA,”
said Ngubula, adding that as
other EPAs took hold across
the continent, the disparities
adversely affecting American
companies would intensify.
“And, of course, China –
as Africa’s largest trading
partner – adds to the pressures
on US commercial competitiveness in
Africa,” commented Schneidman. He
said a new trade relationship between
the US and African nations would
provide American companies with more
certainty.