Yesterday, the Africa-America Institute (“AAI”) kicked off its inaugural Conversations on Africa Series with a panel forum themed “AGOA 2015: Positioning Renewal to Ensure Better Human Capacity Training.” Moderated by Kamran Khan, Vice President of the Department of Compact Operations, Millennium Challenge Corporation, the panel consisted of:
- Her Excellency Liberata Mulamula, Ambassador to the U.S., United Republic of Tanzania
- Witney Schneidman, Senior International Advisor for Africa, Covington & Burling
- Steve Hayes, President and CEO, The Corporate Council on Africa
- Steve Lamar, Executive Vice President, American Apparel & Footwear Association
- The Honorable Florizelle Liser, Assistant U.S. Trade Representative for Africa, Office of the U.S. Trade Representative
- Gregory Simpkins, Majority Staff Director, House Subcommittee on Africa, Global Human Rights and International Organizations
The nearly unanimous consensus amongst the panelists was that renewing the Africa Growth and Opportunity Act (“AGOA”) is critical to the U.S.-Africa commercial relationship. Furthermore, recognizing that AGOA has been underutilized to date, the panelists provided a number of recommendations on how to strengthen the trade legislation.
Renew AGOA immediately. One panelist explained the need to renew AGOA soon by analogizing the private sector’s perspective on the September 2015 expiration date to a driver approaching a red light. If a driver sees a red light in the distance, he starts to ease up on the gas pedal. As he gets closer, he starts to put on the brake. If the light stays red, he eventually just stops the car completely.
Renew AGOA for a long term, perhaps even on a permanent basis. A number of the panelists agreed that AGOA should be renewed for a ten or fifteen year term rather than the two and five year extensions that it has received in the past. A key reason for this position is that the size of investment needed to make a venture viable — particularly in the textile industry — requires a longer period of time to amortize. There were some calls to make AGOA permanent and the Caribbean Basin Initiative was cited as successful precedent for how to move from a unilateral preferential trade program with a region to free trade agreements with individual countries in that region.
Expand AGOA membership and reconsider the conditions for eligibility. One panelist proposed that the U.S. expand AGOA to include all countries in Africa and argued that that would be more consistent with recent Administration rhetoric about the need for a unified market and regional economic integration in the continent. In the same vein, another panelist suggested that the U.S. take a closer look at the conditions for eligibility. In light of the impact that losing AGOA status has on a country’s economy and its workforce (particularly female workers), the panelist proposed that a country should not have its status revoked unless the U.S. has brought sanctions against the country.
Support AGOA with capacity-building and technical assistance initiatives. Several panelists stressed that the market access and preferential tariffs provided by AGOA will continue to be underutilized if more is not done to create an enabling environment on the ground in the beneficiary countries. Suggested initiatives included reforming domestic investment and trade policies and closer linkage between those policies and development policies; consolidating small and medium sized enterprises in order to create economies of scale on both the supply side and the demand side; building human capacity especially with respect to youth education; investing in energy and infrastructure; improving supply chain efficiency; incorporating an AGOA component into MCC compacts; providing a tax incentive to encourage American companies to invest in Africa (thereby increasing skills and technology transfer through job creation); and providing technical assistance particularly in the agricultural sector.