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Africa: NGOs start campaign against US AGOA

by Chakravarthi Raghavan

Geneva, 4 Oct 2000 - The Africa Growth and Opportunity Act (AGOA), signed into law by the US President, provides illusory benefits to African countries who in exchange are to provide real concessions to the United States and its firms, African civil society groups have said in launching a campaign to alert their governments and public against taking measures required of them to be eligible for AGOA benefits.

The African NGOs have launched a campaign and asked NGOs elsewhere to join it in alerting African governments, the public and others concerned in African development against the US AGOA Act.

A campaign alert issued by the Africa Regional Secretariat of the Third World Network in this regard, underscores the urgency of civil society action and notes that the civil society position has been reinforced by official expressions of concern recently from the African region.

The NGO alert notes in this regard that the recent Conference of African Ministers of Trade in Cairo had expressed their concerns about the dangers of the AGOA to African strategies of economic development and came out against hasty action by African governments to join the AGOA, until governments have assessed all its implications.

Also, in the context of the World Trade Organization, African diplomats have suggested civil society groups to bring the dangers of the AGOA to the attention of various governments since otherwise some of the governments may in haste take action in relation to the AGOA which would undermine all the efforts of their diplomats in Geneva on the WTO issues.

If African governments take measures along the lines required of them under the AGOA, “they will be accepting all the unfair measures that exist in the WTO rules and which they are struggling to change in the WTO.”

The TWN Africa secretariat points out in this regard that the US is one of the major owners blocking efforts to change the unfair measures.

In addition, the African governments will be giving in on the new issues that the US and other major powers want to introduce into the WTO and to which African and other developing countries are opposed.

“All this will be in exchange for very little, because the benefits that the Act offers are illusory.”

Referring to the concerns expressed by various quarters about the dangers posed by the AGOA, the note says that the OAU Conference of African Ministers of Trade meeting in Cairo last September cautioned against African countries rushing to join the Act in view of real danger that the Act will undermine on-going African economic initiatives.

Many African delegates at the WTO are also worried that all their efforts to reverse the imbalances of the WTO agreements will be destroyed. Some free-trade economists (like Jagdish Bhagwati) have publicly denounced this Act.

The AGOA promises African economies general duty and quota free access for African products in the American market.

But this promise is dubious, because: (1) the American government will grant access only to goods that it decides may not negatively affect American producers. This is why coffee, sugar and other products of economic benefit are not covered. (2) in the long-term, tariff duties are supposed to come down anyway, and quotas removed, as part of WTO rules.

The AGOA, the NGOs point out, offers in particular duty- and quota-free access for African textiles and apparels to the American market. This is also dubious, because, in effect, only those products and apparel using fabric and yarns produced from America will have easy access to the US market.

Textile products made from yarn and fabric from African countries and other areas will be subject to severe constraints.

The access in these cases will be granted only on yearly basis, and should not exceed a total of 3.5% of all apparel imported into the US in eight years.

At the same time, the US government can at any time withdraw this benefit if it determines there is a sudden surge in imports of textile products into the US which will threaten its own domestic industries.

“The requirement for US raw materials to be used will work against the ability of African countries to develop, either individually or together, their own domestic raw materials base to textiles, and therefore undermine the development of integrated textile industry in Africa,” says the alert issued by TWN Africa secretariat on behalf of African NGOs. “Moreover, importing US raw materials for use in textile production may turn out to be expensive in view of transport and other costs, which means in the end African textiles products exported to the US may not be competitive after all.”

The NGOs add: “In exchange for these illusory benefits, the AGOA demands that African countries must, among others things:

(a)  eliminate barriers to all US trade and investment in Africa. This includes a demand for American firms to be given equal treatment as African firms, as well as for high standards of intellectual property protection as contained in the TRIPS agreement in the WTO; (b) pursue further privatisation, remove government subsidies and price controls;

(c)  guarantee international labour standards, and set minimum age for child labour;

(d)  not engage in any act that undermines US national security and foreign policy interests.”

The Act makes it clear that these conditions must be understood in the context of the standards that operate in the WTO. For instance, the Act instructs the President to “encourage” African countries to "bring their legal regimes in compliance with the standards of the WTO”.

African countries are also expected to liberalise their services sectors, by making further commitments in the WTO General Agreement in Trade in Services (GATS) in order to remove tariff and non-tariff barriers.

Some of these requirements, the African NGOs point out, are contained in the WTO agreements which African governments have found to be to their disadvantage and are struggling to change. They include issues such as TRIPS, TRIMS and agriculture support.

Other requirements like labour standards and investment form part of the new issues which the US has been trying to promote, against the wishes of African and other developing countries.

“Therefore by making these requirements as conditionality for some supposed benefits, the AGOA sets a trap for African governments to concede to the wishes that the US government is having difficulty achieving in the World Trade Organization.”

The AGOA will also set African countries against each other,” the NGOs say.

“It proposes the establishment of free-trade areas. These, together with other so-called supportive measures for African economies are aimed only at “growth-oriented” economies.

A few countries will be selected, and the poorer ones left alone. Above all, as noted by the Cairo Conference of African Ministers of Trade, this will simply undermine regional economic co-operation efforts by African countries.

“African civil society organisations must join in the effort to save African countries from the AGOA trap.” –SUNS4754

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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