On Thursday, July 12th, the US House Subcommittee on Africa and Global Health held a hearing on the future of the Africa Growth and Opportunity Act (AGOA). While the meeting usefully articulated possible policies, it also ignored many of AGOA’s problems. Recognition of these flaws will be essential for reform of AGOA, the biggest piece of legislation governing trade between Africa and the US.
On Thursday, July 12th, the US House Subcommittee on Africa and Global Health held a hearing on the future of the Africa Growth and Opportunity Act (AGOA), a series of four bills dating from 2000 onward. Intended to increase US-Africa trade, the bills remove trade barriers for some African goods. Yet many question its success. Although African exports to the US have increased from $15 billion to $59 billion, non-oil AGOA trade makes up only $3.2 billion of that (with much of the increase attributable to an independent trend of growth in world trade).
The hearing, subtitled “Beyond Oil and Gas”, mostly focused on areas for improvement. It brought up many excellent points, namely the manifestly evident need to increase the sectors AGOA covers. A mere five countries account for 90% of AGOA exports to the US, and the vast majority of these exports is oil or natural resource related. There also exists a distinct lack of benefits in key sectors, such as agriculture, where Africa could prove especially competitive. US tariff-rate quotas (TRQs) are just one of the programs that make it nearly impossible for African farmers to export goods such as sugar and peanuts to the US. African farmers have already seen benefits from exporting their freshly-cut flowers under AGOA (Kenya alone exports $700 million worth) and could reap far more if given the opportunity. The next African Growth and Opportunity Act would do well to include more avenues for African goods to enter the US.
Yet this approach seemed to ignore the ongoing problems with AGOA. The unwillingness to confront natural resource exploitation (except briefly by Representatives Payne, Watson and Jackson-Lee) proved especially frustrating. While a focus on the future is important, one must consider the lessons of the past before moving forward. From Nigeria to Angola, the Democratic Republic of Congo to Sudan, few see gains from the exploitation of Africa’s resources. While this hearing might not have been the appropriate venue for confronting this situation, it is a concern that certainly deserves airing at some future event.
There are also certain underlying issues that hold back African farmers, such as poor infrastructure and foreign farm subsidies. Yet a non-functional trading system restricts the possible benefits from improvement of any of those situations. Furthermore, AGOA does not have these problems under its jurisdiction of other legislation (farm subsidies, for example, fall under the farm bill). New versions of the African Growth and Opportunity Act, if properly respectful of past lessons, could very well offer an excellent opportunity for African industries to develop.
By Jeff Weaver