U.S., Africa meet on preferential trade program

By Alistair Thomson

DAKAR (Reuters) – U.S. and African trade experts and
businessmen will try to get more out of a deal which aims to
help African nations trade their way out of poverty during a
meeting in Senegal’s capital which starts on Monday.

Few concrete decisions are expected from the 3-day meeting
in Dakar, but U.S Secretary of State Condoleezza Rice is due to
drop in on the last day to show top-level commitment to
boosting trade under the African Growth and Opportunity Act
(AGOA).

“What we are hoping for from the Dakar forum is a new start
– that Dakar will be a turning point,” Amadou Lamine Ba,
Senegal’s ambassador to the United States, told Reuters.

Ba said the discussions aimed to improve implementation of
the program by removing obstacles to trade and encouraging
private business to make the most of opportunities.

AGOA has been in place since 2000, but while it has helped
create jobs in some African countries, critics say it has not
met its objectives, particularly as much of the growth has been
in the oil sector, which traditionally creates few jobs, most
of which go to skilled expatriates.

Figures quoted by President Bush show overall exports from
AGOA countries to the United States rose 88 percent in 2004 but
exports of non-oil goods rose only 22 percent.

With 37 countries eligible, AGOA covers some 6,000 products
from nuts in Malawi to wickerwork in Madagascar but experts say
much more could be done to ensure African countries benefit
more from the deal.

The meeting in Dakar is the first since wealthy nations
pledged billions of dollars in new aid for Africa, and
Washington is keen to show it cares. However, Ba said that
there would be few concrete deals.

“The meeting will produce conclusions — not agreements,
but conclusions,” he said.

The discussions will also help inform negotiations in
Washington over future extensions and adjustments to the AGOA
law and will give both sides a chance to lobby support ahead of
key world trade talks in Hong Kong in December.

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One of the most contentious areas is likely to be textiles,
with African industries incubated under AGOA now battered by
cheap imports from Asia after a 50-year old World Trade
Organization textile quota system expired at the end of 2004.

Textile factories in sub-Saharan Africa — where 37 states
qualify for AGOA concessions — have closed as cheap imports
have undercut them and manufacturers have relocated to Asia,
making thousands of people jobless in the poorest continent.

More trouble is ahead for the industry in Africa with the
expiry in 2007 of a special exemption under AGOA allowing the
poorest African countries to import cheap fabric from Asia to
make clothes for export to the United States.

U.S. Assistant Trade Representative for Africa Florizelle
Liser told a business meeting in Rwanda last month that African
countries must streamline transport and customs regulations and
improve power, water, telecommunications and financial services
to be competitive when the exemption ends.

Experts have said Africa also needs to boost its cotton and
yarn sectors to make fabric from West Africa’s cotton fields
available to make up the loss of exempt Asian supplies.