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U.S., Africa meet on preferential trade program

Posted on: Monday, 18 July 2005, 06:09 CDT

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.

PRICKLY OVER TEXTILES

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.

Source: REUTERS

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