US and Africa meet on preferential trade agreement

DAKAR - United States and African trade experts met in Senegal overnight (NZ time) to try to get more from a deal to help African nations trade their way out of poverty.

The meeting is US trade chiefs' first chance to answer African scepticism over pledges to boost trade and aid made by the industrialised G8 leaders this month. African officials will also push for more concrete details, like a timetable for dismantling rich countries' farm export subsidies.

Pressure is also growing to ensure December world trade talks in Hong Kong succeed to avoid more delays to free trade.

"If we can't produce a positive result in the weeks ahead it may be a long time before a similar opportunity comes to us again," US Agriculture Secretary Mike Johanns told delegates.

Few concrete decisions are expected from the three-day meeting but US 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).

The US is keen to keep its trade programme for Africa high in people's minds even after British Prime Minister Tony Blair dominated G8 discussions about Africa in Scotland.

"AGOA is getting results," US President George W Bush told the Dakar meeting in a recorded video statement.

AGOA has been in place since 2000 and has helped create jobs in some African countries. But critics say it has fallen short of expectations and that much of the export growth from AGOA countries has been in the oil sector, which traditionally creates few jobs -- mostly for skilled expatriates.

Figures quoted by Bush show overall exports from AGOA countries to the US rose 88 per cent in 2004 but exports of non-oil goods rose only 22 per cent.

Senegalese Trade Minister Mamadou Diop said just five African countries accounted for 90 per cent of AGOA benefits, showing others had still to take advantage of the scheme.

"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 US said.

Ba said the discussions aimed to remove trade obstacles and encourage private business to make the most of AGOA and halt the slide in Africa's share of global trade -- now just two per cent.

With 37 countries eligible, AGOA covers 6000 products from South African-made cars to wickerwork in Madagascar.

Probably the best publicised AGOA beneficiary has been Africa's textile trade, but there are clouds on the horizon.

Textile businesses incubated under AGOA are being battered by cheap imports from Asia after a 50-year-old World Trade Organisation textile quota system expired at the end of 2004, closing factories and making thousands of workers jobless.

More trouble lies ahead with the 2007 expiry of an AGOA exemption allowing the poorest African countries to import cheap Asian fabric to make clothes for export to the US.

Mauritius, which as one of the higher average income African economies is set to see its own exemption expire on September 30 this year, has said it will push hard in Dakar for an extension to avoid nipping Africa's nascent garment industry in the bud.

Experts say Africa needs to develop its own cotton and yarn sectors to secure AGOA fabric supplies after the exemption ends.


19.07.05 1.00pm

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