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Note: This document is from the archive of the Africa Policy E-Journal, published
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Africa: Trade, USA
Africa: Trade, USA
Date distributed (ymd): 000602
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+ +US policy focus+
Summary Contents:
This posting contains two news stories, used by permission from
InterPress Service (http://www.ips.org), summarizing reaction and
content of the Africa Growth and Opportunity Act passed by the U.S.
Congress and signed by President Clinton last week. The full text
of the bill is available at http://thomas.loc.gov. Look for H.R.
434, and choose the "final version as passed by both houses."
A parallel posting today includes a newsletter with updates on
Africa/Europe trade relations from Action for Southern Africa
(ACTSA).
Of related interest, an "After Seattle" policy brief from the South
Africa Council of Churches on developing countries' demands for
change in the World Trade Organization:
http://www.sacc-ct.org.za/ppu_wto.html
+++++++++++++++++end profile++++++++++++++++++++++++++++++
TRADE: South Africa Welcomes US Trade Bill With Reservations
By William Dhlamini
JOHANNESBURG May 18 (IPS) - South Africa has cautiously welcomed
the new US African Growth and Opportunity which aims to give
greater access to US markets for African, Caribbean and central
American clothing and other exports but expressed reservations
about the conditions attached to it.
"SA supports the broad thrust of the US trade bill, inasmuch as it,
for the first time, opens the US market to products from
developing nations, but the conditions attached to the bill
remains a point of contention for the SA government," says
Tsedisho Matona, director of bilateral trade in SA's department of
trade and industry.
The US Senate passed the bill last week expanding US trade with 75
subsaharan African, Caribbean and central American nations by
removing import duties on clothing and cutting tariffs on other
goods from those regions.
The passage of the bill in the US Senate last week, came a week
after approved by the House of Representatives.
US President Bill Clinton hopes to sign the trade bill into law
during SA President Thabo Mbeki's visit to the US next week.
The trade bill known as the Africa-Caribbean Basin Initiative, is
expected to benefit US clothing makers who have plants in Africa
and the Caribbean, which in this case is defined to include
Central American nations.
Under the bill the US provides duty-free, quota-free benefits to
apparel made in Africa, Caribbean and central America from US
produced yarn and fabric.
Critics of the measure - which includes SA's trade unions, civics
and non-governmental organisations say the conditions attached,
such as the US setting caps on textile imports, will do little to
solve the major problems facing the region, such as AIDS and
crippling developing country debts.
To reap the benefits of the trade bill, African, Caribbean and
central American nations will have to privatise industry, cut
corporate taxes, open their economies to foreign goods and pursue
economic reforms similar to those required by the World Bank and
International Monetary Fund.
African, Caribbean and central American countries must also abide
by human rights standards set by the US. The US has the
prerogative to decide which countries must benefit. If a country
does not uphold a human rights culture acceptable to the US or
does not pursue economic policies approved by the US, the US has
the right to unilaterally suspend trade.
Matona says SA believes regional organisations such as the Southern
African Development Community, SADC, or the Organisation of
African Unity, OAU, should make such judgement calls.
Former SA President Nelson Mandela said at the introduction of the
bill two years ago: "To us (SA), it is not acceptable."
Former University of Cape Town academic and now lecturing at
Columbia University in the US, Mahmood Mandani says the trade bill
"tilts the balance of reform in developing countries away from
choice to an external exposition.
"It reads like a set of terms that every African country must meet
before getting ease of access to the US market. Many people wonder
whether the US is opting for regimes that are willing to impose
economic reforms designed in Washington, even if these regimes
deny the local opposition the right to organise.
TRADE-US: Clinton Signs Africa-Caribbean Bill
By Jim Lobe
WASHINGTON, May 18 (IPS) - Celebrating his first trade victory in
six years, US President Bill Clinton Thursday signed into law the
Trade and Development Act of 2000, which is designed to promote US
commerce with sub-Saharan Africa and two dozen countries of the
Caribbean Basin.
In an enthusiastic ceremony on the south lawn of the White House,
Clinton told the two regions' diplomatic corps, as well as key
lawmakers, that the legislation "will be good for the United
States, good for Africa, good for Central America and the
Caribbean."
"Let me say that the legislation I sign today is about more than
development and trade; it's about transforming our relationship
with two regions full of good people trying to build good futures,
who are very important to our own future," he said.
He also called for quick Congressional approval of debt relief for
the poorest nations and for proposed tax incentives to speed the
development and delivery of vaccines for HIV/AIDS, malaria, and
tuberculosis.
The new law - an amalgam of the Africa Growth and Opportunity Act
(AGOA) and the Enhanced Caribbean Basin Initiative (CBI) - passed
both houses of Congress by large majorities earlier this month
after a protracted negotiation to reconcile different versions
which they had approved last year.
Both the AGOA and Enhanced CBI bills had been pending in Congress
for a long time. The Africa bill, which Clinton submitted in 1997
and which the House had approved the following year, was blocked
in the Senate by lawmakers from textile-producing states.
Enhanced CBI, which was originally designed to give Caribbean
nations many of the same trade advantages acquired by Mexico under
the 1993 North American Free Trade Agreement (NAFTA), was held up
by a coalition of textile interests, labour unions, and some
environmental groups. It was actually rejected by the House in
1997 but revived when senators attached it to the Africa bill late
last year.
As a result, the final version of both bills, which runs through
2008, is a pale shadow of what their supporters had originally
hoped to achieve in the way of opening the US market much wider to
exports from poor regions. For example, it fails to reduce tariffs
and increase quotas on key farm commodities, such as sugar or
coffee, important commodities in both regions, especially for
poorer countries.
The new law's main provisions concern textiles and apparel. The
original intent of the bills was to eliminate quotas and tariffs
on these products from beneficiary countries. But that proved
politically impossible. As a result, a complex set of rules was
devised for each region.
Apparel made in both regions from US yarn and fabric may now enter
the US market duty-free, a provision that favours the Caribbean in
particular, due to the major transport costs involved in shipping
goods to and from Africa.
African textile and apparel manufacturers, however, could benefit
more by two other provisions in the law. Apparel shipped from
Africa and made from regional fabric and yarn will be accorded
duty- and quota-free benefits, up to a ceiling ranging from 1.5
percent to 3.5 percent of all US apparel imports over eight years.
All apparel exports from Africa currently add up to less than one
percent of the US import market with a value of about 580 million
dollars. [Under the caps in the bill, apparel exports to the U.S.
made of regional and third-country fiber could reach $4.2 billion
in the year 2008].
South Africa and Mauritius, the region's two most important
exporters, could be major beneficiaries of this provision,
according to a 1997 government study here.
In addition, apparel made in Africa from non-regional, non-US
fabric will also be given duty- and quota-free treatment, provided
that the exporting country's annual per capita income is less than
1,500 dollars. This provision could prove a boon to Kenya,
Lesotho, Swaziland, Madagascar, and Zimbabwe, all of which
currently export apparel to the United States.
It could also help eight other countries - Cameroon, Cote d'Ivoire,
Ghana, Malawi, Mozambique, Nigeria, Tanzania, and Zambia - which
have the potential to expand apparel exports to the United States,
according to the same study.
To prevent illegal transhipments of goods made or assembled outside
Africa, the law provides additional funding for US Customs
inspection and requires beneficiary countries to upgrade their own
monitoring practices.
In addition to duty-free treatment for apparel made in CBI
countries from US yarn and fabric, Caribbean exporters may receive
the same benefits for knit apparel made from regional fabric up to
a cap of 250 million square meters during the first year, or about
10 percent of what the region exported to the United States last
year. That ceiling will rise by 16 percent each year for the
following three years and will be capped at 450 million square
meters after that.
The law also extends trade benefits already enjoyed by CBI
countries through 2008. At the same time, it requires beneficiary
countries to guarantee intellectual property rights, protect
foreign investment, improve market access for US exports, ensure
internationally recognised worker rights, and eliminate the worst
forms of child labour.
It applies similar conditions to African beneficiaries. Under the
law, the president must certify that a country is making
"continual progress" towards establishing "a market-based economy"
which, among other things, provides national treatment to foreign
investment, ensures the rules of law, and protects worker rights.
Critics have charged that these conditions amount to a "new
colonialism" against Africa which place US corporate interests
above those of most poor Africans.
The law also creates a US-Africa Trade and Economic Co-operation
Forum, similar to the Asia-Pacific Economic Co-operation (APEC)
forum, to facilitate regular trade and investment policy
discussions between US and African officials and authorises the
president to put together a plan for entering free-trade
agreements with those African countries which fully meet the law's
eligibility requirements.
At present, Africa accounts for only one percent of all US exports,
imports and foreign investment which are concentrated in only a
handful of countries. In 1999, 70 percent of US exports to the
region (5.5 billion dollars) went to only five countries - South
Africa, Nigeria, Angola, Ghana, and Equatorial Guinea - and 92
percent of US imports (14 billion dollars) came from four
countries - South Africa and oil-exporters Nigeria, Angola, and
Gabon, according to recent Commerce Department statistics.
Two-way trade with CBI countries, which include the seven nations
of Central America, Guyana, Suriname, and all Caribbean islandcountries
except Cuba, last year was - at more than 40 billion
dollars - twice as great as trade with Africa.
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC provides
accessible information and analysis in order to promote U.S.
and international policies toward Africa that advance economic,
political and social justice and human and cultural rights.
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