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AGOA: AU Commission calls for better trade terms

by Business News Report

The African Union Commission (AUC has called for a review and negotiation for better terms with the USA under the Africa-USA trade and investment relations. AUC commissioner for Trade and Industry, Mrs Fatima Haram-Acyl, made the call at the opening of the 12th African Growth and Opportunity Act (AGOA) Forum in Addis Ababa.

She said Africa’s exports under AGOA increased by more than 500 per cent between 2001 and 2011. Haram-Acyl said exports between Africa and the USA rose from $8.15 billion in 2001 to $53.8 billion in 2011. “However, it is unfortunate that about 90 per cent of these exports are still oil products, which underscores Africa’s need to diversify its exports and negotiate better terms for non-oil products with the US. Under AGOA, the volume of non-energy exports to the U.S. has increased by 275 per cent, from $1.2 billion to $4.5 billion between 2001 and 2011.

“The number of countries exporting non-oil products under AGOA has also increased from 13 to 22 during this period“, she said. She said AGOA generated about 350,000 direct jobs and one million indirect jobs in Africa, especially in the textile and apparel sectors. “As it is evident from these statistics, US investment lies more in the capital intensive sector of mining and extractive industries. The manufacturing sector actually brings about growth in jobs and socio-economic development”, she said.

Haram-Acyl expressed disappointment that some eligible countries had not taken advantage of AGOA to improve their trade relations and develop the industry.

“Similarly, total U.S. trade with Africa excluding North Africa, in 2010 and 2011, grew by 29.5 per cent and 17 per cent respectively, the top U.S. export markets being South Africa, Nigeria Angola, Mauritius, Ghana and Ethiopia.

“The top export categories were machinery and parts (22%), followed by transportation equipment (17%), cereals (8%), mineral fuels (8%), aircraft and parts (7%), and electrical machinery (6%). In 2011, U.S. exports to Africa, excluding North Africa, accounted for more than 100,000 jobs in the US with oil and gas contributing the largest share of imports to the US under AGOA.

“This is indicating that the partnership contributed to the industrialisation of and job creation in the US more than what it contributed to Africa over the period“, she said. The commissioner called for review to balance the trade between the US and Africa during the forum. If we continue to export only raw materials under AGOA, we will not achieve one of its objectives which is export diversification“, she said.

 The AU commission is considering the extension of the AGOA programme beyond 2015 for more inter-regional development. “There is a general conviction from both parties that AGOA did not develop its full potential as an engine of intra-regional integration and that the benefits of AGOA have not been maximised. AGOA should be extended for a longer time in a predictable manner and the range of products eligible for AGOA imports expanded. This will help promote non-extractive investments on the continent. There is also need for more business to business interaction and to achieve that, more work on raising awareness among women and youth entrepreneurs and small and medium size businesses should be undertaken.’’ Government officials from AU member states, business entrepreneurs, women groups, the private sector, captains of industry from Africa and the USA are attending the forum.

AU Ministers of Trade and Industry were expected to hold AGOA ministerial session on yesterday, August 12.

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