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  • Time to Upgrade the African Growth and Opportunity Act

    Newscom

    Newscom

    Africa is increasingly viewed as “a hopeful continent” whose next 10 years can be even better economically than the last 10. In this evolving economic reality, the United States should seize the opportunity to reinforce its vision of economic freedom and prosperity in the region.

    In his first public speech since becoming the United States Trade Representative, Mike Froman elaborated on President Obama’s trip to Africa this week and emphasized that “any discussion of U.S.-Africa trade and [investment] has to be grounded in the African Growth and Opportunity Act (AGOA).”

    For the U.S., AGOA has become the backbone of its economic engagement with Africa. The purpose of AGOA has been to use preferential trade access to the U.S. market to encourage African nations to open their economies and build free markets. Since its inception in 2001, AGOA has contributed to spurring stronger incentives for African entrepreneurs to export their products in the global marketplace and take advantage of tangible opportunities to improve dynamic growth by trade. As the law now stands, nearly all imports from AGOA-eligible countries will enter the U.S. duty-free through 2015.

    However, while AGOA has facilitated trade expansion for African economies, there has been a growing acknowledgment that trade preference programs alone are not enough to promote meaningful American engagement with the region. America continues to undermine the competitiveness of African entrepreneurs with its domestic subsidies and non-tariff barriers. These protectionist policies severely undercut America’s credibility and leadership in advancing economic freedom in the region.

    Froman pointed out that “there is still more [the U.S.] can do to build on AGOA.” Instead of merely renewing AGOA, it is time to seriously think about the future of AGOA to spur elevated economic interaction and ultimately transform the trade preference program into a free trade pact between the U.S. and Africa.

    America cannot furnish African nations with the political will that is critically needed for such transformation. But it can demonstrate political will of its own. By demonstrating serious, committed interest in freer trade, President Obama can make his current trip to Africa more than just a photo-op.

    Posted in Economics [slideshow_deploy]

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