Former Special Adviser to the US President for the Kimberley Process, Peter Henry Barlerin stands the fifteen-year review of the Agoa law that gives sub-Saharan economies preferential access to the US market. And while AGOA has been extended until 2025, the US diplomat analyses how the economic relationship between the US and Africa could evolve over the coming years.

Jeune Afrique: Fifteen years after the enactment in May 2000 of the law that established it, can you say that AGOA has achieved its original objectives?

Peter Henry Barlerin: The outcome is very positive. AGOA is the cornerstone of economic relations between the United States with eligible sub-Saharan countries. By offering duty free access to the US market, this preference regime has allowed eligible countries to improve their growth, diversify their exports to the US and initiate inclusive growth.

The eligible countries can export without customs duties to the United States manufactured items having significant added value, such as textiles. That's a total of almost 4600 products entering duty free under the Generalized System of Preferences (GSP) of the United States. Equally, 1800 other products come under AGOA. Most products from sub-Saharan Africa enter the USA duty free. For us it is a success. And I think it is the same for African countries.

Can you illustrate this success with specific examples?

I could say especially that some countries have benefited much more than others. For example, Ethiopia, Kenya, South Africa or Mauritius and Madagascar have much benefited from the AGOA system in the field of textiles, shoes, flowers, nut oils, processed or semi-processed fruits and vegetables.

According to some studies, this device has helped create about 300,000 direct jobs in the recipient countries, which could represent hundreds of thousands of indirect jobs in the continent.

But according to official figures, it is especially the hydrocarbon industry that has most benefited from the advantages of AGOA...

It is true that in the early days of AGOA, we imported a lot of oil from African countries, particularly because of the quality of crude oil from West Africa – it meets the requirements of our refineries - and to diversify our sources of supply because of much instability in some regions such as the Middle East.

But since the development of new technologies in the US, especially for the exploitation of shale oil, oil imports under AGOA are down and imports of non-oil products reached USD 4.4 billion in 2014 nearly triple of the 2001 level.

Have the eligible African economies understood how to get the most out of this law?

We try to encourage better utilization of AGOA and also to encourage trade integration among African countries. In the European Union or the United States, industrial transformation involves several regions. Several EU countries are involved, for example, in the manufacturing of an Airbus plane. This is one of the shortcomings of the African continent. Countries in the region do not have the opportunity to benefit from economies of scale and are less competitive in the international market.

Our development agency, USAID, has regional offices in Africa: Accra, Nairobi, Gaborone, trying to encourage better use of AGOA and promote more free trade between countries.

In practical terms what does that mean?

USAID helps SMEs build capacity and adapt to the standards of the US market to better take advantage of AGOA. We also make available the inspection service for the health of animals and plants (Aphis) of our Department of Agriculture that helps African companies meet the sanitary and phyto-sanitary standards governing imports of animals and plant products in the United States.

What do you say to those who believe that AGOA benefits mainly large international companies via their subsidiaries operating in Sub-Saharan Africa?

This is not a problem in my opinion. For us, AGOA is working as it should. Large corporations, whether from America or elsewhere who move to sub-Saharan Africa pay their taxes, they hire workers and African executives. And that's a good thing because it increases the production capacity of the sub-Saharan countries.

AGOA is extended until 2025. What is changing in the device?

It should first be noted that the extension of AGOA for another ten years was approved by an overwhelming majority, which is a great relief for us!

The new framework established by AGOA Extension and Enhancement Act of 2015 legislation includes provisions on textiles from third countries with a view to supporting the industry (textile and clothing) in sub-Saharan Africa to the eligible countries. This legislation sends a strong signal to investors including multinationals: they can and should invest in Africa with confidence.

The new legislation also contains a specific provision on the promotion of women's role in socio-economic development and acknowledges the civil society’s role in promoting trade.

For now, AGOA opens the US market to sub-Saharan Africa, will the United States negotiate for that law to be reciprocal, as is the case today with the EPA that bind the European Union and Africa?

This is precisely the theme of the forum, held in Libreville. AGOA is 15 years old; we want to pave the way towards more sustainable partnerships between the United States and Africa in the field of investment and trade.
We have ten years to move towards a more reciprocal relationship. This is good not only for the US but also for sub-Saharan Africa.

 

Source: adapted from the article “Peter Henry Barlerin : « La reconduction de L’AGOA envoie un signal fort aux investisseurs »”, Jeune Afrique www.jeuneafrique.com