Written by Ben Kangwa, Press Secretary, Zambia Embassy, Washington DC
Minister of Commerce, Trade and Industry, Hon. Felix mutate visited the United States of America from 13 – 16th April 2011 to attend a pre-AGOA event organized by the Brookings Institution. The Institution is a Washington DC based Think Tank.
The events constituted a Congressional discussion on April 14 2011 followed by a panel discussion on April 15th at the Brookings. The main objective of the event was to provide some useful input into the discussions during the AGOA Forum to be held in Lusaka from 9th – 10th April, 2011.
Besides being a keynote speaker at a Congressional discussion on AGOA and as a discussant at a discussion hosted by the Africa Growth Initiative and the Corporate Council on Africa (CCA) at Brookings, Hon. Mutati also observed and listened to a discussion on the Role of Non-Governmental and Private Sector Stakeholders.
The session brought together key stakeholders in the private sector and other Non-Governmental actors to examine how such organizations can contribute to the success of AGOA The panelists agreed that non-state actors can contribute to the success of AGOA, however,” they should coordinate their efforts in line with the region’s broader goals.”
One panelist noted that the budgets of some NGOs are equivalent to or even exceed the budgets of high-level government Ministries – a disparity which can skew policy outcomes towards the interests of the former. Another issue and one related to the first, is the fact that local knowledge was often overlooked when development policy is created and instituted.
Given the underutilization of AGOA by US companies, panelists agreed that more financial incentives should be given to US businesses that invest in Africa. One way to do this, they stated, was to eliminate tax on repatriated profits of foreign businesses situated in Africa.
Another way was to phase in reciprocal trade agreements between developed countries, like the USA and various African countries over time. The said such efforts should be coupled with on-going efforts to create business friendly environments in Africa.
Lastly, the discussion focused on the need for political space to allow US officials to pursue these goals. When frustration was expressed that the US Administration had not done enough to advance trade policy with Africa, it was quickly noted that the political will must be driven from the ground-up, from demands made by influential and those assembled for the session.
The third discussion Opening Doors for Investment through AGOA, saw Minister Mutati give opening remarks to a distinguished gathering at a working lunch. The lunch session provided a unique opportunity for stakeholders to have a candid discussion about the way forward with AGOA.
The Commerce Minister Mutati, speaking on behalf of African Ministers of Commerce and Trade was able to express his concerns about AGOA thus far and how AGOA eligible countries would like to see the agreement revised. Similarly, representatives from the US Trade Office and from the US Congress were able to present their perspective.
Participants called for a more dynamic engagement between the US and Africa and stated they would look to African leaders to propose their recommendations on a way forward. He stressed that both the US and Africa stood to gain from increased engagement and that it was important to develop more than just one sided trade agreements.
He said leaders from China, Brazil, India and even Russia had made multiple trips to Africa to increase trade relations. “Africa wants to deepen its partnership with the US, but the region does not seem to be priority,” he said.
Other participants at the working lunch agreed that it was important to build on the successes of AGOA. They stated that this could be achieved by providing universal product coverage, engaging regional groups such as SADC, COMESA, ECA, removing the remaining US trade barriers and working with the Millennium Challenge Corporation (MCC) and the Exim Bank of the United States of America to encourage US business investment in Africa.
In an effort to enhance regional integration under AGOA, it was agreed that the Assistant US Trade Representative for Africa, Ms. Florizelle Liser, would facilitate a meeting between US Trade Representative Ron Kirk and the representatives from the various Regional Economic Communities (RECs) in Africa. This would be the first meeting of its kind and would allow the US to begin to engage the RECs in a more meaningful manner.
During the past AGOA Forum meetings, the US Trade Representative met all 34 Ministers of Commerce and Trade, but due to the large size of the meeting, very little was accomplished. A smaller meeting, such as the one proposed, would allow Ministers to delve into details and create a platform for the US to engage regional groups.
The final private session Moving AGOA Forward For Shared US-Africa Growth heard from several speakers and engaged in a frank discussion of the issues surrounding how best to move AGOA forward. This session produced several constructive suggestions as to how AGOA could best evolve in the future.
Suggestions included designing AGOA to allow for greater predictability. It was strongly noted that predictability did not require AGOA to be made permanent, but rather could be defined by a series of policy timelines designed to allow for Heads of States as well as potential US investors, to incorporate AGOA into their long-term strategies.
Green growth was identified as a keystone to the expansion of Africa’s agricultural sector. It was noted that AGOA could be the conduit for spurring partnerships between firms developing green technological advances in the United States and agricultural groups in Africa.
The issue of working AGOA into the existing system of trade agreements in Africa was also brought up as an important factor in making AGOA more effective. To this end, discussants suggested that AGOA must find ways to recognize and reduce friction with pre-existing trade agreements that may restrict one-to-one trade agreements between the US and a given African nation. At the same time, it was noted that if AGOA was more predictable, then African trade negotiators could re-evaluate restrictive pre-existing trade agreements in order to facilitate greater utilization of AGOA.
It was also widely agreed upon that the US could have an impact on bringing US investment to Africa simply by participating in missions to the region. During these missions, it was suggested, that the US could bring business leaders and investment evaluators to take greater notice of the opportunities in Africa.
In summary, the final private session was vibrant and honest discussion that offered a highly optimistic outlook for the future of AGOA and trade relations between Africa and the United States of America.