BRICS etc may be the elephant in the AGOA room

Africa’s brinkmanship, more so South Africa’s, stands to be tested as the continent prepares to press the US to extend the African Growth and Opportunity Act (AGOA).

A lot has changed since the US established 15 years ago a special dispensation for trade relations with Africa via the AGOA which expires in 2015.

In the past 15 years, African countries have looked more to the East for trade and economic cooperation. The prevailing equation is such that the US has arguably slipped in the order of importance within economic diplomacy.

Nevertheless the AGOA remains a critical feature of Africa’s economic development hopes in giving the continent access to markets within the largest economy in the world. As such Africa will be looking at sweet talking the US into extending the AGOA while keeping intact the aggressive advance of trade and economic relations with Asian giants like India and China.

The South African factor may add even more complexity to the situation with its overt leaning towards the East via the BRICS formation. The economic détente which brings together Brazil, Russia, India, China and South Africa can poison the waters given the fact that it does not seat well with fellow some African countries.

These dynamics will certainly be at play this week during the 12th United States-Sub-Saharan Africa Trade and Economic Cooperation Forum held in Addis Ababa, Ethiopia. As indicated by South Africa’s Deputy Minister of Trade and Industry, Elizabeth Thabethe, the AGOA will feature strongly in the proceedings.

Thabethe, who is leading the South African delegation for the forum, landed in Addis Ababa at the weekend.

On landing she said the Sub-Saharan Africa countries will use forum to lobby for the extension of the AGOA beyond 2015.

Thabethe added that the Agoa which is a unilateral trade preference program that aims at extending U.S. trade and investment with Sub-Saharan Africa is good for all as it is stimulating economic growth and facilitating Sub-Saharan Africa’s integration into the global economy.

She pointed out that since its inception in 2000, AGOA has had a transformative effect on Africa. “The program has been a catalyst to US trade with Sub-Saharan Africa particularly in the energy, footwear, vehicles and parts, clothing and textiles sectors. Fromm2001 to 2011, total trade between the US and SSA under AGOA increased by 340%”. The AGOA legislation also provides for a United States-Sub-Saharan Africa Trade and Economic Cooperation Forum, commonly known as the AGOA Forum to be held every year alternating between Sub Saharan Africa and the US.  The Forum gives a platform for regular dialogue and consultations between Ministers responsible for trade on issues of economics, trade, and investment.

It may just take brinkmanship for South Africa and the entire continent to press the US into extending AGOA without giving up its dance with the East.

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