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What A Post-Obama Administration May Mean For The African Growth And Opportunity Act

What A Post-Obama Administration May Mean For The African Growth And Opportunity Act

From Daily Nation. Story by Kevin J. Kelly

Apart from the bogus “birther” claim that U.S. President Barack Obama was born in Kenya, Africa has barely been mentioned by either presidential candidate Hillary Clinton or Donald Trump during the campaign.

That silence extends to the African Growth and Opportunity Act, which allows most products from 38 eligible sub-Sahara countries to export goods to the U.S. duty-free.

Sixteen years since its launch, AGOA has not driven industrial development in Africa as had been anticipated.

But the program has served as a catalyst for increased textile production and associated job growth in Kenya and other countries. AGOA is viewed positively even in countries where its benefits have not been felt.

In the years following its enactment during the Bill Clinton presidency, AGOA has stirred little opposition from Democrats or Republicans, largely because it has not amounted to much of a threat to U.S. workers.

The Congress recently approved a 10-year extension of presidency of with strong support from members of the major parties.

Trade deals criticized as harmful to U.S. economic interests have, however, emerged as a key issue in the race for the White House.

Trump has been forceful in condemning such agreements, and the resonance of his arguments has led his Democratic rival to take a similar stance.

The candidates’ expressed opposition to trade schemes favorable to exporters in the developing world raises the question of whether the next White House occupant might want to undo or weaken AGOA.

Should Trump overcome odds against winning the Nov. 8 election, he could include AGOA as part of a general offensive against U.S. trade agreements.

“But the Republican leader will not have the support of Congress to reverse AGOA, even if he wants to,” said Stephen Hayes, head of the Washington-based Corporate Council on Africa.

Clinton may adopt a cautious approach towards free-trade deals.

“For most of her adult life, she has supported such agreements. AGOA legislation will not be reversed but will run its 10-year course,” said the leader of an association that includes nearly all U.S. firms doing business in Africa.

“AGOA has had little impact on U.S. jobs going overseas, a principal reason for a growing anti-globalism movement.”

Stephen Lande, the head of a Washington consulting firm focused on Africa trade, said there was little danger of AGOA being scaled back.

He said any threat to the program would not arise from political factors in the U.S. but from what Washington viewed as potentially unfair competition on the part of the European Union.

African regional trade blocs are in talks with the E.U. on deals that would allow E.U. goods to enter the continent duty-free.

Michael Froman, the Obama administration’s top trade official, has said business relations may be affected with countries that put U.S. exports at a disadvantage as a result of preferential deals with the E.U.

He added that a more positive point worth considering was how a Clinton administration could seek to expand trade with Africa.

“AGOA could be improved by liberalizing its rules of origin,” he said.

The rules require that products intended for the U.S. market must include a substantial share of Africa-made components.

Lande cited Africa’s agriculture as offering potential for growth through AGOA. The U.S. could allow farm products such as leaf tobacco and sugar to qualify as duty-free imports.

A Clinton administration might promote economic development in Africa more effectively by focusing on regional trade integration rather than on AGOA.

The White House could develop incentives for countries in other parts of the continent to make as much progress on integration as has the East African Community.

“Africa is a much stronger negotiator as a group than as a collection of individual countries,” Lande said.

Read more at Daily Nation.