AAI on AGOA: ‘Allowing the Africa Rising Story to Happen’

AAI on AGOA: ‘Allowing the Africa Rising Story to Happen’

Thursday June 12, The Africa-America Institute (AAI) hosted its first Conversations on Africa panel titled “AGOA 2015: Positioning Renewal to Ensure Better Human Capacity Training.” AFKInsider attended the Capital Hill event, which aimed to pinpoint the necessity of an extension, while examining what has worked and what hasn’t.

Panel moderator, Kamran Khan — VP of the Department of Compact Operations and the Millennium Challenge Corporation — summarized the purpose of extending AGOA best. Honoring continued trade from the continent would be “allowing the Africa rising story to happen,” he said.

Though one of the panelists H.E. Liberata Mulamula, Ambassador of Tanzania to the United States, said that it’s time to revert the focus of the Africa Growth Opportunity Act (AGOA) from challenges — the discussion largely targeted hurdles and solutions to the legislation’s fate.

Established in 2000, the extension of AGOA has gone through several congressional perusals and is now set to expire in September of 2015. The ultimate function of AGOA is to allow incentives and duty-free trade to the U.S., which will encourage the expansion of African markets.

“AGOA really was enacted on the principle that trade is crucial for growth — a strong engine for economic growth. It’s been true all around the rest of the world and it is indeed true for Africa as well,” The Honorable Florizelle Liser, Assistant U.S. Trade Representative for Africa at the Office of the U.S. Trade Representative said.

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“Under AGOA there have been tens of thousands of jobs that have been created. I have been to those factories myself. Not just apparel, not just textiles and not just footwear.”

Is AGOA a Disappointment?

Still there remains an alarming issue. An International Trade Administration document revealed that last year, total trade between the U.S. and Africa declined 12 percent compared to 2012.

While under AGOA more than 97.5 percent of goods from Africa can be exported duty-free to the U.S., America only receives a meager percentage of that, Liser said.

For this reason, Stephen Hayes, President and CEO of the Corporate Council on Africa said that overall AGOA has been a disappointment. Since the private sector in the U.S. hasn’t largely gained from African trade, he believes that the U.S. congress is unconvinced of its greater potential.

“What concerns me is that the American private sector does not really benefit from AGOA. We have a growing problem in this country — the gap between the rich and poor, which is enormous,” he said.

“[For] the shrinking of the middle class, the lowering on manufacturing, we’ve got to find creative ways to make those changes. Working with African can change the American economy,” he admitted.

According to Hayes, the strength of AGOA would shine through better implemented trainings, vocational schools and in-depth examination of regional markets. It is not that the U.S. has failed to aid the progression of the act. Instead, growth of African markets is being hindered by a lack of capacity.