African Factory African Factory

What's AGOA and Why it is Bad for Africa

By Special Features / Tuesday, 27 June 2017 14:26

By Jason Hickel

The African Growth and Opportunities Act (AGOA) is a trade agreement between the US and 39 sub-Saharan African nations. It was originally signed in 2000, recently renewed for another 10 years by the US Congress and will be the subject of a summit in Gabon later this month.

Historically, however, US economic policy toward Africa has done little to promote democracy, transparency, or sustainability on the continent and we do not believe the next ten years will be any different.During a briefing Secretary of State for African Affairs Linda Thomas-Greenfield said: "We were delighted - I mean, absolutely delighted - with the recent 10-year reauthorisation of AGOA. [It] garnered bipartisan support in the United States, and that's a clear indication of promotion prosperity, opening markets, and inclusive development and stronger regional integration and good governance on the continent of Africa. "Assistant U.S. Trade Representative Florian Liserstate said, "It's a very long time," he said "Today we repost Jason Hickel's article for Foreign Policy in Focus from 2011 about the AGOA, the sentiment of what we believe is not true today.

The last decade has seen a remarkable surge in U.S. Economic interest in the continent of Africa. Policymakers who have been given a long-term relationship. Most of this effort operates with a rhetoric focused on "partnership" and "development," with the vision of using US trade and investment to lift Africans out of poverty. U.S. Secretary of State Hillary Clinton, United States of America, United States of America.

But a quick look at the trade policy is not a good idea. It does not matter much more than cloak an agenda firmly rooted in economic realpolitik. Michael Battle, the U.S. Ambassador to the African Union, has revealed the blunt urgency of this agenda in a candid but troubling statement: "If we do not invest on the African continent now, we will find that China and India have absorbed its resources without us, and we will wake up and wonder what happened to our golden opportunity of investment.

"The centerpiece of US Trade policy for Africa is the African Growth and Opportunity Act (AGOA). "The most important American initiative on Africa in our country's history." It provides trade preferences for the United States, the United States and the United States -Saharan Africa, which is to be the way to boost the African economy by encouraging exports. President Bush signed the AGOA Acceleration Act of 2004, which extends the policy until 2015.

The Big Catch

It's hard to make a difference. The quintessential example is Lesotho, whose textile industry has been flourishing since joining AGOA and now exports more than $ 400 million worth of manufacturing manufactures to the United States annually.But there's a catch. The U.S. President reserves the right to reevaluate each country for AGOA eligibility on an annual basis; 41 made the cut last year.

In order to qualify for the benefit of the African economy, it is important to be aware of the fact that it is not the case that the state of the economy is not the only way to achieve this "In other words, AGOA eligibility requires." In other words, AGOA eligibility requires. "In other words, AGOA eligibility requires Not just mild economic deregulation but the outright destruction of any and all tariff protections, flinging open American markets that inevitably andermine local industry. And African countries do not really have a choice in the matter, for if they refuse to meet these conditions.

For all of the positive spin that U.S. Policymakers put on AGOA, nobody ever so much as mentions these draconian measures, which are easily as destructive as the dreaded "structural adjustment" conditions the International Monetary Fund attaches to its loans.

Essentially, AGOA amounts to a Free trade agreement with most of the subcontinent.Given that AGOA requires its beneficiaries to eliminate barriers to U.S. Investment, it's not surprising. Trade data shows that Benin, for example, has exported almost nothing to the United States since it became an AGOA member, but has imported some $ 600 million worth of U.S. Goods that have significantly undercut local producers.

Some countries do have a good deal. AGOA rules - but only those with substantial petroleum and mineral deposits. Take Angola, for instance; 99 percent of all of Angola's exports under AGOA have been energy-related. In the Congo, that number reaches close to 100 percent. The same is true of Nigeria, Botswana, and every other country with an oil and mineral portfolio. Indeed, more than 80 percent of all exports under AGOA falls under this sector.AGOA, in other words, Goods while making it easier for the United States to extract oil and minerals.

And since most of Africa's oil and minerals are controlled by Western corporations like Exxon, Shell, and Anglo- American, this is designed to benefit African businesses.

Dubious Eligibility

If that's the tragedy, then here's the farce. AGOA actually does not include a number of progressive conditions for membership. In order to qualify, beneficiaries must develop "economic policy to reduce poverty", "uphold" the rule of law, political pluralism, and the right of due process, a fair trial, and equal protection, "construct" a system to combat corruption and "In addition, beneficiaries must implement the protection of workers' rights, including the right to organize and bargain collectively, a prohibition on the use of any form of forced or compulsory labor, a minimum age for the employment of children, and of acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.

" Countries recognized for corruption, human rights abuses, and labor law violations are routinely approved for AGOA eligibility. Indeed, the countries with the most flagrant abuses are the ones who are the most under AGOA, giving blatant lie to the claim that good governance is a necessary precondition for successful U.S. Investment in Africa.

Cameroon, for example, benefits AGOA eligibility even though the government's rules on undemocratic, one- partystate, regularly obstructs political meetings, harasses journalists, torture human rights activists, and turns a blind eye to child labor. But it has a lot of oil.Neighboring Chad also enjoys AGOA eligibility, despite rampant corruption and a long tradition of arbitrary detentions and extra judicial killings. But it's the Chad-Cameroon - the single biggest US investment in Sub-Saharan Africa - and Bush and Obama have been devoted to protecting the project's U.S. investors.

Eritrea is another example. In 2003, the UN named Eritrea became one of the "World's Most Repressive Regimes." But it gets AGOA eligibility in exchange for having joined "the coalition of the willing" during Bush's was in Iraq. Burkina Faso, Angola, Swaziland, and the Congo all benefit from similar double standards. The issue here is not just that of the United States Does the opposite. By encouraging the deregulation of oil- and mineral-based economies, AGOA.

Search states have no incentive to build up a strong middle class, diversify their economies, or respond to the needs of their citizens In turn, citizens have no incentive to scrutinize government priorities. As the social contract between citizens and the state erodes, endemic corruption inevitably follows, and states become increasingly repressive in order to maintain their grip on power.This is what economists call "the resource curse" or "the paradox of plenty." An overreliance On huge oil and mineral deposits. Up on corruption, inequality, and widespread. This pattern contradicts the common assumption of the economic liberalization translates into political freedom or democratic reforms.

Who Benefits?

Although AGOA is the world's leading supplier of renewable energy, Indeed, most of them are American, Chinese, and Indian. The vast majority of beneficiaries under AGOA are not impoverished Africans, but wealthy foreign corporations. Indeed, AGOA's insistence on the elimination of local trade barriers allows U.S. Companies to bid freely on things On things like mineral concessions and government contracts. In addition to the above, the company has a strong interest in the development of the textile industry.

Raw materials

And AGOA requires the goods to be exported to the United States of America, the United States of America and the United States. The overall effect, then, is that AGOA does not create any market share for African companies. This may

be true. But AGOA does not require the new jobs go to Africans. Indeed, there are a lot of people who are interested in working with the company. Besides, the jobs that AGOA does not exist for Africans are often deeply exploitative. AGOA has encouraged the development of export processing zones (EPZs) across the continent, where labor laws are almost non-existent and wages are rock-bottom in order to attract foreign manufacturers. In the textile industry, the net effect is that of AGOA incentives.

In Kenya in 2006, the average wage of the EPZ workers in Asian sweatshops was 20 cents per hour, which amounts to barely more than a dollar a day - the lowest wages in the country. Most EPZ workers - the majority of whom are women and doubly vulnerable to exploitation - have to work excessive overtime.

Changing AGOA

It does not have to be this way. With a few thoughtful changes, AGOA Africans.First, the economic liberalization condition should be dropped. Rich countries like the United States, Britain, Japan, and China. It's cruel to deny those basic strategies to African countries desperately in need of development. Second, the political reform conditions should be taken seriously, and used to leverage best practices in human rights and labor law.

Third, Local Content rules should require that all U.S. Investments in Africa should be done at least 80 percent of the local labor and local contracts. Finally, I would like to know how much money I can pay for it, but it is not the case Less about the well-being of Africans than about the needs of American corporations. We need to cut through the deceptive rhetoric of U.S. Trade policy and ask the tough questions:

Who really benefits from AGOA?

Does the AGOA increase the welfare and development, or facilitate extraction and exploitation? As Ambassador Battle's statement, the present trade arrangement between the United States and Africa is eerily reminiscent of the era of colonial conquest. In 1875, as Europe set his sights on Africa's vast riches, King Leopold II of Belgium wrote to his ambassador in London, "It's America's turn." "I do not want to miss a good chance of getting a slice of this magnificent African cake." Now, and it's going to be the Obama administration - like Bush before him is a new scramble for Africa.This article was posted on Foreign Policy in Focus on 16 February 2011. 


David Danisa

David Danisa



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