The Foreign Service Journal, May 2004

whole Doha Development Round and the recent breakthroughs in the WTO negotiations on intellectual property provisions pertaining to pharmaceuticals are positive exam- ples of United States-Africa cooper- ation fostered by AGOA’s passage. Notwithstanding Amb. Zoellick’s testimony, however, Africa still remains mired on the fringes of the global economy. In a recent study by the United Nations Conference on Trade and Development, the share of African exports in world trade fell from 6 percent in 1980 to 2 percent in 2003. Africa typically receives less than 3 percent of global foreign investment flows, and this would be much less were investments in hydrocarbons excluded. One does not have to be an expert in interna- tional trade or foreign policy to see the economic hard- ship suffered in Africa. A Long Battle It was this economic marginalization that was the cat- alyst for AGOA. In 1994, Rep. Jim McDermott, D- Wash. (a former regional medical officer in Zaire), and his visionary chief of staff, Mike Williams, embarked upon a mission to “think outside the box” and use U.S. trade legislation as an engine to pull economic growth then rather than push it with development assistance. Several factors contributed to this bold vision. First, with the collapse of the Soviet Union, foreign assistance for African nations in return for support of U.S. policy would be less viable. Moreover, even if it were forth- coming, U.S. foreign assistance was viewed as an ineffec- tive lever for change. In the 1980s the failed states of Sudan, Liberia and Zaire were the largest recipients of such assistance and the performance of the multilateral institutions was not much better. Second, with the evolution of a rules-based global trading regime under GATT and the WTO, African countries would be caught in the vise of declining market access agreements. This was particularly true of access to the European Union under the Lome Convention due to the E.U.’s eastward expan- sion. Declining protective tariff levels for infant industries in devel- oping nations also put pressure on Africa. As in most trade legislation that emanates from the House Ways and Means Committee, the first steps were tentative. In the GATT Reauthorization Bill of 1996, Congress directed the Clinton administration to devise a five-year plan of trade measures that would mitigate Africa’s economic tumult. When the first such report was delivered to Congress one year later, members on both sides of the aisle were incensed with the paucity of new ideas. As a result of this woeful response, a core of Ways and Means Committee members, including the powerful Phil Crane, R-Ill., and Charles Rangel, D-N.Y., decided to take the lead on the issue. The result was the first incarnation of the African Growth and Opportunity Act in 1998. AGOA was a foray into terra incognita because it was both a trade act and a development act. In its trade regime AGOA provided eight years of duty-free access for an expanded list of 6,000 items under the Generalized System of Preferences. It also created a special program whereby African apparel (a non-GSP item) manufactured in all but the most developed African countries would enjoy duty- and quota-free access to the U.S. market, even if it was made from Asian fabric. This focus on apparel was modeled on the successes of the Far East and the Caribbean in launch- ing their industrial base with the apparel industry. The development side of AGOA was also sui generis. It directed, inter alia, that the U.S. government create technical assistance programs and investment funds to help Africa integrate with the global trading system. In addition, the legislation called for establishing an annual forum of government and business leaders to monitor and enhance AGOA. It also directed the U.S. Trade Representative’s office to negotiate free trade agree- ments with African nations and regional groupings and created a new assistant U.S. trade representative for Africa. F O C U S 44 F O R E I G N S E R V I C E J O U R N A L / M A Y 2 0 0 4 Anthony Carroll is managing director of Manchester Trade Ltd., a Washington-based business advisory firm (www.manchestertrade.com). H e has over 20 years of experience working on African trade and investment issues, beginning as a Peace Corps Volunteer in Botswana in the late 1970s. He is a frequent speaker for the State Department. Africa’s economic marginalization was the catalyst for AGOA.