Ambassador Ron Kirk, US Trade Representative, on supporting development via trade

Ambassador Ron Kirk, US Trade Representative

True development involves not only delivering aid, but also promoting economic growth – broad-based, inclusive growth that helps nations develop and lifts people out of poverty. The whole purpose of development is to create the conditions where assistance is no longer needed, and where people have the dignity and the pride of being self-sufficient.

At a time when Africa’s future was less bright, the African Growth and Opportunity Act (AGOA) predicted that Africa would have enormous economic potential, and that it would be in the national interest of the US to help African countries use trade as an engine for economic growth. Today, reports by the World Bank, African Development Bank and other prominent economic institutions highlight the continent’s substantial growth and rising position in the global economy.

Over the past 12 years, AGOA has made an enormous difference for millions of Africans and truly transformed the way the US and Africa interact on trade and economic issues. Non-oil trade from Africa to the US has more than tripled under AGOA – reaching $5bn in 2011. At the same time, US exports to sub-Saharan Africa have also tripled, as Africans have sought more and more US inputs, expertise and joint-venture partnerships. These trade figures have translated into good jobs and higher incomes for both American and African workers. These results have clearly demonstrated that increased US trade with Africa is having a tangible impact on both sides of the Atlantic.

The developmental premise of AGOA remains strong. By providing new market opportunities for African exports, especially of non-traditional and value-added products, AGOA has helped African firms become more competitive internationally. Similarly, AGOA has also provided incentives and support for African economic reforms, which have helped foster an improved business environment in many African countries. This, in turn, has attracted investment and supported increased US exports. AGOA has not only encouraged African leaders to strengthen trade relations with the US, but also to develop and implement African-led solutions to the region’s economic and political challenges.

Over the years, we have also learned about the ordeals that some African countries face as they seek to expand and diversify their trade. For example, there are many difficulties related to infrastructure, transportation, regulatory obstacles and the business environment. In particular, we have learned how important trade capacity building assistance can be to helping African governments and firms identify and develop the market opportunities available under AGOA.

For this reason I announced at the 2011 AGOA Forum in Zambia that the US was committing up to $120m to the African Competitiveness and Trade Expansion Initiative, which funds regional trade hubs in Ghana, Botswana and Kenya. We are already seeing strong results, as these Trade Hubs have provided critical assistance to many African businesses that are new to the US market. African entrepreneurs are now attending trade shows and getting orders for such varied goods as Mauritian seafood, Ghanaian socks, Ethiopian footwear and Swazi jellies.

Another priority I announced at the AGOA Forum was the US’s commitment to renewing AGOA’s third-country fabric provision (TCF), which sustains jobs for thousands of low-income women in Africa, and was set to expire at the end of September 2012. My colleagues and I strongly urged Congress to extend this provision.

We understand how crucial TCF is for the continued survival of Africa’s textile and apparel sector, and how important it is to AGOA’s continued performance and success. I am pleased to say that Congress voted to extend this provision in August, protecting thousands of low-income African women’s jobs.

Finally, some of you may recall I also announced in 2011 that the administration is seeking to define and achieve a seamless renewal of AGOA beyond 2015.

Extending AGOA will help continue long-term trends in Africa toward greater shared prosperity, more solutions led by Africans and increased opportunities for all.

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Ron Kirk

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