African Unification Front
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African Growth and Opportunity Act: Beware the Helping Hand
By Nkosinathi Sibanda
In May of 2000, before an enthusiastic audience on the south lawn of the White House, then United States President Bill Clinton signed the African Growth and Opportunity Act (AGOA) into law. The Act purports to grant benefits to sub-Saharan African economies if African governments enact certain domestic laws and pursue measures that will grant American firms the same trade status as African firms. AGOA aims at gradually substituting donor aid, which has been on the decline in the past years, with trade.
The Act is designed to "help Africa help itself;" as Bill Clinton said at the time, "it is not what we can do to Africa, but what we can do with Africa."
However, critics, such as the Association of Concerned African Scholars (ACAS) and the Harlem-based Patrice Lumumba Coalition (lead by fiery community activist Elombe Brath), have argued otherwise. Such groups claim that the AGOA could lead America to helping itself to African markets and the eventual monopolization of African trade and industry. According to ACAS, "…the only group targeted for assistance are the multinationals who largely control Africa's trade and access to rich markets."
The Act, which is the first open trade agreement between the US and Africa, comes at a time of low economic trade between the US and the continent. In 1999, American merchandise exports to Africa totaled $6.7 billion, while imports amounted to $13.4 billion, or slightly more than what Japan exports to the US in a month.
AGOA contains various provisions, one of which calls for an annual high-level forum to discuss economic and trade issues, including the effect of AIDS on the African workforce. Others highlight the need for effective debt relief, direct the president to discuss opportunities for US-sub-Saharan Africa Free Trade Areas, promote Overseas Private Investment Corporation (OPIC) and Export-Import Bank (EXIM) efforts in the region, and reform the Development Fund for Africa. The trade provisions allow sub-Saharan Africa to export duty-free to the US an unlimited amount of apparel made from US fabric, and apparel made from African fabric subject to a cap that will eventually grow to several times the current level of export. Under AGOA, Africa's exports are projected to grow from $564 million in 1999 to $3.6 billion in 2008.
Those who support AGOA, like New York Congressman Charlie Rangel, who contributed to the bill's formulation in his role as the ranking Democrat on the US House of Representatives Ways and Means Committee, see AGOA as a pro-Africa bill that embodies good policy.
"The AGOA set forth a realistic road map that African nations can follow in a transition from development assistance to economic self reliance," Rangel recently said. "One reason why I strongly feel this legislation is so vital now is because it has been such a long wait for the United States to recognize that we should have equitable trade policy with people of color in Africa and the Caribbean." It is the quest for parity against selectivity that makes this Act an important piece of legislature in a global economy where trade is easily power, and power is trade.
In Africa, AGOA has been received with a mixture of tentative optimism and contention, but few African countries have shown any public approval. "Not acceptable to Africa," was how former South African president Nelson Mandela described AGOA at a joint news conference with former US president Clinton in the months that followed the Act's proclamation.
Jagdish N. Bhagwati, an economics professor at Columbia University, has written extensively on trade and development theory. He sees AGOA as an attempt in the right direction, one that is not only inclusive but also tries to correct the West's age-old relationship with Africa in which slavery and colonization were long-standing international commercial policies. Others have said that the AGOA will promote reform in Africa that will leverage efforts to increase investment, expand growth and reduce poverty. Some of its supporters have compared the AGOA with the North American Free Trade Agreement (NAFTA), and PNTR (Permanent Normal Trade Relations) for China.
For others, those opposed to world control of trade by America, the comparison to NAFTA is not a compliment. Congressman Jesse L. Jackson, Jr., has called AGOA the "Africa Recolonization Act," and joined 135 of his colleagues in opposing it. Congressman Jackson has even suggested his own bill, the Human Rights Opportunity Partnership and Empowerment (HOPE) for Africa, which provides for mutually beneficial trade by taking a holistic approach interlocking trade, investment, business facilitation and debt relief as elements that are vital to any successful economic relationship between sub-Saharan Africa and the US.
But beyond the political and legal shortfalls of AGOA are the more serious socio-economic consequences of a trade agreement that is one-sided and does not address the question of Africa's own economic growth in a global context. Are the critics correct? Will the AGOA promote US business interests at the expense of African economic growth and the real needs of Africa's poor? Perhaps only time will tell, but if the history of African involvement with the West has taught us anything, it is to suspend uncritical acceptance of "help."
First published: February 27, 2001
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