Africa seeks quick US decision on trade pact

MOMBASA – Africa is appealing to Washington to act urgently on a long-standing request to extend a pact that boosts African exports to the United States, in order to provide certainty needed to guarantee investment.

The US African Growth and Opportunity Act (AGOA), which guarantees duty and quota-free access for goods from eligible African countries to US markets, will expire within four years. More critically, a provision allowing Africans to import cheap fabrics from third-party states to process for sale in the United States will expire in September.Eligible sub-Saharan countries have weak cotton industries and buy fabric from Asia.When the provision expires they would be forced to import cloth from other African nations or the United States, which they say would increase costs.Jaya Krishna Cuttaree, trade minister of Mauritius, a major player in African commerce talks, said US importers might be reluctant to place orders with AGOA countries in the next few months unless the US government confirmed a later deadline for the expiry of the third-country fabric agreement.Africa has long sought such an extension but is now trying to emphasise the urgency of the situation, according to African trade ministers at talks with US officials in Kenya.”This provision has to be extended,” Cuttaree told Reuters after ministers met US trade officials at a luxury Indian Ocean resort near the Kenyan city of Mombasa.”I think the (US) administration is supportive of our demands.What we were explaining to the administration is the urgency of the situation”.He said some African countries were seeking a five-year extension, but Lesotho’s Trade and Industry Minister Mpho Malie said he expected a timeframe of between two and four years.Malie said countries which had recently qualified for AGOA – such as Benin which qualified in 2004 – were concerned they might not have enough time to invest in factories to turn raw cotton into yarn for textile production.Assistant US Trade Representative for Africa Florizelle Liser said US legislators were planning to introduce a new bill by mid-year that would set dates for the extension of the AGOA agreement and the third country fabric agreement.”We’re looking to extend AGOA to the year 2015 in general, and possibly extend the third-country fabric provision for another three years,” Liser told Reuters.”We think another bill will be introduced that will probably move in the next few months, maybe by mid-year”.”The message from the US is that AGOA is working,” she said, adding that exports from AGOA countries to the United States had increased by 53 per cent in 2003.Textiles and apparel imports into the US from sub-Saharan Africa under AGOA doubled to US$803 million in 2002 and have spurred manufacturing in tiny countries like Swaziland and Lesotho in southern Africa to Kenya and Ghana.Kenyan Trade Minister Mukhisa Kituyi said Africans agreed they must improve efficiency and cut costs to face competition in the coming years from China.Kituyi hosted ministers and officials from 15 countries, US Trade Representative Robert Zoellick and EU Trade Representative Pascal Lamy for exploratory talks on kick- starting global trade negotiations that collapsed in September last year.He said the talks in Kenya had succeeded in marking out Africa’s role in further global trade discussions.It also pegged out the extent of US and EU commitment to a structured agenda and backed a commitment to flexibility “so we do not end up with a wish-list but a negotiated goal”, Kituyi told Reuters.(Additional reporting by Manoah Esipisu) -Nampa-ReutersMore critically, a provision allowing Africans to import cheap fabrics from third-party states to process for sale in the United States will expire in September. Eligible sub-Saharan countries have weak cotton industries and buy fabric from Asia. When the provision expires they would be forced to import cloth from other African nations or the United States, which they say would increase costs. Jaya Krishna Cuttaree, trade minister of Mauritius, a major player in African commerce talks, said US importers might be reluctant to place orders with AGOA countries in the next few months unless the US government confirmed a later deadline for the expiry of the third-country fabric agreement. Africa has long sought such an extension but is now trying to emphasise the urgency of the situation, according to African trade ministers at talks with US officials in Kenya. “This provision has to be extended,” Cuttaree told Reuters after ministers met US trade officials at a luxury Indian Ocean resort near the Kenyan city of Mombasa. “I think the (US) administration is supportive of our demands. What we were explaining to the administration is the urgency of the situation”. He said some African countries were seeking a five-year extension, but Lesotho’s Trade and Industry Minister Mpho Malie said he expected a timeframe of between two and four years. Malie said countries which had recently qualified for AGOA – such as Benin which qualified in 2004 – were concerned they might not have enough time to invest in factories to turn raw cotton into yarn for textile production. Assistant US Trade Representative for Africa Florizelle Liser said US legislators were planning to introduce a new bill by mid-year that would set dates for the extension of the AGOA agreement and the third country fabric agreement. “We’re looking to extend AGOA to the year 2015 in general, and possibly extend the third-country fabric provision for another three years,” Liser told Reuters. “We think another bill will be introduced that will probably move in the next few months, maybe by mid-year”. “The message from the US is that AGOA is working,” she said, adding that exports from AGOA countries to the United States had increased by 53 per cent in 2003. Textiles and apparel imports into the US from sub-Saharan Africa under AGOA doubled to US$803 million in 2002 and have spurred manufacturing in tiny countries like Swaziland and Lesotho in southern Africa to Kenya and Ghana. Kenyan Trade Minister Mukhisa Kituyi said Africans agreed they must improve efficiency and cut costs to face competition in the coming years from China. Kituyi hosted ministers and officials from 15 countries, US Trade Representative Robert Zoellick and EU Trade Representative Pascal Lamy for exploratory talks on kick- starting global trade negotiations that collapsed in September last year. He said the talks in Kenya had succeeded in marking out Africa’s role in further global trade discussions. It also pegged out the extent of US and EU commitment to a structured agenda and backed a commitment to flexibility “so we do not end up with a wish-list but a negotiated goal”, Kituyi told Reuters. (Additional reporting by Manoah Esipisu) -Nampa-Reuters