'Beyond AGOA': Setting the Stage

The Africa Program and the Project on Leadership and Building State Capacity at the Woodrow Wilson Center are proud to announce the launch of our next special series: 'Beyond AGOA.'Signed into law in May of 2000, The African Growth and Opportunity Act seeks to foster stronger relations between the United States and the African continent as a whole while helping economies in many of its countries grow and open themselves up to international trade.

On the eve of 2013's U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum in Addis, Ethiopia, which takes place this week, we will be marking the occasion with a special post series analyzing not only the results of the Act so far, but what our contributors feel are the next best steps, and ways in which AGOA might be missing the mark or in need of improvement. The theme of this year's forum is "Sustainable Transformation through Trade and Technology." Given AGOA's rapidly approaching end date in 2015, there has never been a better time to speak about sustainability, results and renewal.

Below, you will find summarized three papers authored primarily by our Director Steve McDonald and his colleagues Stephen Lande and Dennis Matanda. They speak to the importance of trans-Atlantic trade, investment, and continuity, as well as treating AGOA as a foundation for future change, rather than the goal in itself. We encourage you to investigate these papers on your own, and treat them as a primer for the dialogue to come.

Beyond AGOA: an Updated Case for a Trans-Atlantic Trade and Investment Partnership Between Africa and the United States
by Steve McDonald, Stephen Lande, and Dennis Matanda
April 2013

The 'collective rationale' among those engaged with politics in Africa and the United States is that there are gaps in the United State's Africa policy. Africa is a host to several of the world's fastest growing economies, an expanding middle class, abundant natural resources and a powerful youth population — all reasons much of the world is increasing its foreign direct investment. Meanwhile, the US risks falling behind compared to investors in Beijing, Sao Paulo, and many other places.

Luckily, the African Growth and Opportunity Act, the United State's most comprehensive attempt at partnership with the continent, has the potential to be a strong baseline for future interaction. But before it can be enhanced or extended, the policy community must face that AGOA has been inadequate in helping bring about the transformation of some of Africa's economies. Bigger picture reforms of the program will be necessary, and it is those who advocate for simple extension or small changes that threaten economic co-operation between the United States and Africa the most. Renewal must be the highlight of United States African policy as a whole, not only it's approach to AGOA. The authors of this paper argue for investment promotion, regional integration, and an exhaustive overhaul of standing programs as a means for moving forward. The final word is that Africa's place in the global economy must now be as an equal partner; sidestepping the aid paradigm is a key part of global economic progress. And the current political situation is ideal for the success of just such a maneuver.
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The Trans-Atlantic South Partnership: Positions on Building a Mutually Beneficial Partnership with Africa
by Steve McDonald, Stephen Lande, and Dennis Matanda
May-June 2013

The United States faces a serious challenge to maintaining any eminence it may have in engagement with African growth. This comes from, in part, the growing investment coming from China and the European Union. With the US's "relatively uncluttered trade policy agenda for 2013," there is time to engage with the implementation of AGOA renewal alongside other Congressional activity what will help grow the 'US Commercial Footprint' and tap African economic growth. In terms of enhancing AGOA, the Trans-Atlantic South Partnership believes that this element of its agenda must center on several things:

• increasing subsidies and investment to make US institutions and firms more competitive while addressing in-house limitations to African investment
• supporting regional integration in light of historical trends that undermined healthy economic growth in the continent
• extending AGOA at least 10 years
• minimizing import barriers, especially agricultural
• and seeking to not only review but remove and replace activities that are ineffective and unnecessarily unilateral.

The US response must be comprehensive and strategic in order to foster the kind of economic relationship it hopes for; anything less will cede it's access to Africa's economic potential.
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Going Beyond AGOA: Ideas for a Trans-Atlantic Partnership with Africa
by Steve McDonald, Stephen Lande, and Dennis Matanda
June 2013

This publication outlines the recommendations of the Wilson Center and Manchester Trade on improving AGOA's implementation. The authors and their respective organizations feel that, while the strategy within is ambitious, it is also a "realistic and practical" way to not only seamlessly reinvigorate AGOA but lay the foundations for higher US participation in African economies and a more level playing field for US investors. Importantly, the document prefers heavy enhancement and expansion to renewal or small changes, taking advantage of the "perfect storm" for incorporation of what US Trade Representative Michael Froman calls the 'Whole of Government Approach.' Key recommendations include:

• Designating certain agricultural commodities for duty free treatments, like has been done for apparel exports
• Stronger market access provisions
• Review of restrictive unilateral programs
• Developing special purpose vehicles alongside development banks and other lending institutions
• Integration of regional African economies

The authors believe that benefits from these additions and reforms, and others described within, will fall to all stakeholders: Africans, Europeans, Americans, and anyone interacting economically with the African continent. The Obama administration has the opportunity to create a lasting legacy, and it will be remembered as a failure if lack of engagement results in faltering trade with the Africa of the future.
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Photo credits to Breezy Baldwin on Flickr