US/Africa: Trade Meeting, 1/2, 01/14/03

AFRICA ACTION Africa Policy E-Journal January 14, 2003 (030114)

US/Africa: Trade Meeting, 1 (Reposted from sources cited below)

US/African meetings in Mauritius this week focusing on the African Growth and Opportunity Act (AGOA) are proceeding without U.S. President George W. Bush, whose promised Africa trip was postponed suddenly in a brief announcement just before Christmas, Then Secretary of State Colin Powell also backed out, leaving the U.S. delegation to be headed by trade representative Robert Zoellick. On Sunday, Mauritian Minister of International Trade Jayen Cuttaree said Mauritius would make the best of the opportunity, and in the opening session of the NGO forum, Minister of Women's Affairs Arianne Navarre-Marie said, "African Women would like to know how AGOA is going to provide the necesary support for making cheap anti-retrovirals available to their brothers, sisters and children who are dying of AIDS because thay cannot afford the price of such drugs".

Unfortunately, both the reduced level of the U.S. presence in Mauritius this week and the exclusive focus on trade accurately reflect the realities of U.S. policy towards Africa. Strikingly, Bush's balance sheet is deeply in the red even in the realm for which the U.S. seeks to claim credit: trade policy. The damage done by other U.S. trade policies far outweighs the impact of increased AGOA imports from Africa, and an IMF study shows that even those benefits are far less than they might be.

Today's series of two postings contains (1) excerpts from an IMF working paper showing that the benefits in increased textile exports from AGOA are only a fifth of what they could be without the highly restrictive "rules of origin" imposed by the law (see below), and, in a separate posting, (2) excerpts from articles by allAfrica.com on the Mauritius meeting, a press release on the latest report on US/African trade, and links to other sources on related issues.

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2002 International Monetary Fund WP/021158

IMF Working Paper African Department

The African Growth and Opportunity Act and Its Rules of Origin: Generosity Undermined?

Prepared by Aaditya Mattoo, Devesh Roy, and Arvind Subramanian

September 2002

[brief excerpts: The full paper,including tables, is available at: http://www.imf.org/external/pubs/ft/wp/2002/wp02158.pdf]

Abstract

The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. ...

This paper describes the United States recently enacted African Growth and Opportunity Act (AGOA) and assesses its quantitative impact on African exports. The AGOA expands the scope of preferential access of Africa's exports to the United States in key areas such as clothing. However, its medium-term benefits - estimated at about US$100-$140 million, an 8-11 percent addition to current non-oil exports - would have been nearly five times greater (US$540 million) if no restrictive conditions bad been imposed on the terms of market access. The most important of these conditions are the rules of origin with which African exporters of clothing must comply to benefit from duty-free access.

Authors E-Mail Addresses: amattoo @worldbank.org, roy@econ.bsos.umd.edu,asubramanian@imf.org

...

INTRODUCTION

...

The African Growth and Opportunity Act (hereafter "AGOA"), signed into U.S. law as Title 1 of the U.S. Trade and Development Act on May 18, 2000, is a major plank of U.S. initiatives toward the African continent. The Act aims at broadly improving economic policymaking in Africa, enabling countries to embrace globalization, and securing durable political and economic stability. As an incentive for Africa to adopt these policy changes, AGOA offers increased preferential access for African exports to the United States. It envisages the possible conversion of AGOA - which is essentially a one-way preferential arrangement - into reciprocal free trade areas (FTAs) where feasible with interested African countries.

The paper assesses the impact of AGOA. Its main conclusions are the following:

* First, AGOA will provide real opportunities to Africa. Even on conservative estimates about Africa's supply response, Africa's non-oil exports could be raised by 8 Il percent.

* However, the gains from 2005 onward could have been much greater if AGOA (i) had imposed the multifiber agreement (MFA) rule of origin rather than the more stringent"yarn-forward" rule; and (ii) not excluded certain items from its coverage. Our estimates suggest that the absence of these restrictions would have magnified the impact nearly fivefold, resulting in an overall increase in non-oil exports of US$0.54 billion compared withthe US$100-$140 million increase that is expected in the presence of these restrictions.

* Third, these restrictions, particularly on apparel, will come at a particularly inopportune time, as Africa will be exposed to competition from other developing countries when the quotas maintained on the latters' exports under the MFA are eliminated in 2005. On the one hand, Africa's apparel exports will be lower by over 30 percent with the dismantling of the MFA; if, on the other hand, AGOA had provided unrestricted access, the negative impact of the dismantling could be nearly fully offset.

This paper adds to the recent work on the benefits to sub-Saharan Africa of preferential access granted by industrial countries (see Ianchovicina and others 2001 and Hoekman and others 2001). The main conclusion of these papers is that Africa stands to gain, but the bulk of the gains come from preferential access to the Japanese and European agricultural markets. These papers, however, do not explore fully the gains from apparel exports and how these are affected by rules of origin.

II. BACKGROUND: AFRICA'S EXPORTS

... A number of features stand out.

First, at about US$27 billion in 1999, the absolute level of non-oil exports is very low (Table 1), reflecting a slow rate of growth during the 1990s. Non-oil exports from the continent grew at a glacial 0.6 percent per annum, consistent with notion of Africa's marginalization from global trade (Subramanian and Tamirisa, 2001).

Second, while Europe remains the biggest market for SSA's non-oil exports, absorbing about 55 percent, developing countries have seen their share of SSA's exports rise from 25.6 percent in 1990 to over 30 percent in 1999. Interestingly, while the United States accounts for a sizable share (23 percent) of total exports, it is actually a much smaller market (7.4 percent) for non-oil exports. In other words, the bulk of SSA's exports to the United States comprise oil and related products.

Third, SSA's exports remain predominantly agriculture and natural resource-based. Oil accounts for close to 50 percent of exports, agriculture and other commodities for about 36 percent, and manufacturing for a meager 12 percent. This composition has not substantially changed during the 1990s. Clothing, a key sector under AGOA, has been one of the most dynamic, growing at an annual rate of close to 7 percent and has become one of the largest export items.

Fourth, in terms of exports of textiles and clothing, there are interesting differences in the composition and vibrancy of SSA's exports to the three major markets - European Union, United States, and developing countries. Developing countries are the largest market for exports of cotton and textile fibers from SSA, with the EU being the largest market for fabric and yarns and clothing but particularly so for the former category. Exports of clothing have grown most rapidly in the U.S. market, at about 10 percent per annum, from US$187 million in 1990 to US$620 million in 1999, compared with 6.5 percent for the EU (Table 3).

Finally, exports of clothing to the United States remain very concentrated: in 1999 a few countries - those in the South Africa Customs Union (SACU) and Mauritius - accounted for 80 percent and another three countries for a further 17 percent, of SSA's exports (Table 4).

III. AGOA's MAIN PROVISIONS

Prior to AGOA, 48 sub-Saharan African countries were granted preferential access to the U.S. market - essentially paying a zero tariff subject to certain conditions - for a range of exports under the Generalized System of Preferences (GSP). In 2000, the GSP covered about US$4 billion out of Africa's total exports of US$23 billion. The margin of preference - the advantage faced by African exporters compared with other most-favored nation (MFN) suppliers - was about 5 percent (the average MFN tariff rate). AGOA represents two advances over the GSP scheme:

* First, the existing preferential access enjoyed by SSA countries under the GSP schemehas been extended in time; and

* Second, it increases the range of products for which preferential access is granted to include: petroleum products;apparel products, previously subject to quotas under the MFA and tariffs; [and] a range of other agricultural and industrial products. ...

In evaluating the benefits accruing under AGOA, however, it is important to consider not just the import coverage but the magnitude of current trade restrictions. For example, a large portion of the increased coverage under AGOA is accounted for by petroleum products, which faced average tariffs of only 1.5 percent prior to AGOA. The elimination of these tariffs, which will increase the price received by African suppliers (mainly Nigeria, Angola, and Gabon) by about 1 percent, will not yield significant benefits.

The really important incremental benefits provided by AGOA relate to the two non-petroleum categories in the lightly shaded panel in Table 5. The first comprises exports of apparel products and the second a whole range of non-apparel products, including footwear, agricultural products, watches etc. ...

In both these categories, although current exports are low, potential benefits are large because average protection is high: ...

In sum, the conclusions that can be drawn from the above are:

* First, while AGOA has increased the scope for preferential access for African exports,this increase is important only for categories of products which have significant protection. These currently account for 5 percent of total exports and 23 percent of non-oil exports.

* Second, even for these categories, the real medium-term benefits will depend upon the impact of the rules of origin requirements (see below);

* Third, AGOA's generosity was not all encompassing for Africa: for about 1,067 tarifflines (1 percent of non-oil exports), preferential access was not extended, For 893 of these lines preferential access could have been meaningfbl because of the high level of MFN tariffs,

A. AGOA's Provisions on Rules of Origin

As described above, the benefits of the incremental coverage under AGOA - the extension of access to apparel and other products - will hinge crucially on the rules of origin that African exporters will have to meet. These rules vary across these two categories of exports.

Rules of origin for non-apparel exports

Under the GSP scheme duty-free treatment is to be applied to any designated article that meets the requirements of the basic GSP origin and related rules. ...The key is a requirement of 35 percent value addition within the customs territory claiming preference. However, for non-apparel products eligible for duty-free access under AGOA, the 35 percent value added content can be met also by counting production or materials from other beneficiary countries or the United States. The rules of origin clauses are supplemented with implementation requirements. For example, an importer claiming duty-free treatment must make and maintain (for a period of five years from the date of entry) the records validating facts like proof of production, value addition, shipping papers etc.

Rules of origin for apparel exports

AGOA's provisions on rules of origin relating to apparel are different and are summarized in Table 8. They require essentially that apparel be assembled in eligible sub-Saharan African countries and that that the yarn and fabric be made either in the United States or in African countries (as explained below this does not apply to the least developed countries in Africa until 2004). However, apparel imports made with regional (African) fabric and yarn are subject to a cap of 1.5 percent of overall U.S. imports, growing to 3.5 percent of overall imports over an 8-year period.

In addition a number of customs requirements need to be satisfied. To receive the apparel and textile benefits of AGOA, a USTR-chaired inter-agency committee must determine, inter alia, that countries have an effective visa system and enforcement procedures to prevent unlawful transshipment and the use of counterfeit documents.

There is an interesting difference between the rules of origin under the Cotonou Agreement, which governs preferential access to the European Union, and AGOA. The Cotonou rule of origin is based is based on the concept of "double transformation" i.e., if two of the processing stages (yarn into fabric weaving; and fabric into apparel assembly) are done in the beneficiary country, duty free entry into the EU can be enjoyed. Under Cotonou, therefore, yarn can be sourced from anywhere in the world, whereas under AGOA the yarn must come from a beneficiary SSA country or from the United States.

IV. ECOMOMIC MPACT OF AGOA'S APPAREL PROVISIONS

A. AGOA's Apparel Provisions and Their Timing

In order to quantify the economic impact of AGOA, it is necessary to understand the provisions and their timing, which are summarized in Table 9. In the apparel sector, AGOA distinguishes two categories of SSA countries.

Lesser Developed Beneficiary Countries (LDBCs), namely those with per capita GNP under $1500 in 1998 (based on the World Bank Atlas method), and other SSA countries will see their quotas on apparel exports eliminated beginning 200l. [Forty-two countries in sub-Saharan Africa fall below the specified GNP level and hence qualify as an LDBC under AGOA; another two countries Botswana and Namibia have recently been designated as LDBCs despite their high GNP levels. Thus, only the following four do not qualify: Gabon, Mauritius, Seychelles, and South Africa.]

In discussing the empirical findings, an important complication needs to be borne in mind. The changes unleashed by AGOA will be accompanied by other important changes to the external trading environment, most notably the dismantling of the MFA under the Uruguay Round, scheduled for 2004 (shown in italics in the table above). In reality, the impact on African countries will be a combination of these two sets of changes. In the following analysis we shall attempt to isolate the different effects so that the marginal contribution of AGOA can be established. In other words, we shall analyze (i) the marginal impact of AGOA, holding other factors constant and (ii) the total impact of AGOA in conjunction with the dismantling of the MFA.

D. Results

The results are illustrated in Table 12. For a country such as Mauritius, the impact can be summarized as follows

2001-2004

The impact of AGOA during the period 2001 and 2004 will be to raise exports relative to the pre-AGOA situation by about 5 percent. Had there been no rule of origin requirement on Mauritius, the increase in exports due to the tariff preferences accorded by AGOA would have been 36 percent, substantially higher than with rules of origin.

2005-2008

In 2005, when the MFA quotas on Mauritius competitors are eliminated, its exports will be about 26 percent lower than they otherwise would have been. But if AGOA is modified to eliminate the rules of origin requirement, the decline in exports would be 18 percent.

For a least developed country such as Madagascar, the results are more dramatic both on the up side and down.

2001-2004

The impact of AGOA during the period 2002 and 2004 will be to increase exports relative to the pre-AGOA situation by about 92 percent.

2005-2008

In 2005, when the MFA quotas on Madagascar's competitors are eliminated, its exports will be lower by about 19 percent compared with the pre-AGOA situation. But if AGOA is modified to eliminate the rules of origin requirement, exports in 2004 could actually be higher than they are currently despite the elimination of the MFA.

V. REVEALED APPAREL TRADE UNDER AGOA

... Apparel exports have recorded a substantial increase following AGGA: both in terms of values and quantities, exports in 2001 were about 27 percent higher than in 2000. It is striking that the most impressive gains have been recorded by the least developed beneficiary countries: as the table shows, Madagascar, Kenya, Swaziland, and Lesotho have recorded gains varying from 47 percent to 83 percent. In contrast, South Africa and especially Mauritius, have posted more modest growth. ...

A striking feature of the data is that a very small portion of total exports (9-14 percent) from South Africa and Mauritius have benefited from the tariff preference, whereas for the least developed countries not subject to the rule of origin requirement the corresponding share is close to 50 percent, highlighting the restrictive impact of the rules of origin. ln other words, close to 90 percent of the exports of South Africa and Mauritius did not meet the rules of origin requirement.

Given the fact that the LBDCs will be subject to the same rules of origin in 2004, the above serves as a cautionary reminder about the likely effects for the poorer countries after 2004; in other words, export growth may be considerably muted for the LBDCs after 2004 as the rules of origin kick in. ...

VI. OVERALL ASSESSMENT AND CONCLUSIONS

AGOA's impact can be evaluated against two possible benchmarks. The first is current trade and the other is "what might have been" - that is, trade that would have resulted had all restrictions on SSA's exports been eliminated. ...

AGOA will raise the level of non-oil exports by between 8 percent and 11 percent, depending on the restrictiveness of rules of origin in the non-apparel sector. Most of this increase is accounted for by the apparel sector, which is expected to see higher cxports of about 8.3 percent.

We can, however, be a little less circumspect when we compare AGOA against the second benchmark, of fully unrestricted access, which is the level that Africa's trade would have attained had the United States (i) not excluded any product from the scope of AGOA and (ii) not imposed stringent rules of origin requirements to qualify for the benefits under it. ... AGOA as it is now stands will yield only 19-26 percent of the benefits that could have been provided if access had been unconditional. Nearly 80 percent of this shortfall is accounted for by the rules of origin requirements in the apparel sector which will significantly reduce exports below SSA's full potential. ...

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AFRICA ACTION Africa Policy E-Journal January 14, 2003 (030114)

US/Africa: Trade Meeting, 2 (Reposted from sources cited below)

US/African meetings in Mauritius this week focusing on the African Growth and Opportunity Act (AGOA) are proceeding without U.S. President George W. Bush, whose promised Africa trip was postponed suddenly in a brief announcement just before Christmas, Then Secretary of State Colin Powell also backed out, leaving the U.S. delegation to be headed by trade representative Robert Zoellick. On Sunday, Mauritian Minister of International Trade Jayen Cuttaree said Mauritius would still make the best of the opportunity, and in the opening session of the NGO forum, Minister of Women's Affairs Arianne Navarre-Marie said, "African Women would like to know how AGOA is going to provide the necesary support for making cheap anti retrovirals available to their brothers, sisters and children who are dying of aids because thay cannot afford the price of such drugs".

Unfortunately, both the reduced level of the U.S. presence in Mauritius this week and the exclusive focus on trade accurately reflect the current realities of U.S. Africa policy. Strikingly, Bush's balance sheet is deeply in the red even in the realm for which the U.S. seeks to claim credit: trade policy. The damage done by other U.S. trade policies far outweighs the impact of increased AGOA imports from Africa, and an IMF study shows that even those benefits are far less than they might be.

Today's series of two postings contains (1) excerpts from articles by allAfrica.com on the Mauritius meetings, a press release on the latest report on US/African trade, and links to other sources on related issues (see below), and, in a separate posting, (2) excerpts from an IMF working paper showing that the benefits in increased textile exports from AGOA are only a fifth of what they could be without the highly restrictive "rules of origin" imposed by the law,

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Some Progress, Some Uncertainties Ahead of AGOA Forum in Mauritius

http://allAfrica.com

January 10, 2003

By Charles Cobb Jr., Washington, DC

The United States will be pointing to positive numbers showing rising bilateral trade with African countries at next week's "AGOA" forum in Mauritius, arguing that AGOA - the trade and cooperation act intended to boost economic ties between Africa and the U.S. - is proving very effective.

But critics say the small print tells a less positive story; African trade and finance ministers from 38 countries are likely to seek concrete improvements in AGOA's terms at the forum, as well as clarification on political "conditionality" that might be imposed by Washington.

It is also clear that many aspects of the AGOA relationship are being determined elsewhere. Issues of democracy and governance as well as of capacity-building, agricultural subsidies, the continuing debt crisis and unresolved trade issues are still being wrestled with by the World Trade Organization (WTO). And those deliberations will determine the handling of such issues under AGOA.

The U.S.Sub-Saharan African Trade and Cooperation Forum is mandated by the African Growth and Opportunities Act (AGOA) signed into U.S. law in May 2000. Next week's forum is the second such meeting. The first was held in Washington, DC in October, 2001, when President Bush called AGOA, "a roadmap for how the United States and Africa can tap the power of markets to improve the lives of our citizens."

There is disappointment that President Bush, who last month had announced his intention to open the forum, has since cancelled those plans. And Secretary of State Colin Powell will not be in attendance because of "other issues that are pending," said a senior administration official speaking on background.

United States Trade Representative Robert Zoellick will lead the US delegation to Mauritius that includes USAID administrator Andrew Natsios as well as U.S. Under Secretary Of State For Economic Business And Agricultural Affairs, Alan Larson.

Declaring himself "very excited" by the upcoming meeting, Larson, says "AGOA is a centerpiece of our relationship with Sub-Saharan Africa" and stresses the themes of investment, trade and "investing in people".

Mixed record

According to President Bush's May 2002 report to Congress (also mandated by the Act), AGOA has resulted in accelerating trade with Africa. With "substantially all products from sub-Saharan Africa...now eligible to enter the United States duty free," U.S. imports from Africa have increased 61.5 percent over the last two years," according to the White House.

But a closer look at the numbers reveals a thin line between progress and pitfall. While apparel exports to the United States from certain countries - notably Kenya, Madagascar, Lesotho and Mauritius - have dramatically increased in the past two years, by far the greatest gains came in the oil and mining sectors of sub-Saharan Africa, with crude oil representing 64 percent of the total value of African exports to the United States, followed by the platinum group metals at 7 per cent. Apparels represent only 4.5 percent of sub-Saharan exports to the U.S.

Money from oil output buffered sub-Saharan Africa from the global economic turndown in 2001, the latest year for which figures are available. And though global growth dropped to 1.3 percent from 3.8 percent, Africa experienced a 2.7 percent growth rate, down from 3 percent in 2000. According to the IMF it was the first time in five years that sub-Saharan Africa recorded faster growth than the world in general.

But this still doesn't make for an economically healthy Africa. Even with AGOA, foreign investment still seems in flight from the continent. According to the third annual "U.S.-Trade and Investment with Sub-Saharan Africa" report of the U.S. International Trade Commission, sub-Saharan Africa received only $14.3 billion in investments in 2001, or 7.7 percent of global foreign investment flows to developing countries. But almost one-half of those 2001 investment inflows came from the sale of a South African company to a British firm. Without this transaction, investment flows would have totaled an estimated $6.9 billion. nearly 10 percent less than in 2000.

"AGOA has been a real mixed bag, but overall it's a sham," says Bill Fletcher, president of the Washington, D.C.-based TransAfrica Forum. "Exports continue to be largely oil. While in a number of countries there has been an increase in jobs - and that's good - AGOA doesn't carry with it human, environmental and labor rights to protect people in areas where production is supposed to be taking place."

In Lesotho, one of the AGOA success stories with 15,000 new jobs in the country because of the Act, factories produce Wrangler blue jeans and clothing for Wal-Mart discount chain of stores. Workers there have begun complaining of long hours and low pay. But that's better than no work and no pay, say AGOA supporters.

"What I hear when I'm there [in Africa] is that Africans are asking for more trade, not less trade," former U.S. Trade representative for Africa, Rosa M. Whitaker, told allAfrica in a recent interview. "Those people don't have a problem with trade; they're asking for more of it. [You] should talk to those women who have been working and supporting a whole village on their salaries and now having opportunities including educating girls as well as boys."

Nonetheless, says the NGO Bread for the World, in a presentation prepared for the Mauritius meeting, AGOA "is still a hot button issue for some advocacy organizations in the U.S. who say that it does not truly provide a broad range of opportunities for African businesses to trade and grow."

Africans are also asking for better terms of trade, both within the AGOA framework and outside of it. One important concern African ministers have is with the scheduled ending of textile quotas for U.S imports next year. Their still-fragile industries trying to export to the U.S. will face stiff competition from Asian nations like China and Thailand. Even now, many of Lesotho's new apparel factories are owned by Taiwanese and Chinese.

"It's precisely because we recognize the concerns that African producers and some other smaller producers have that we have created a program that will give special preferential benefits to them after the end of quotas," said Under Secretary Larson. AGOA, he explained, promises "tariff-free entry" so even if textile quotas are lifted, as scheduled, across the board, African producers will still continue to benefit from preferential access to the U.S. market.

Larson sees quota-allocation as an issue for the World Trade Organisation, and no proposal to extend import quotas has been proposed in the WTO. "If it were broached in any explicit way, we would have to take a look at it and come to a conclusion. But it isn't that we're for or against; it's simply that the issue hasn't been raised. ...

Political conditionality

Meanwhile, the U.S. Embassy in Swaziland issued a statement last month warning that "abuses of...basic principles of justice and human rights on the rise in Swaziland," is putting that countries eligibility for AGOA at risk. A "warning" letter from the State Department - a little known option under the AGOA legislation - is now being sent to Swaziland."It tells them that 'you are on probation' and unless you do something to correct labor, human rights and economic policies, next January you will be out [of AGOA]," said a senior administration official speaking on background and on condition of anonymity.

Eritrea will also get such a warning letter "for its total crackdown on civil society."

But Swaziland has become the lightening rod for the relationship of AGOA to democratization. A New Year's manifesto by the "illegal" opposition People's United Democratic Movement (Pudemo) called for repeal of a 1973 royal degree that did away with the constitution and banned political parties and opposition to the then King, Sobhuza; and a new coalition of business groups, fearful of losing AGOA eligibility, has given the government until January 20 to commit to democratization.

In Mauritius, African ministers will want to know where the line is drawn between their sovereignty and U.S. authority to impose conditions for participation in AGOA.

"One of the things that trade is supposed to do is help society develop to a place where it can be more liberal politically," says Africa Society president Leonard Robinson who is hoping that some "synergy" between civil society, government and the private business sector will emerge at the end of the Forum.

As well as the two-day ministerial meeting starting on Wednesday January 13, businesses and civil society groups will also have an opportunity to meet beforehand.

The private sector forum organized by the America-Mauritius Chamber of Commerce (AMCham), the Corporate Council on Africa (CCA) and the African Coalition for Trade (ACT) will gather on January 14 to focus on finance, doing business in the United States, trade barriers and biotechnology.

The low level of civil society participation has been one of the criticisms of AGOA and, unlike the private sector forum, the NGO or "shadow Forum" was not held during the 2001 meeting in Washington. "Many African NGOs remain uninformed about what AGOA offers their countries in terms of economic benefits," said the Washington, DC-based Foundation for Democracy in Africa, one of the coordinators of the NGO gathering.

But President Bush's decision not to go to Africa and Mauritius has given some U.S. NGOs second thoughts about attending. "It's 8,000 miles and a lot of money," said the Africa Society's Robinson, explaining his organization's decision not to participate. The Constituency for Africa and TransAfrica have also decided not to go.

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Mauritius Court Declares Anti-AGOA, Anti-War Protest Legal

http://allAfrica.com

January 12, 2003

By Jim Cason, Washington, DC

Mauritian Supreme Court Justice Eddy Balancy declared on Friday that the police had acted outside the law in banning a demonstration against the free trade policies of the United States. The protest is timed to coincide with the opening of the AGOA Ministerial Forum in Mauritius. The judge ordered the police to authorise the demonstration, planned for January 15.

The Platform Against Bush Politics, a coalition of local trade union federations, women's organizations, small agricultural producers and civil society groups, are organizing the demonstration to protest what they believe are the negative impact of AGOA trade law.

The groups also oppose the US plans for a war against Iraq and a number of other US policies, including the refusal of the Bush administration to sign the Kyoto Agreement on global warming.

When the demonstration was announced two weeks ago, the Commissioner of Police in Mauritius banned the gathering, arguing that his officers did not have the capacity to both provide security for the AGOA meetings and a demonstration. But the demonstrators took the police to court and on Friday, the Supreme Court Justice ruled that police could not violate the demonstrators "fundamental right to assemble and express opinions." ...

"It is a big victory for democratic organizations and democracy in Mauritius," said Rajni Lallah, a spokesperson for the Platform Against Bush Politics. In a telephone interview from Port-Louis, she added: "the march is going to go ahead on Wednesday at 14h30." She said the member groups were concerned, however, that they now only had four days to organize the protests.

The Platform, which includes the General Workers' Federation, the Federation des Syndicats de Corps Constuees, and Planteurs du Nord, among others organizations, also plan a "Peoples' Forum" on Monday, January 13, and Wednesday, January 15.

Lallah said participants in the meetings are opposed to the conditions included with the US' AGOA legislation which, they believe, push the government of Mauritius to privatize state-owned companies and to adopt policies that benefit private companies but not the people. "What these overt and other covert conditionalities in AGOA amount to is a recolonization of Africa," she said.

Beyond the AGOA-related issues, the groups are also protesting against U.S. plans for a war against Iraq and the continuing U.S. use of a military base on the Indian Ocean island of Diego Garcia. The protesters, and many others in Mauritius, consider Diego Garcia and the other islands in that area to be a part of their country that were illegally stolen by the British.

Lallah also blasted a parallel Forum for non-governmental organizations (NGOs) that is part of the official AGOA activities, which she charged was organized primarily by US-based NGOs and involved mainly government "front groups" from Mauritius.

One U.S. participant in the official NGO Forum, while refusing to get involved publicly in a debate about this forum, told allAfrica that the Mauritian groups could make a more positive contribution by attending the official NGO meeting rather than protesting.

In addition to groups from Mauritius, Lallah said that Jubilee South (South Africa), the African Trade Network, the pan-African women's network, Women in Law and Development and the Southern African Peoples' Solidarity Network would be participating in the People's Forum events.

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U.S. International Trade Commission (Washington, DC) http://www.usitc.gov

PRESS RELEASE [excerpts]

January 6, 2003, Washington, DC

The U.S. International Trade Commission (ITC) January 6 released "U.S.-Trade and Investment with Sub-Saharan Africa," the third in a series of reports intended to assist the President in developing a comprehensive trade and development policy for the countries of sub-Saharan Africa. [The full ITC report - USITC Publication 3552, December 2002 - is available on the ITC website.]

...

Following are highlights of the report:

-- In 2001, a decrease in U.S. imports from, and an increase in exports to, sub-Saharan Africa resulted in a 13.9 percent decrease in the long-standing U.S. trade deficit with the region. The 2001 deficit measured $14.3 billion, with much of its decrease due to a 58.8 percent increase in U.S. exports of transportation equipment and a 20 percent rise in machinery products.

-- Excluding trade in petroleum, the U.S. trade deficit with the region decreased by 73.7 percent from $3.8 billion in 2000 to $1 billion in 2001. U.S. merchandise exports to sub-Saharan Africa increased from $5.6 billion in 2000 to $6.8 billion in 2001.

-- The largest U.S. exports to sub-Saharan Africa were transportation equipment (42.4 percent share), chemicals and related products (11.6 percent), electronic products (10.4 percent), and machinery (9.9 percent). ...

-- U.S. exports of agricultural products to the region decreased by $111.7 million in 2001. Total U.S. merchandise imports from the region decreased slightly from $22.2 billion in 2000 to $21.1 billion in 2001. ...

-- Major U.S. import sectors from the region included energy-related products (67.8 percent share), minerals and metals (14.6 percent), and textiles and apparel (4.7 percent). ...

-- The first U.S. imports under the African Growth and Opportunity Act (AGOA) were in January 2001. U.S. imports covered under AGOA (including its GSP provisions) totaled $8.2 billion in 2001. The principal suppliers under AGOA (including GSP) were Nigeria ($5.7 billion or 70 percent), Gabon ($938.8 million or 12 percent), and South Africa ($923.2 million or 11 percent).

-- AGOA (including GSP) imports were dominated by U.S. purchases of energy-related products in 2001. The remaining AGOA (including GSP) imports comprised smaller quantities of textiles and apparel, minerals and metals, and transportation equipment.

-- U.S. direct investment flows to the region totaled $798 million in 2001, or less than 0.1 percent of total U.S. direct investment abroad. In 2001, despite large net inflows to Nigeria, U.S. direct investment flows to sub-Saharan Africa decreased by 30.7 percent, compared with a decline of 30.9 percent in total U.S. direct investment abroad.

-- The decline was mainly due to a reversal of capital flows between the United States and South Africa. A drop in the Rand and uncertainty in the region, compounded by events in Zimbabwe, could have contributed to the flight of investment capital from South Africa. Nevertheless, U.S. direct investment position in Africa increased by 10.1 percent in 2001, to $15.9 billion.

-- South Africa hosted $3 billion or 18.6 percent of U.S. assets in Africa, Angola $1.5 billion or 9.4 percent, and Nigeria $1.3 billion or 8.1 percent. U.S. holdings were principally in the petroleum sector in Angola and Nigeria, and in the mining and manufacturing sectors in South Africa.

-- During FY 1999 through FY 2001, U.S. government agencies' funding for trade capacity-building initiatives in sub-Saharan Africa totaled $192 million. ...

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Selected Recent Links

Africa Growth and Opportunity Act
(1) U.S. government site http://www.agoa.gov (2) Mauritius government conference site http://www.agoa.mu/ (3) allAfrica.com features http://allafrica.com/agoa (4) U.S. Trade Representative
http://www.ustr.gov/regions/africa/growth.shtml

U.S. International Trade Commission announces January hearings on proposed U.S.-Southern African Customs Union FTA http://www.usitc.gov/er/nl2002/ER1121Z1.htm

Africa Trade Policy Working Group, Dec. 17 letter on negotiations on Southern Africa Free Trade Agreement http://www.woaafrica.org/trade4.htm

Backsliding on Trade and Health http://www.africaaction.org/docs02/acc0212.htm

Crops and Trade, cashews, coffee, and cotton http://www.africaaction.org/docs02/ag0209a.htm and http://www.africaaction.org/docs02/ag0209b.htm

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Message-Id: <200301141530.h0EFUxV30278@marduk.africapolicy.org> From: "Africa Action" <e-journal@africaaction.org> Date: Tue, 14 Jan 2003 10:32:55 -0500 Subject: US/Africa: Trade Meeting, 1/2, 01/14/03

Editor: Ali B. Ali-Dinar

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