The U.S. and Africa: Current and Future Relationships

Presentation by:

Florizelle Liser

Assistant USTR for Africa

U.S. Trade Policy Toward Africa AGOA

WTO Cooperation

Trade Capacity Building

High Level Dialogue

AGOA AGOA extended through 2015 and key to helping

boost two-way trade between the United States and sub-Saharan Africa

Continued success under AGOA will depend on countries’ intensified efforts to promote greater diversification of AGOA trade

Also supporting reform efforts in Africa and generating new investments

AGOA Eligibility Congress established criteria – “continual

progress” toward rule of law, open markets, poverty reduction, labor rights, etc.

Annual review process; input welcome Has resulted in some countries being added,

some dropped, e.g. Liberia 38 countries now eligible

U.S. Trade with Sub-Saharan Africa

0

20

40

60

Billions of Dollars

Total exports 5.9 6.9 6.0 6.9 8.6 10.3 12.1

Total imports 23.5 21.3 17.9 25.6 35.9 50.3 59.2

2000 2001 2002 2003 2004 2005 2006

AGOA Non-Oil Trade Trends

0

0.5

1

1.5

2

2.5

3

3.5

Bill

ion

s o

f D

olla

rs

2001 2002 2003 2004 2005 2006

Non-Oil AGOA Trade

0.0

0.5

1.0

1.5

2.0

Bill

ion

s o

f D

olla

rs

AGOA Apparel Trade

AGOA 0.4 0.8 1.2 1.6 1.4 1.3

Total 0.9 1.1 1.5 1.8 1.5 1.3

2001 2002 2003 2004 2005 2006

0.0

50.0

100.0

150.0

Mill

ion

s o

f D

olla

rs

AGOA Fruits & Nuts Trade

AGOA 29.4 40.1 62.0 73.1 79.5 85.8

Total 43.4 47.6 73.7 88.7 95.4 103.8

2001 2002 2003 2004 2005 2006 0.0

1.0

2.0

3.0

4.0

5.0

Mill

ion

s o

f D

olla

rs

AGOA Footwear Trade

AGOA 0.2 0.3 0.8 0.9 1.9 2.5

Total 1.3 0.9 1.4 1.9 2.3 4.1

2001 2002 2003 2004 2005 2006

Agriculture

AGOA agricultural exports are increasing – more countries and more products, totaling $361 million in 2006 – a 33% increase over 2005

Since placing APHIS experts at the regional hubs, 5 products have gone through pest risk assessments (PRAs), & another 10 are in the pipeline

South Africa most diverse in raw & processed agricultural exports under AGOA – sending everything from fresh citrus, to wine, to macadamia nuts

Rwanda Coffee

With USAID help, moved up value chain from green beans to high-quality specialty coffee

Coffee exports tripled in last 3 years; $6.5 million in 2006

Rwandan Peace Baskets at Macy’s

Macy’s Showcases in NY Store and on Internet

Made by Genocide Survivors, mostly from rural areas

Not just Christmas sales – ongoing partnership

Women get one-third of retail price

USAID, USADF and Nairobi Trade Hub Involved

East African Cut Flowers

EU is now main market, but exports to U.S. growing, up 19% in 2006, to $3 million

USAID assisting

Transport challenges

Kenya, Ethiopia, Uganda, and South Africa exported in 2006

African Cut Flowers at Macy’s African flowers at Macy’s annual

Flower Show

Over 400,000 visitors viewed exhibit of diverse African flowers

Including two 18ft high giraffes made entirely of flowers

A lush centerpiece of African trees, flowers, and plants

Cashews from Mozambique

Used to export raw cashew nuts to India for processing. Cashews processed in India were, in turn, exported to the United States

With the support of USAID and Technoserve, Mozambique is now shipping processed cashews directly to United States and adding more value

US TCB helped to set up cooperatives, produce, distribute, brand, and market the cashews

Total cashew imports from Africa up 73% in 2006, reaching nearly $11 million

Tuna from Mauritius

In 2006, Mauritius exported its first AGOA exports of processed tuna “loins”

Visited new multi-million dollar tuna processing plant that employs 1,400 people

Tuna loins are now the second largest Mauritian export to the United States after textiles and apparel

For three years, AGOA hubs have worked with African fish processors bringing more than eight companies to the annual Boston Seafood Show

Organic Cotton T-Shirts from Uganda

In February 2007, first shipment under AGOA of high-end 100% organic T-shirts from Uganda

Example of vertical integration

Opportunities with organic cotton

Jeans from Mauritius

High-end jeans from a new vertically-integrated factory

The factory imports cotton from West Africa, produces the yarn and fabric, cuts, and sews jeans

Vertical integration allows for greater competitiveness

Also reduces the need for and reliance on third-country fabric

Men’s Sports Jersey from Ethiopia

Ethiopia not previously apparel exporter to U.S. but has seen exports rise in each of last 5 years

Much investment in sector from within Ethiopia or from expatriates

Production-sharing among small firms

Shirts from Madagascar (Eddie Bauer/Tommy Hillfiger)

Madagascar is producing high-end, high-quality shirts

Malagasy apparel firms are targeting specific niches in order to compete with China

One such niche is high-quality shirts that require special detail requirements

AGOA Stimulating Investment

$100s of millions in AGOA-related investment

Apparel, textiles, as well as autos, seafood, & agribusiness

SSA less than 1 percent of U.S FDI

In 2005, US FDI totaled $14.8 billion, up 16%

More U.S. direct investment would support trade with the region and enhance U.S.-African business partnerships

Cooperation on WTO Doha Round

U.S. committed to trade-expanding agreement

Africa has much at stake -- declining share of trade

Main development outcome is new trade flows, esp. South-South trade

Cotton: pursuing on two tracks

Duty-Free/Quota-Free: African input on implementation

Trade Capacity Building

Access to markets alone insufficient to simulate increased trade

TCB essential to diversify African trade globally and with the United States

$394 million for SSA in FY2006. Over a billion dollars since 2001

AGCI: $200 million, 5-year program

Trade Hubs

Export Diversification Workshops

Need to integrate trade into development strategies

High Level Dialogue AGOA Forum encourages high-level dialogue

on new policies and initiatives that could promote mutually beneficial trade and economic development under AGOA

Next AGOA Forum on July 18-19 in Accra Ghana, with theme, “As Trade Grows, Africa Prospers: Optimizing Benefits Under AGOA”

What You Can Do When delegations visit, arrange for visits outside of Washington to meet with U.S. businesspeople.

Know the top 5 products the U.S. imports from your country and be familiar with the major importers. Develop a strategy for identifying new prospective buyers of your products.

Get schedules of U.S. trade shows for buyers: the Boston seafood show, the Miami flower show, the MAGIC apparel show, the New York gift show -- and get your entrepreneurs there. Be sure their presentations are ready for a global stage.

Encourage your governments to update their AGOA strategies to reflect the dynamic trade environment. How many countries are poised to take advantage of the new AGOA 4 textile benefits? How many took advantage of ethnic prints in AGOA 3?

New information is becoming available all the time on African competitiveness issues. For example, the ITC study I mentioned earlier. Feed this information back into your government’s AGOA strategy.

For those of you with TIFAs, make sure follow up occurs on action items.

For those of you from countries who are not in AGOA: Be familiar with the impediments to eligibility and meet regularly with U.S. government agencies to discuss possible ways forward, and then relay this back to key officials in your capitals.