Categories
Select Country
Follow Us
Perspectives

Edward Gresser: AGOA 2.0 and the Next U.S.-Africa Partnership

This week’s U.S.-Africa Leaders Summit — the largest-ever meeting of American and African leaders — brings no fewer than 50 national leaders to Washington. Perhaps a couple of them will take time for injera, tibs and coffee at one of DC’s 67 Ethiopian restaurants. If they do, they will get a glimpse of the next U.S.-Africa partnership: one, which uses the Internet and mobile technology to create a large new web of small-business ties between the United States and Africa. And they will have a chance to help create it.

 

At the center of the Summit’s agenda is a call for “swift and seamless renewal” of the African Growth and Opportunity Act (AGOA). Created in 2000 and set to expire in September 2015, AGOA has been the centerpiece of American economic relations with Sub-Saharan Africa since the Clinton administration.  It is an idealistic and often effective program, using tariff waivers and trade promotion to support garment-industry development in Lesotho and Kenya, luxury car investment in South Africa and elite shoemaking in Ethiopia. The summit participants will be right to call for its renewal. But the passage of time and the sudden flowering of “online Africa” have created an opportunity for the next version of AGOA to do more.

Sub-Saharan Africa is now the world’s fastest-growing adopter of mobile Internet technology. Whereas 4 million Africans had Internet access in 2000, 172 million have it today — and the count is growing by 20 million a year. This creates a set of opportunities that did not exist 15 years ago: to help immigrant-owned restaurants and groceries like DC’s Ethiopian restaurants take up their role as natural preferential buyers for African farm groups. They could be joined by specialized manufacturers suppliers who need African materials and parts, African-American community institutions, hospitals using telemedicine to supply specialist care to African clinics, fair trade and artisanal companies, and many others.

The Summit’s opportunity is to take the “AGOA 1.0” of 2000 and broaden it to include the digital, financial and trade-facilitation policies most important to new constituencies. It should do more to support universal Internet access, particularly in least-developed countries where access remains very low. It should support policies in data, telecommunications and financial services that encourage digital trade, while discouraging nationalistic policies that could slow Africa’s Internet boom. And it should do more to help small businesses and nonprofits manage paperwork and fees through trade-facilitation measures. ProgressiveEconomy’s research paper, AGOA 2.0:  Towards the Next U.S.-African Partnership, sets six goals that should join the renewal of the tariff waivers for a 21st-century “AGOA 2.0”:

  1. Support universal low-cost online access through Internet dialogues under the AGOA Ministerials, capacity-building in regulatory policy and public-private partnerships;
  2. Encourage the free international flow of data through agreements and dialogues;
  3. Support development of secure online payment systems and other financial innovations;
  4. Encourage the spread of high-speed Internet access and the use of smartphones and other devices, including by encouraging African governments to eliminate tariffs in IT goods such as smartphones, computers and telecommunications equipment;
  5. Support trade-facilitation implementation through capacity-building;
  6. Waive U.S. fees and charges on small “de minimis” shipments of African goods.

These are the basic institutions and policies — continued growth in access, development of websites and means of payment, effective precision shipping — that can mean a broader U.S.-African partnership. AGOA as it is has earned its good reputation, and a simple and seamless renewal of the program would be entirely possible. But this week’s Summit participants can do more and aim higher.

Top image courtesy of Ken Banks, kiwanja.net

Edward Gresser is Director of ProgressiveEconomy.

Edward Gresser

 

Subscribe to our GE Brief