9_2006_AGOA_and_Africa - Review of African Political...

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Review of African Political Economy No.101:457-474 © ROAPE Publications Ltd., 2004 Opportunity? Carol B. Thompson This paper analyses the ‘USA Trade and Development Act’ (aka African Growth and Opportunity Act-AGOA) in the context of the WTO promotion for free trade. First, it briefly reviews ‘free trade’ relations for the African continent. It then analyses the trade relations of the US with Africa, as well as the performance of the US in following its own doctrine of open markets. The core of the paper addresses the trade agreement itself, discussing the conditionalities for eligibility for African countries to enlist the agreement, as well as analysing the provisions for the trade; it gives empirical findings about the impact of the act in its first years. The rhetoric of global trade is filled with promise. We are told that free trade brings opportunity for all people, not just a fortunate few. We are told that it can provide a ladder to a better life, and deliverance from poverty … Sadly, the reality of the international trading system today does not match the rhetoric 1 (Kofi Annan, 10 September 2003). During 1999-2000 no African embassy in Washington, DC opposed the African Growth and Opportunity Act(AGOA) because at last, the United States government would reduce trade barriers – opening the door to the vast American economy. Four years later, African governments found the door opened to only six economies and only a crack. Provisions of AGOA also permit the door to be slammed shut at any time, making it impossible for African enterprises to plan. The first years of the new trade protocol show that it is serving well the interests of the US, especially when the World Trade Organisation (WTO) was again derailed in Cancun in September 2003. However, as recent trade data reveals, it is providing neither growth nor opportunity for African economies. Free Trade Theory vs. Reality Almost from the beginning of the Uruguay Round in (1986-1994), data has shown that the African continent would benefit little, if any, from the World Trade Organisation. The prediction was stark: according to OECD [Organisation for Economic Cooperation and Development] figures, there was only one loser in the Uruguay round, Africa … Africa can expect a contraction of US$2.6 billion per year (van Staden, 1994:18). Now the evaluation of the first years of the WTO is documented and the pessimistic prediction has become dire reality: Africa’s share in world exports fell from about 6 per cent in 1980 to 2.0 per cent in 2002, and its share of world imports from about 4.6 per cent in 1980 to 2.1 per cent in 2002 … More than ISSN 0305-6244 Print/1740-1720 Online/04/030457-18 DOI: 10.1080/0305624042000295549
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458 Review of African Political Economy any other developing region, Africa’s heavy dependence on primary commodities as a source of export earnings has meant that the continent remains vulnerable to the vagaries of the market
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This note was uploaded on 09/03/2011 for the course LAW 211 taught by Professor Lenaghan during the Fall '10 term at University of Western States.

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9_2006_AGOA_and_Africa - Review of African Political...

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