Review of African Political Economy No.101:457-474
© ROAPE Publications Ltd., 2004
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
(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
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