- The Washington Times - Sunday, November 30, 2003

When ministers from 38 African countries gather in Washington Dec. 9-10 for a big meeting on trade, don’t expect protests from the score of nongovernmental organizations and other activists who also will be coming to town. Celebration is more in order. Trade is starting to make a difference in Africa.

Imports to the U.S. from African countries, not counting oil, jumped 50 percent last year. In South Africa, sub-Sahara’s most important economy, exports of automobiles have increased sixteenfold in the past two years. In the tiny country of Lesotho (population 2.2 million), new export-oriented garment factories have created 25,000 jobs — and for the first time in its history, private sector manufacturing employment, thanks to trade, exceeds government employment.

Performances like these are the direct result of the African Growth and Opportunity Act, AGOA. I introduced the original Senate version of this bill, which was enacted in 2000. It lets African countries export some 1,800 products duty-free, without quotas, to the U.S. It is a direct response to developing countries’ long-time plea: trade, not aid, is the real key to ending poverty and bringing about sustainable, long-term economic growth.

In just three years, AGOA has proved them right, but we must do more to build on this early success. That’s why I have just introduced the U.S-African Partnership Act with a bipartisan group of House colleagues (including Rep. Charles Rangel of New York, the Ways and Means Committee’s top Democrat, and Reps. Jim McDermott, Washington Democrat, and Ed Royce, California Republican). The new legislation would guarantee AGOA benefits until to 2015 (otherwise, they will expire in 2008), and delay for four years a provision that will require garment manufacturers in eligible countries to use U.S.- or African-made fabric. If this provision takes effect next year as planned, it might drive out many fledgling textile operations that still rely on Asian inputs.

Most importantly, USAPA fulfills the original promise to establish a more mature economic relationship with African countries that undertake serious economic and political reforms. That effort has been endorsed by nearly all the sub-Saharan African nations, as well as much of the American business community. Only by treating African countries as partners, not problems, can we integrate them into the world economy.

Congress’ trade efforts are the vanguard of a new American engagement with Africa. Earlier this year, Congress pledged to contribute $15 billion over the next five years to battle the HIV/AIDS epidemic, which threatens the future of the entire continent.

And Congress is about to authorize President Bush’s Millennium Challenge Corp., which will offer billions of dollars to developing countries that pursue sound policies of good governance, economic deregulation and privatization. The president’s innovative program builds on the lessons of AGOA.

Despite these signs of progress, Africa remains in bad shape. Per capita output of goods and services actually dropped during the 1990s, according to the World Bank, and with only 1.4 percent of world trade in 2001, sub-Saharan Africa has been falling behind the rest of the world. During the 1990s, global gross domestic product grew a robust 44 percent: the figure for Africa was only 8 percent. And AGOA’s benefits are uneven, with southern Africa taking far better advantage than West Africa, and little to show outside textiles and apparel.

We therefore must attract more private capital into Africa. According to the World Economic Forum, all the countries of Africa receive less foreign investment than Singapore. USAPA’s deadline extensions should reassure investors, and the bill includes some tax incentives, but we must consider other measures, including reinvigorated efforts on debt relief and more promotion of U.S. investment by our government financial institutions.

Africans also know they must diversify away from their reliance on textile exports, which will come under pressure from more efficient Asian competitors once worldwide quotas end in 2005. A promising area is agricultural products and processing. While the bill provides important assistance in this area, there is a way we can help Africans and help ourselves.

I have long argued that America’s large and growing agribusiness subsidy system wastes taxpayer money and distorts the entire U.S. farm economy. These harmful policies, and even worse farm programs in the European Union, inflict collateral damage on developing countries in Africa by dumping below-cost commodities on world markets. In effect, we spend aid dollars to alleviate poverty created by our subsidy dollars. Absent the trade-distorting subsidies, many countries would have a better chance to grow their way out of poverty.

The win-win solution would be to reduce farm subsidies worldwide, but the recent collapse of global trade talks in Cancun over this issue proves there’s no quick solution. The Bush administration should revive the bold agriculture trade plan it unveiled last year to slash global subsidies by $100 billion.

Globalization has fallen into disrepute in recent years, in part because the rich countries are seen as selfish and protectionist. In Africa, we have a chance to demonstrate that trade and investment, underpinned by good government and sound economics, can bring prosperity for all.

The Africans who have cast off dictators and opened their economies have done their part. Now we should do ours.

Richard G. Lugar, Indiana Republican, is chairman of the U.S. Senate Foreign Relations Committee Chairman.


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