The Africa Growth and Opportunity Act:
REAL PABTNERSHIP OR "OLD WINE IN NEW BOTTLES"?
By JULIUS NYANG ORO

Will the recently enacted Africa Growth and Opportunity Act of the U. S. Have significant effect on the ability of African countries to penetrate the American market?
What options do Africans have to create more dynamic economies? These questions are discussed by Julius E. Nyang'oro, Chairman, African and Afro-American Studies Department, University of Norht Carolina, Chapel Hill.

INTRODUCTION
In the past few years, the lexicon in United States Africa policy has moved away from sustainable development to "market led growth". The shift has been subtle, but has had important consequences for U. S. Policy towards Africa, particularly in the economic realm. The reasons for the shift are rooted in the contradictory historical link that the U. S. Has had with Africa in the past four decades, especially as Africa played some role in the Cold War. At one level, the shift in the lexicon of U. S. Africa policy is actually the reality of the post Cold War world.
In the early to mid 1990s, budget minded members f the U. S. Congress began to question the benefits of U. S. Aid programs which never seemed to make a difference in the elimination of poverty, or in ensuring political stability. Indeed "friends' of the U. S. In Africa seemed to be the most corrupt and politically unstable, with rising levels of poverty. Two countries that come to mind in this regard are Kenya under Daniel arap Moi, and Zaire under the late dictator, Mobutu Sese Seko. Thus levels of U. S. Assistance to sub-Saharan Africa (SSA), which had been falling since the end of the Cold War, had cut development assistance to Africa by 25 percent, eliminated the Development Fund for Africa, which earmarked money for grassroots development and community based projects, and frozen U. S. Funding for the Wold Bank's low interest loan program, which provides about 50 percent of its loans to African countries (Cason 1997:174-53). The "sustainable development" approach, partly involving more use of nongovern-mental organization (NGOs) as subcontractors for U. S. Government aid to Africa, now seems to have taken a back seat to a more aggressive market oriented approach. Why the shift?
Some members of Congress justified a reduction in U. S. Aid to Africa by pointing to the relatively limited amount of commerce between the U. S. And Africa. This argument is at the core of the politically self centered approach of U. S. Policy since the end of the Cold War. Why waste money on a region of little economic or strategic value to the U. S.? Indeed, under globalization, Africa's participation in international trade is limited. Estimates of SSA's share of global trade are consistently below 4 percent. Besides civil conflict in the subregion, widespread poverty is a drag on export production and investment possibilities, a point highlighted by a recent World Bank study (2000:7-47). Finally, the provisions under the World Trade Organization's Uruguay Round threaten to further marginalize African economies which do not already have a growing export based economy, meaning practically the whole SSA subregion.
As the consequences of the Uruguay Round and the end of the Cold War were becoming clear, some African business people, and Americans doing business in Africa, organized a lobbying effort to convince Congress of Africa's economic importance. This effort led to the inception of the Africa Growth and Opportunity Act (AGOA) which was signed into law by President Bill Clinton on May 18, 2000 as part of the larger Trade and Development Act of 2000. The U. S. Corporate Council on Africa (CCA) immediately praised the Act in its official newsletter, Business Link Africa:
The Africa trade bill will expand trade and commercial relations between the United States and sub-Saharan Africa and lifts or relaxes U. S. Input quotas of apparel manufactured in 48 sub-Saharan countries. It will put not place a viable foundation for comprehensive economic relations and a new era of cooperation with Africa. The legislation makes the first major American trade bill enacted into law in six years. CCA President Stephen Hayes referred to the congressional passage as "a momentous moment for American business in Africa'
It might be a momentous moment for American business in Africa, but what of its effect on African economies, and the ability of African countries to penetrate the American market?

ESSENTIALS OF THE ACT
The essentials of the Act can be found in Sec. 104, dealing with eligibility requirements, which is left in the hands of the President of the United States to determine whether a country becomes a beneficiary under terms of the Act.
Sec. 104 reads as follows:
The President is authorized to designate a sub sub-Saharan African country as an eligible sub-Saharan African country (to receive benefits under the Act) if the President determines that the counry:
(1) Has established, or is making continual progress toward establishing:
A market based economy that protects private property rights, incorporates an open rules based trading system, and minimizes government interference in the economy through measures such as price controls, subsidies, and government ownership of economic assets:
The rule of law, political pluralism, and the right to due process, a fair trial, and equal protection under the law;
The elimination of barriers to United States trade and investment, including by:
The provision of national treatment and measures to create an environment conducive to domestic and foreign investment;
The protection of intellectual property: and
The resolution of bilateral trade and investment disputes;
Economic policies to reduce poverty, increase the availability of health care and educational opportunities, expand physical infrastructure, promote the development of private enterprise, and encourage the formation of capital markets through microcredit or other programs:
A system to combat corruption and bribery, such as signing and implementing the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions: and
Protection of internationally recognized worker rights, including the right of association, the right to organize and bargain collectively, a prohibition on the use of any form of forced or compulsory labor, a minimum age for the employment of children, and acceptable conditions of work with respect to minimum wages, hours of work and occupational safety and health;
(2) Does not engage in activities that undermine United States national security r foreign policy interests; and
(3) Does not engage in gross violations of internationally recognized human rights or provide support for acts of international terrorism, and cooperates in international efforts to eliminate human rights violations and terrorist activities.
Continuing Compliance If the President determines that an eligible sub-Saharan African country is not making continual progress in meeting the requirements described in subsection (a) (1), the President shall terminate the designation of the country made pursuant to subsection (a).
Of considerable interest to Africa, a special provision on textiles was included in the Act. Sec. 112 states:
Preferential Treatment Textile and apparel articles described in subsection (b) that are imported directly into the customs territory of the United States from a beneficiary sub-Saharan African country, described in section 506A(c) of the Trade Act of 1974, shall enter the United States free of duty and free of any quantitative limitations, in accordance with the provisions set forth in subsection (b), if the country has satisfied the requirements set forth in section 113.
Products Covered The preferential treatment described in subsection (a) shall apply only to the following textile and apparel products:
(1) Apparel articles assembled in beneficiary sub-saharan African countries Apparel articles assembled in one or more beneficiary sub-Saharan African countries from fabrics wholly formed and cut in the United States, from yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States, and are wholly formed and cut in the United States).
The special provision on textiles was added on the assumption that textiles have occupied a special place in history in jumpstarting industrialism. Certainly this had been the case in 18th century England, for Newly Industrializing Countries (NICS) in the 1960s-1980s, and there fore should be the case for Africa in the 21st century.

ANALYSIS OF THE ACT
To supporters of the Act, AGOA is the best thing to have happened to US-African relations in a long time, although one may cynically wonder what good thing has characterized the relationship between the two sides in recent times. The U. S. Has historically concentrated its trade and economic relations with Canada, Western Europe and now, countries of the Pacific Rim. Indeed, supporters of AGOA may be right in suggesting a renewal and invigorated effort on the part of the U. S. In identifying trade with Africa as the best way to push Africa into globalization.
The problem with that argument, however, is the fact that Africa is already part of the global economy. The complaints that many Africans have about their role in the global economy is that the region is still based on the old traditional dependency relationship which has characterized North-South relations for centuries (Nyang'oro, 1999). AGOA is not about to change the substance of that relationship. Indeed, arguably, AGOA seeks to replicate a set of colonial ties with African countries similar to those enjoyed by the European Union (EU) via Lome agreements. Lome itself has proved to be unsatisfactory as a mechanism for transforming Africa's economies because of its insistence on allowing preferential treatment for African primary exports in the EU which have little room for sustained value added activity (Rugumamu, 1999). AGOA also has a sits central tenet, promotion of "openness" for African economies.
Reading Sec. 104 of the Act tells us who is really in charge of the relationship. It is the President of the United States who shall determine if African countries are in compliance with the provisions of the Act to allow continued benefits of access to the American market by African exporters. One may not find it useful to argue point by point the difficulties of implementing the provisions of the Act, but it is possible to make a general argument against the thrust of the Act. Sec. 104 actually reads like a combination of the Uruguay Round on matters such as protection of intellectual property, and International Monetary Fund (IMF ) World Bank condi-tionality which in Africa is known as structural adjustment.
Perhaps this where the real issue lies the further insistence on both political and economic reform for African countries as the price they have to pay to access the U. S. Market. Indeed, in the last two decades, SSA markets have progressively become more open under structural adjustment, even though African governments have continued to complain about it. Given their weak bargaining power, however, their complaints have received little sympathy from international financial institutions. The curious question then is if indeed African economies have been progressively becoming more open, why would the U. S. Embark on a major initiative such as AGOA?
The answer probably lies in the fact that the U. S., as it continues to be the leader in global commerce, is not willing to cede any region to its competitors. Indeed, the late U. S. Commerce Secretary Ron Brown once said that the U. S. Was going to aggressively attempt to penetrate African markets that previously had been the monopoly of EU via former colonial ties. This is well and good for American business, but is it equally good for African exports? At first glance one may argue that AGOA is good for Africa, otherwise why would the African Diplomatic Corps in Washington so enthusiastically support the Act through a forum known as African Growth and Opportunity Act Coalition, Inc?
Support for AGOA by the African Diplomatic Corps is a poor measure of the appropriateness of AGOA as an engine for Africa's economic growth. African embassies in Washington could not afford to be seen as being opposed to a major Congressional initiative. These embassies by now have learned the lesson that, as the sole remaining global super power, the U. S. Wields tremendous influence in world affairs, and particularly in global financial institutions which African countries turn to for assistance from time to time. Their countries cannot, there fore, afford to be isolated, or seen to be less appreciative of U. S. Efforts in this regard. Cynically, one may also point out that because of the tremendous economic difficulties in most countries, African governments are willing to try anything that may give them an opportunity to tap into the most vigorous market the U. S. However unrealistic that hope may be. Take the textile example.
As Sec. 112 of AGOA states, there will be preferential treatment for textile and apparel articles imported into the United States from a beneficiary SSA country. The section, however, quickly proceeds to say that the preferential treatment shall apply only to apparel articles assembled in one or more beneficiary sub-Saharan African countries from fabrics wholly formed and cut in the United States, and yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States and are wholly formed and cut in the United States.)
What this provision does for African textile manufacturers is to give with one hand, and take away with the other. It is a great deal for American yarn manufacturers because it provides them with the advantage of being the principal (if not sole) suppliers of yarn for apparel that will then get preferential treatment for importation of the United States. In order to access the American market, African producers will be well advised to use American suppliers of yarn. The substantive issues of benefits under AGOA, however, go beyond the supply of yarn.
Increased access for textile would actually make very little difference to the overwhelming majority of African countries; indeed, AGOA itself acknowledges this point when it notes that African textile and apparel exports represent less than 1 percent of all textile and apparel exports to the United States, and in the next few years, it is unlikely to exceed 3 percent. Eighty seven percent of the United States textile imports from Africa in 1996 came from only four countries: Mauritius (43 percent), South Africa (20 percent), Lesotho (17 percent), and Kenya (7 percent). Of the remaining imports, 24 countries in SSA each exported textiles worth US$100,000 or less (ITC, 1997). Given the fact that textile exports currently con stitute such a small portion of African countries economies, it is reasonable to conclude that the presumed expanded access via AGOA is trivial. The same is likely to be true for other African manufacturing exports.
Trade statistics for 1998 indicate that Africa's exports to the U. S. Are primarily composed of raw materials such as oil products and minerals, and some agricultural products. Crude petroleum accounted for 58 percent of all imports, followed by platinum at 8 percent, petroleum oils at 3 percent, and cocoa beans at 3 percent. Moreover, 85 percent of all import from SSA came from only five countries Nigeria, 32 percent; Angola, 17 percent Gabon, 10 percent; and Cote d'Ivoire, percent again, reflecting the predominance of crude petroleum in the composition of exports (Dagne and Sek, 1999.3-4) . The rest of the subregion conducts very little trade with the U. S. While admittedly the general absence of trades between the U. S. And SSA it one of the ills AGOA seeks to address, ti is a tremendous leap to suggest that the possible marginal increase in textile exports will amount to a significant economic benefit for SSA.

POLICY IMPLICATIONS FOR AFRICA
The analysis of AGOA so far suggests that there is little direct benefit to be gained by African countries as a result of the Act being adopted as the centerpiece of American economic policy towards SSA. It is quite clear that AGOA reiterates economic conditionality as an underlying principal of the relationship between the United States and Africa. The same as an underlying principal of the relationship between the United States and Africa. The same conditionalities are also the centerpiece of IMF/World Bank relationship with Africa. Critics of conditionality abound (ROAPE, 1994; 1995), but perhaps it is more important to concretely look at SSA's political economy in order to better appreciate the impossibility of AGOA making any appreciable impact on Africa's development.
While it is true many of the policies pursued by African governments in the 1970s and 1980s led to the economic crisis that continues to affect SSA, it is also true that conditions associated with, and reflective of, historical underdevelopment still play a key role in the economic difficulties in which SSA countries find themselves. It should be recalled that countries such as Tanzania and Mozambique got into economic trouble in the 1970s because they had made concrete policy choices in social investment, education, health care, etc. The reason for these choices was that the governments in question saw social investment as a way of overcoming underdevelopment. Unfortunately, the global economy, but particularly the rise in oil prices and the related increase in the price of industrial goods created the economic havoc that required IMF/World Bank intervention. In some cases, such as Zaire, it is true that African leaders were simply incompetent and corrupt, thus allowing their countries to suffer economically. All these realities have to be acknowledged; as indeed the reality that despoite two decades of adjustment, SSA economies are yet to see serious improvement (Callaght and Ravenhill, 1993; ROAPE, 1994;1995)
What we are left with therefore, is a difficult situation, where the range of options open to African countries is fairly limited. One could envisage two principal scenarios which would be played out on the basis of choices made by African governments regarding both AGOA, and by extension IMF/World Bank conditionality. Scenario one would be that African countries would refuse U.S. overtures under AGOA and call it what it really is: a reiteration of economic and political conditionality, and refuse to take it. This choice would elicit a fairly negative reaction by the U. S. And result in the economic and political isolation of African countries, clearly an undesirable situation. So in many ways this was not going to be a choice to be taken by African countries.
The second scenario is what actually happened. African countries accepted AGOA and pretended that it would result in tremendous benefit to them. If AGOA is going to be Africa friendly, arguably IMF/World bank conditionality is also Africa friendly. The point is that AGOA is going to affect US-Africa trade relations only marginally. African countries hailed AGOA as a new phase in U. S. African relations because it was politically expedient to do so, but in reality the answer to Africa's economic transformation lies with what happens on the African continent itself. Unless there is a real concerted effort by African government to transform both the economic and political relationships within their own boundaries, the global marginalization which they consistently complain about will continue.
That is way the choices open to Africa include one more option: to pursue a predominantly continent (homegrown) strategy which would take into account the global reality, but also let loose the dynamism which has been shown by the much maligned "informal" economy. In other words, there is a need to go back and ask fundamental questions about development, and to identify what the key agents of development would be. In the 1970s, when such issues were raised, the automatic response, particularly of the left, was that socialism was the answer. This of course accounted for the high rate of receptivity of socialist ideology in the continent during this period (Babu, 1981). There was also talk of "autonomous" development, although this thesis always remained half baked and incomplete. Thus, even as the economies of Africa continued to falter in the 1980s, there was no clear statement of a local, African strategy for economic development.
Globalization in some way may actually provide an opportunity for Africa to pursue an economic development strategy that may prove more dynamic than earlier models. It is true that little has accrued to Africa under globalization, but globalization as a process has created "hierarchies" of production, and has produced regionalism as a structural reality in production. Thus, the discourse on globalism is also heavily punctuated by a discussion of the "Pacific Rim", "European Union", "UAFTA ", etc. This is discourse on regionalism. The implications are that each region comes to the global table having set its house in order. Otherwise, you will be swept by forces that are beyond your control. If then, the logic is that of regionalism, African countries need to get out of their complacency and aggressively pursue policies to make the African region dynamic economically. There must be genuine regional integration efforts to allow for diversification in production. Tariff and nontariff barriers to economic interaction on the continent must give way to integration driven by African genius. The analogy of the African informal economy is appropriate here because in essence the informal economy has been a primary mechanism of commodity exchange on the continent for a long time. Had it not been for this type of economy, many countries would have collapsed under the weight of economic decline in the 1980s.
What this option recognizes there fore, is that while it is important for African countries to recognize the thrust of globalization, regionalism is still the sure way of incrementally becoming a recognized player in the global economy, the failure of the African Economic Community to take off as foreseen in the Abuja Declaration says more about the incompetence of African leadership than it does about the idea itself. At issue here is what African countries can do to ensure that a genuinely African strategy of development takes center stage in the development discourse. One of the best ways to approach this question is to go back to the twin issues of political and economic integration. Political integration at this stage does not have to mean abandoning of age-old sovereignty that all of these states so jealously guard, but rather that they have a common purpose in pursuing development. Unity of purpose would help, for example, when African countries negotiate with international financial institutions on issues of conditionality. It would be inherently difficult for the World Bank to run roughshod on fifty countries in terms of conditionality, but it now is fairly easy because the Bank deals with each African country on an individual basis.
A common purpose in political terms would have a positive effect in economic terms. Many of the subregtional economic arrangements in SSA have failed to take off because they have been overshadowed and or hampered by political difficulties. A case in point is the Economic Community of West African States (ECOWAS), established with much fanfare in the early 1970s, on the promise that the West African region was ripe for economic integration and that ECOWAS would be the vehicle for this. Right after its establishment, however, ECOWAS began suffering from the "Francophone/Anglophone" divide, the "Nigeria versus the rest" problem, and a host of other issues. The point here is that ECOWAS was really not politically ready to take off. Countries in the region were still steeped in old colonial thinking and way support, let alone even think about, a new and more dynamic arrangement.
While ECOWAS was being established, the East African Community (EAC) was disintegrating. Again, the cause was political difference which could not be resolved in order to enhance and revamp a Community which had existed in one form or another since 1948. The way the EAC broke up illus-trates the fundamental problems in regional integration on the continent. Ten years afterward, 1977, EAC member countries were still negotiating through the World Bank on the division of the Community's assets a clear indication that, at its core, the Community was not really East African. At present, a revived Community is in the works, but it is unclear whether the original problems, including how to think about how the economic benefits of the Community would accrue to individual countries, have been resolved.
All these issues lead to one inevitable conclusion. If, indeed, we acknowledge that regionalism is an important way of envisioning an economic development strategy, then the region must establish a viable instrument solely responsible for identifying critical areas of investment on a continental basis. The continental approach is absolutely necessary and the only logical outcome of realities on the continent, given that individual economies are, for all intents and purposes, not viable. The question thus becomes, why have African countries not aggressively pursued a continental strategy? The answer lies in the mentality of the leadership, always so narrow that it reflects only parochial interests which may not even be national. The big question is whether the Organization of African Unity (OAU) could serve as a basis for new regional institutionalism in the continent. The answer is probably "no" at this point because of the general incompetence of the OAU. The continent must envisage a totally different mechanism which must begin by in essence undermining "national" economies and projecting development largely in a continental framework.
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