Mauritius boosts ties with US at leaders’ summit; Africa eyes AGOA renewal
Since its original enactment in 2000, AGOA has been the centerpiece of US trade relations with Sub-Saharan Africa, with its performance and effectiveness closely tied to its Third-Country Fabric provision. (Image: Mail & Guardian)
Mauritius Prime Minister Navin Ramgoolam and US National Security Advisor Susan Rice discussed opportunities including through the US-Africa Business Forum, for deepening US trade and investment ties with Mauritius.
They met on August 04, 2014 at the White House on the sidelines of the US-Africa Leaders’ Summit, where the Prime Minister gave an overview of the reforms introduced to render the economy more attractive to investors.
These include a limited tax of 15% and a strategy to fully exploit ocean resources, having already developed the financial, ICT and tourism sectors.
Rice said that the US is ready to offer technical expertise to Mauritius in the exploitation of its maritime resources and will encourage US companies to engage actively in the sector’s development.
She congratulated Mauritius on being the first country in Africa to conclude an agreement with the US Government for suppressing illicit financial flows under the Africa Foreign Account Tax Compliance Act (FATCA).
Moving on, the 13th AGOA Forum is taking place in Washington DC from 1st to 6th August 2014, with a blazing topic of concern in US-Africa trade relations being the impending expiry of the US African Growth and Opportunity Act (AGOA) on September 30, 2015.
Mauritius has been one of the most ardent proponents of AGOA since the time when it was being designed and played a critical role in its adoption by the US Congress.
Mauritian exports under AGOA grew nearly 95% from Rs 3,462 million in 2008 to Rs 6,746 million in 2013, with non-textile products accounting for about 43% of total exports to the US market.
A cornerstone of America`s trade and investment policy with Sub-Saharan Africa, the expiry of the AGOA spells a big question mark for trade relations between US and Africa – unless of course, a much-needed renewal comes to the rescue.
In this context, the US administration has already called for Congress to renew the program well ahead of its expiry date, though with reforms.
US Trade Representative Michael Froman said last week he would work with lawmakers on the length of the renewal.
Apart from duration, possible reforms such as adding new duty-free products, refining eligibility criteria and tweaking regional content limits are also to be thrashed out.
“Seamless renewal will send an important signal to purchasers of AGOA products and investors in AGOA industries who are already making decisions about next year, and in some cases, many years in the future,” Froman said at a meeting with African trade ministers on Monday.
“The sooner we renew our commitment, the more likely it is that they will do the same,” he added.
It may be noted that, since its original enactment in 2000, AGOA has been the centerpiece of US trade relations with Sub-Saharan Africa, with its performance and effectiveness closely tied to its Third-Country Fabric (TCF) provision.
AGOA has also contributed to the creation of more than 1 million jobs in Sub-Saharan Africa and more than 100,000 American jobs.
Trade has more than tripled since AGOA`s enactment in 2000, and US direct investment in Africa has grown almost six-fold.
Not only has AGOA enhanced trade, investment, and job creation throughout the continent, but it has also served to strengthen democratic institutions across Africa.
However, there is room for further progress and greater opportunity for mutually beneficial trade and investment that promote economic growth, development, poverty reduction, democratic, the rule of law, and stability.
Ultimately, it is in the interests of the United States as well to engage and compete in emerging African markets, to boost US-African trade and investment, and to renew and strengthen AGOA.