The U.S. and Africa: Current and Future Relationships

1. The U.S. and Africa: Current and Future Relationships Presentation by: Florizelle Liser Assistant USTR for Africa

2. U.S. Trade Policy Toward Africa • AGOA • WTO Cooperation • Trade Capacity Building • High Level Dialogue

3. AGOA • AGOA extended through 2015 and key to helping boost two-way trade between the United States and sub-Saharan Africa • Continued success under AGOA will depend on countries’ intensified efforts to promote greater diversification of AGOA trade • Also supporting reform efforts in Africa and generating new investments

4. AGOA Eligibility • Congress established criteria – “continual progress” toward rule of law, open markets, poverty reduction, labor rights, etc. • Annual review process; input welcome • Has resulted in some countries being added, some dropped, e.g. Liberia • 38 countries now eligible

5. U.S. Trade with Sub-Saharan Africa

6. AGOA Non-Oil Trade Trends

7. Agriculture • AGOA agricultural exports are increasing – more countries and more products, totaling $361 million in 2006 – a 33% increase over 2005 • Since placing APHIS experts at the regional hubs, 5 products have gone through pest risk assessments (PRAs), & another 10 are in the pipeline • South Africa most diverse in raw & processed agricultural exports under AGOA – sending everything from fresh citrus, to wine, to macadamia nuts

8. Rwanda Coffee • With USAID help, moved up value chain from green beans to high-quality specialty coffee • Coffee exports tripled in last 3 years; $6.5 million in 2006

9. Rwandan Peace Baskets at Macy’s • Macy’s Showcases in NY Store and on Internet • Made by Genocide Survivors, mostly from rural areas • Not just Christmas sales – ongoing partnership • Women get one-third of retail price • USAID, USADF and Nairobi Trade Hub Involved

10. East African Cut Flowers • EU is now main market, but exports to U.S. growing, up 19% in 2006, to $3 million • USAID assisting • Transport challenges • Kenya, Ethiopia, Uganda, and South Africa exported in 2006

11. African Cut Flowers at Macy’s • African flowers at Macy’s annual Flower Show • Over 400,000 visitors viewed exhibit of diverse African flowers • Including two 18ft high giraffes made entirely of flowers • A lush centerpiece of African trees, flowers, and plants

12. Cashews from Mozambique • Used to export raw cashew nuts to India for processing. Cashews processed in India were, in turn, exported to the United States • With the support of USAID and Technoserve, Mozambique is now shipping processed cashews directly to United States and adding more value • US TCB helped to set up cooperatives, produce, distribute, brand, and market the cashews • Total cashew imports from Africa up 73% in 2006, reaching nearly $11 million

13. Tuna from Mauritius • In 2006, Mauritius exported its first AGOA exports of processed tuna “loins” • Visited new multi-million dollar tuna processing plant that employs 1,400 people • Tuna loins are now the second largest Mauritian export to the United States after textiles and apparel • For three years, AGOA hubs have worked with African fish processors bringing more than eight companies to the annual Boston Seafood Show

14. Organic Cotton T-Shirts from Uganda • In February 2007, first shipment under AGOA of high-end 100% organic T-shirts from Uganda • Example of vertical integration • Opportunities with organic cotton

15. Jeans from Mauritius • High-end jeans from a new vertically-integrated factory • The factory imports cotton from West Africa, produces the yarn and fabric, cuts, and sews jeans • Vertical integration allows for greater competitiveness • Also reduces the need for and reliance on third-country fabric

16. Men’s Sports Jersey from Ethiopia • Ethiopia not previously apparel exporter to U.S. but has seen exports rise in each of last 5 years • Much investment in sector from within Ethiopia or from expatriates • Production-sharing among small firms

17. Shirts from Madagascar (Eddie Bauer/Tommy Hillfiger) • Madagascar is producing high-end, high-quality shirts • Malagasy apparel firms are targeting specific niches in order to compete with China • One such niche is high-quality shirts that require special detail requirements

18. AGOA Stimulating Investment • $100s of millions in AGOA-related investment • Apparel, textiles, as well as autos, seafood, & agribusiness • SSA less than 1 percent of U.S FDI • In 2005, US FDI totaled $14.8 billion, up 16% • More U.S. direct investment would support trade with the region and enhance U.S.-African business partnerships

19. Cooperation on WTO Doha Round • U.S. committed to trade-expanding agreement • Africa has much at stake -- declining share of trade • Main development outcome is new trade flows, esp. South-South trade • Cotton: pursuing on two tracks • Duty-Free/Quota-Free: African input on implementation

20. Trade Capacity Building • Access to markets alone insufficient to simulate increased trade • TCB essential to diversify African trade globally and with the United States • $394 million for SSA in FY2006. Over a billion dollars since 2001 • AGCI: $200 million, 5-year program • Trade Hubs • Export Diversification Workshops • Need to integrate trade into development strategies

21. High Level Dialogue • AGOA Forum encourages high-level dialogue on new policies and initiatives that could promote mutually beneficial trade and economic development under AGOA • Next AGOA Forum on July 18-19 in Accra Ghana, with theme, “As Trade Grows, Africa Prospers: Optimizing Benefits Under AGOA”

22. What You Can Do • When delegations visit, arrange for visits outside of Washington to meet with U.S. businesspeople. • Know the top 5 products the U.S. imports from your country and be familiar with the major importers. Develop a strategy for identifying new prospective buyers of your products. • Get schedules of U.S. trade shows for buyers: the Boston seafood show, the Miami flower show, the MAGIC apparel show, the New York gift show -- and get your entrepreneurs there. Be sure their presentations are ready for a global stage. • Encourage your governments to update their AGOA strategies to reflect the dynamic trade environment. How many countries are poised to take advantage of the new AGOA 4 textile benefits? How many took advantage of ethnic prints in AGOA 3? • New information is becoming available all the time on African competitiveness issues. For example, the ITC study I mentioned earlier. Feed this information back into your government’s AGOA strategy. • For those of you with TIFAs, make sure follow up occurs on action items. • For those of you from countries who are not in AGOA: Be familiar with the impediments to eligibility and meet regularly with U.S. government agencies to discuss possible ways forward, and then relay this back to key officials in your capitals.