Civil Society Advocates Further Liberalisation of AGOA

Joseph Coomson - Ghanaian Chronicle

As the 7th Africa Growth and Opportunity Act (AGOA) summit is in progress, civil society organizations from the United States of America (USA) and Africa in a parallel Summit have called on the US Authorities to further liberalize their market and extend the number products under AGOA for Sub-Sahara Africa (SSA).

Although AGOA added 1,835 products in all to the 4,650 already enjoyed preferential access under the General Systems of Preferences (GSP), they are not far-reaching enough because some products of critical importance to SSA are excluded from the trade preference. Also, the participants at the 6th AGOA Civil Society Forum in Accra dubbed “Optimising benefits under AGOA” noted that preference margins are low and there are significant tariff peaks on the products liberalized under AGOA already enjoy duty and quota-free access under the GSP.

“There is a consensus that AGOA could be more liberal to African countries,” the Coordinator of the Third World Network (TWN), Dr. Yao Graham said.

According to a presentation by Patrick Opoku Asuming of the Political Economy Unit of the TWN, in the case of agriculture products, only 26 additional tariff lines are liberalized for Less Developed Countries (LDCs) under AGOA whiles for non-LDCs, AGOA adds 541 products to the 519 under the GSP. He stated that there are still over 200 agriculture tariff lines or 17% of total number of dutiable agriculture tariff lines with no preference under AGOA or GSP.

The average tariff on these remaining products is higher than those liberalize under AGOA preference margin for under AGOA is 7.7% while the average duty on products excluded are more than 30%.

Secondly, Mr. Asuming stressed that market access in itself does not necessarily leads to export growth. Over three decades of preferential trade arrangements with the EU and African Caribbean and Pacific (ACP) group under the Cotonou Agreement and Everything But Arms have not resulted in significant export growth to the EU market. “This is partly due to the restrictive rules of origin and the presence of Non-Tariff Barriers”.

However, his presentation said the structural constraints to production such as weak distribution networks and communications and transport infrastructure are the main reasons and therefore, market access not accompanied by measures of addressing the supply-side constraints is likely to result in expansion of exports.

On his part, Dr. Yao Graham said the forum will work on a common position to lobby governments including that of the USA to press the case that the mighty USA should liberalize more in terms of access to African products.

“As of now, 95% of the goods entering the USA under AGOA are petroleum products. “Nigeria alone accounts for 71% of agoa products entering the US. So the expectation that it creates the opportunity for manufactured export to the USA has not happened,” he reiterated.

He said the structure of African exports to the US has not changed although some countries have varied their exports such as kenya. On Ghana, he said Ghana should look at the reasons why they can not match supply to the demand in the USA.

Dr. Yao Graham and Vernie Guthrie of the Leon Sullivan Foundations gave the key note addresses. The chairman for the occasion was Augustine Adongo of the Federation of Ghanaian Exporters.

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