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Why Africa Trade Act May Hurt More Than Help
By Donal Brown
Date: 06-12-00
When President Clinton signed the Africa Growth and Opportunity Act last week, he touted it as a giant step forward in African economic development. But the act will do little to reverse the impact of a decade of malign neglect. PNS commentator Donal Brown monitors African affairs for New California Media.
The recently signed Africa Growth and Opportunity Act will do little for the continent and may even hinder progress.
The act has been hailed as a shift from paternalistic handouts to business partnership -- replacing aid with trade and investment.
According to President Clinton, the act "promotes the kinds of economic reform that will make sub-Saharan nations in the long-run better allies, better trading partners and stronger nations."
The "win-win" argument goes like this. U.S. businesses will gain access to African markets and investment opportunities. Africans will gain because their goods -- mainly minerals and farm products -- will enter the United States duty-free and because the U.S. is removing import quotas for textiles into the United States.
But a closer look shows the opportunity for trade in textiles is a fiction, according to Margareta Strand of Public Citizen, the Washington-based consumer watchdog organization. The Africa Growth and Opportunity Act applies only to African firms that buy cloth from U.S. firms and stitch it into garments for export back to the U.S. Even if it were feasible to buy cloth from the U.S., shipping costs alone would make the garments uncompetitive.
Linda Cotton, a research analyst for the Overseas Development Council -- which has published papers in favor of the Africa Growth and Opportunity Act -- says the textile provisions are timed in a way that means they will not benefit Africa. Countries must prepare for the reduction of tariffs on textiles by 2005 under World Trade Organization mandates. China is expected to dominate the world's textile trade at that time.
Although general U.S. trade regulations contain provisions on the environment and workers' rights sufficient to prevent U.S.-sponsored sweatshops from springing up all over Africa, they are not explicitly part of the Africa Growth and Opportunity Act, Cotton says.
The Africa Growth and Opportunity Act also leaves the U.S. president too much discretion to determine which countries will benefit, Cotton says. There are no quantitative standards for eligibility, only subjective criteria such as whether a country's economy is friendly to investment.
The trade act then may do even more harm than good if politicians use it as evidence they are giving Africa sufficient assistance.
Despite some recent progress on AIDS relief, there has been little will in the United States to offer Africa any real help over the last decade. Indeed, U.S. aid to Africa declined from $826 million in 1991 to $689 million in 1997. This year, the U.S. Agency for International Development requested only $305 million for economic support funds and child survival programs and $513 million for the Development Fund for Africa, a total of $818 million.
Africa is still saddled with the devastating effects of colonial rule. European powers left African peoples with giant western type nation-states -- without the political experience, educational systems, industries and infrastructures needed to run those states. Africa will not emerge without a massive, comprehensive attack on its problems.
One path involves African debt, now closely tied to the structural adjustments imposed by the World Bank. Sub-Saharan Africa owes $179.1 billion, an overwhelming burden. There is plenty of precedent for forgiving debt -- as was done for Germany after World War II.
Education, the basis for development, lags badly. A recent case in point -- the British left little by way of an educational system in Sierra Leone. The absence of educational opportunity created the climate for war in that country.
Education of women is particularly crucial -- educational reform is slower when women are left behind, and educated women make for educated children. And uneducated young women are very vulnerable to sexual pressure from older men, a major contributor to the AIDS crisis.
Even though western countries are moving against AIDS and considering new ways to attack it in Africa, massive investment is needed to establish health services. Most African countries today do not even have the ability to test for HIV.
Finally, war, like AIDS, cripples economic progress. The U.S. should pay its bill to the UN in support of peace-keeping operations. The U.S. can also apply pressure to stop diamond trading that pays for wars.
It is time to devise a creditable plan to end the era of malign neglect of Africa. The African Growth and Opportunity Act does not qualify.

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