Bridging the Divide: Africa In the World Economy

1
Bridging the DivideAfrica In the World Economy

• Corporate Council on Africa
• Robert B. Zoellick
• United States Trade Representative
• June 26, 2003

2
Africa Global Economy

• Over past half century, world was marked by a
  struggle between East and West.
• Today, the world faces the challenge of
  overcoming divide between North and South,
  between developed and developing nations.
• No region more defined by this North-South gap
  than Africa more than than 80 of Africans live
  on less than 2 per day.
• Africa being left out of economic globalization
  share of global trade declining for decades
  dropped from nearly 4 in 1960s to under 2
  today.

3
Trade Hope for Africa

• President Bush committed to including Africa
  within an expanding circle of development.
• Hope from a new generation of African leaders
  with new ideas.
• Emerging success stories for trade and
  investment.
• Visit to TRACLO in South Africa 1,200 employees,
  year-round wages, medical care, opportunity for
  women.
• The efforts of your companies, made possible by a
  removal of trade barriers, will multiply stories
  like TRACLO across Africa Such as Heinz in
  Ghana Ramatex in Namibia and Sunflag in
  Tanzania.

4
Africa A Growing Market

• African trade beneficial for the United States,
  too.
• Total U.S.-sub-Saharan Africa trade nearly 24
  billion in 2002
• U.S. exports - 6 billion.
• U.S. imports - 18 billion.
• U.S. exports to South Africa alone greater than
  sales to Russia, whose population is more than 3
  ½ times as large.
• U.S. direct investment increased 5.8 in 2001 to
  10.2 billion, boosted mainly by oil.
• U.S. is sub-Saharan Africas largest
  single-country export market, accounting for 26
  of the regions total exports in 2001.

5
Trade Initiatives for Africa

• Open markets through
• Preferential trade programs (AGOA, GSP)
• Free trade agreements (SACU, Morocco)
• Global negotiations in WTO
• Offering humanitarian help for devastating health
  crises and hunger
• U.S. created practical solution to allow
  developing countries access to drugs for AIDS and
  other infectious epidemics.
• President Bush approved 15 billion in spending
  to fight AIDS.
• U.S. seeks to open markets for agricultural
  biotech products, which can increase productivity
  and income in developing countries.

6
AGOA Catalyst for Trade

• Provides open access to U.S. market for 6485
  products.
• 38 sub-Saharan African countries now eligible for
  AGOA.
• AGOA imports booming
• Total AGOA imports in 2002 reach 9 billion.
• Up 10 from 2001, despite global economic
  slowdown.
• Apparel up 100 transportation up 81 farm
  products, 38.
• 94 of U.S. imports from AGOA beneficiaries enter
  duty-free.
• 19 countries can receive AGOAs textile apparel
  benefits 6 for hand-made, hand-loomed.

7
Future of AGOAExpanded Benefits

• AGOA II expanded benefits, especially in apparel.
• Other goods cars and ice cream from South
  Africa fresh-cut flowers from Kenya Tanzania
  processed lumber auto parts from Ghana.
• Total U.S. investment in sub-Saharan Africa up
  5.1 in 2001.
• Looking to the future
• AGOA III Extension beyond 2008 3rd party
  fabric.
• Greater focus on agriculture, a critical sector
  for Africa.

8
U.S.-SACU FTA

• Moving from one-way preference to full trade
  partnership.
• Members of SACU well-positioned.
• Message about U.S. commitment to Africa.
• Model for trade between developed, developing
  countries.
• Will benefit all of sub-Saharan Africa, not just
  SACU.
• Benefits American business providing exporters
  access to 3.1 billion market, largest in region.
• Levels the playing field
• Many U.S. products currently face high tariffs
  40 on beef 37 on vehicles 30 on household
  goods.
• EU FTA with South Africa, for example, puts U.S.
  companies at disadvantage.
• Successful first round this month.

9
Global Initiatives WTO

• Africa must be part of global economy.
• World Trade Organization Doha Development
  Agenda
• Launched 2001 target for completion January 2005
• U.S.-Africa cooperation central to launch
• Next Ministerial Meeting Cancun, September 2003
• Bold U.S. proposals
• Agriculture Africas 1 employment sector
• Eliminate export subsidies cut average tariffs
  from 62 to 15.
• Cut 100 billion in trade-distorting subsidies
  globally.
• Tariff-Free World for consumer and industrial
  goods
• Cut all tariffs to zero by 2015.
• Services
• Liberalize key sectors Telecom, financial,
  energy, computer, advertising, express delivery.

10
U.S. Proposals at WTOBenefits for Africa

• U.S.-Africa cooperation essential for progress.
• Many common interests agriculture, tariff
  reduction, IPR.
• Developing countries gain 539 billion from
  removal of goods and agriculture barriers, 80
  from trade within developing world.
• Agriculture greater liberalization means greater
  benefits for Africa.
• Under U.S. proposal, developing countries income
  up 9.5 billion, 80 more than under proposals
  that would continue Uruguay Round method
• Services liberalization important to development
  force multipliers.
• TRIPS biotech crucial to health improvements
  poverty reduction.

11
Extending a HandTrade Capacity Building

• U.S. commitment predates Doha
• 1999-2002 345 million for TCB in sub-Saharan
  Africa.
• 105 million in 2002 alone.
• Established three Regional Competitiveness Hubs.
  
• Increased focus on SPS issues USDA officials at
  Hubs.
• Central component of SACU FTA process
• U.S. providing 2 million for trade capacity
  building to help SACU countries participate in
  FTA negotiations.

12
Coalitions for OpennessAfricas Voice Matters

• USTR is a network organization we learn from
  experiences of U.S. and African businesses,
  governments, NGOs.
• Building coalitions for openness
• Need support from African colleagues for
  ambitious market opening efforts in Doha
  negotiation.
• Urge you to remember gains from trade among
  African countries, virtues of imports as well as
  exports.
• Need support from CCA members, explaining trade
  and openness to employees and customers, Congress
  and the public. Tell success stories from Africa.