8 February 2002

U.S. Trade Representative Zoellick to Visit Africa

Traveling to Kenya, South Africa, and Botswana

By Charles W. Corey
Washington File Staff Correspondent

Washington -- The United States trade representative, Ambassador Robert B. Zoellick, will visit Kenya, South Africa, and Botswana February 12-21 to highlight and encourage a growing trade relationship between the United States and sub-Saharan Africa and to underscore President Bush's commitment to U.S. economic relations with the region.

Briefing reporters on the trip February 8 at the White House, Zoellick said, "I am looking forward to this as an opportunity to spend a lot of time listening and learning and observing the situation" in the region.

Zoellick identified five objectives for the trip, the first of which is to strengthen the ties built between the United States and sub-Saharan African countries based on the African Growth and Opportunity Act (AGOA), which he termed the "cornerstone of our new trade relationship."

Secondly, Zoellick said he wanted to converse with African leaders to encourage the development of African structures and capabilities that would allow the region to participate in increased global trade.

Thirdly, Zoellick told reporters he hopes to advance the objectives of the World Trade Organization (WTO) and, fourthly, he will explore the possibility of establishing a free trade agreement with South Africa and other members of the southern African community.

Lastly, Zoellick said he will seek to "highlight the contributions" that increased trade and economic development can make to help alleviate poverty throughout the region.

Focusing on AGOA, Zoellick reminded his audience that the historic trade agreement not only is working to expand the U.S.-Africa trade relationship, but also can help African nations "win the case for trade within their own countries."

Providing an example of how effective AGOA has been, Zoellick said, "Imports of products that are covered by AGOA totaled $8.4 billion [$8,400 million] in the year 2001 ... a 1,100 percent increase over the year 2000."

What is also happening, he said, is that "AGOA is beginning to diversify the trading relationship" that now exists between the United States and Africa, even though, he acknowledged, much of U.S.-Africa trade is still made up of oil imports from Nigeria.

Citing another example, Zoellick said, "U.S. imports of AGOA-covered products, excluding mineral fuels, totaled over $1.2 billion [$1,200 million] in the first 11 months of 2001," representing a 96 percent increase when compared to the same period in the previous year.

Zoellick provided specific examples of countries that have benefited from AGOA:

-- Madagascar -- U.S. imports of textiles from that country have grown from $22 million in 1998 to $155 million in the first 10 months of 2001. That, Zoellick noted, represents a 700 percent increase in four years.

-- Uganda, which has just announced a new AGOA-related $20 million investment in a spinning mill that will employ some 500 people and benefit local cotton growers.

-- Kenya, which estimates that AGOA will attract $13 million in investments and create 50,000 direct and 150,000 indirect jobs.

*-- Lesotho, which as a result of AGOA has attracted more than $120 million in new investment in one year. By comparison, Zoellick said, that is four times the amount of its annual foreign aid.

-- South Africa, which exported $689 million during the first nine months of 2001 under AGOA.

While African nations benefit from AGOA, the United States also benefits, Zoellick noted, calling the legislation "a two-way street."

"U.S. exports to sub-Saharan Africa increased 29.5 percent in the first nine months of 2001, compared with the same period of 2000," he noted. Major U.S. exports to Africa, according to Zoellick, are transportation equipment, manufactured products, machinery, and chemicals and related products. Additionally, Zoellick told reporters, "AGOA has helped us to achieve, for the first time in our history, broad African support for our global trade agenda."

Zoellick also hailed efforts now under way to expand the legislative aspects of AGOA, noting that the legislation that has already passed in the U.S. House of Representatives, known as AGOA II -- which still must be passed in the Senate -- will add to the already effective AGOA legislation.

(President Clinton signed the African Growth and Opportunity Act [AGOA] into law on May 18, 2000, as Title 1 of the Trade and Development Act of 2000. The act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.

(The African Growth and Opportunity Act provides reforming African countries with the most liberal access to the U.S. market available to any country or region with which the United States does not have a free trade agreement.)

"Now, the need for the increased trade and investment in sub-Saharan Africa is as stark as it is in any region of the world, because this is the poorest region of the world, and still encompasses some 10 percent of the world's population," Zoellick told reporters.

"Sub-Saharan Africa cannot afford further contractions in trade and investment," he warned, noting that estimates are that the region will need at least $100,000 million ($100 billion) in new investment every year to achieve the 6-7 percent growth rates it needs to move ahead.

Private investment is the key to achieving this growth, Zoellick noted. "Until the 1990s," he added, "official development assistance and bilateral donor contributions and support were roughly equivalent to the private capital inflows to developing countries in Africa and elsewhere. But today, the private sector capital inflows account for 85 percent of all the capital flows."

While Africa has made some "significant progress" in the past few years with regard to trade, Zoellick warned that "African trade policies remain the most protectionist in the world, with average tariffs about 19 percent, compared to 12 percent for the rest of the world and 5 percent for industrial countries."

Besides fighting protectionism, Zoellick noted, Africa also needs to build trade capacity. During his visit to the region, the U.S. trade representative said he will announce $8.7 million in AGOA trade capacity building for the Southern African Development Community (SADC), $500,000 for AGOA technical assistance for COMESA -- the Common Market for Eastern and Southern Africa -- and a $300,000 grant to support COMESA's court of justice, which adjudicates disputes within their common market.

Summing up, Zoellick saluted the AGOA legislation as a "catalyst" and a "turning point" in the U.S.-Africa relationship.

In addition to promoting trade while in Africa, Zoellick said he also plans to hold a series of meetings related to health issues, the environment, and biotechnology.

Zoellick, the 13th U.S. trade representative, is a member of Presidnt Bush's Cabinet with the rank of ambassador.