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African leaders want U.S. trade deal renewed for 15 more years

05 August 2014, 12:30

Washington - African leaders urged the United States on Monday to renew a trade benefits program giving duty-free access to billions of dollars of African exports for 15 years, saying it would help cement trade relations and boost development in the region.

South African President Jacob Zuma, one of nearly 50 African leaders in Washington to attend a three-day summit, said the renewal of the African Growth and Opportunity Act (AGOA) when it expires next year was one of the key issues for this week's talks.

"Almost 95 percent of South African exports receive preferential treatment under AGOA," Zuma said at a U.S. Chamber of Commerce event, joining calls by the African Union for a 15-year extension.

"We strongly believe that by endorsing the extension of AGOA, the U.S. will be promoting African integration, industrialization and infrastructure development - I'm sure the Americans would not want to lose this opportunity."

The U.S. administration is keen to renew the program, but duration and possible reforms such as adding new duty-free products, refining eligibility criteria and tweaking regional content limits are yet to be thrashed out.

South African Trade Minister Rob Davies said African nations had suggested widening the range of products covered to include more textiles and agricultural products, but he did not see the need for a major overhaul.

"Our message has been, we don't think the African Growth and Opportunity Act is broken and therefore there is no need to fix it," he told reporters.

AGOA, established in 2000, has already been renewed past its original 2008 expiry date and is now set to run until Sept. 30, 2015. Nearly 40 African countries are eligible to take part.

U.S.-bound exports from sub-Saharan Africa - mainly petroleum - under AGOA and other trade preferences totaled $26.8 billion in 2013.

The summit aims to showcase American interests in the region, home to six of the 10 of the world's fastest-growing economies, through public-private partnerships.

General Electric Co, for example, pledged $2 billion in investments by 2018.

The U.S. administration has already called for Congress to renew the program well ahead of its expiry date, albeit with reforms, and U.S. Trade Representative Michael Froman said last week he would work with lawmakers on the length of the renewal.

"Seamless renewal will send an important signal to purchasers of AGOA products and investors in AGOA industries who are already making decisions about next year, and in some cases, many years in the future," Froman said at a meeting with African trade ministers. "The sooner we renew our commitment, the more likely they will do the same."

But the United States is concerned about political will to address other challenges, such as corruption.

"I will say to you, fighting corruption is a definitive and critical part of that process," U.S. Secretary of State John Kerry said. "Fighting corruption lifts more than a country's balance sheets. The market always works better with transparency, with the sunshine of accountability."

- Reuters


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