United States vows to promote Ethiopia as a champion of political liberalization in the region, so disclosed by Ambassador Tibor P. Nagy, Assistant Secretary, Bureau of African Affairs.
In a telephone briefing to journalists drawn from numbers of countries, Ambassador Nagy said that we applaud and support the initiatives that Prime Minister Abiy wants to bring to Ethiopia, both on the domestic policy side, on the economic side, and also external policies, peacemaking in the region, really promoting Ethiopia as a champion for political liberalization in the region. So we are eager to support his reforms any way possible.
He further said that one of his biggest challenges, of course, is the conversion of Ethiopia from a socialist, state enterprise-led model to a free-trade, private investment type of model, because we all believe that the fastest way to create employment, which, as you said, Ethiopia desperately needs for its millions of young people, is through the private sector.
Adding he said that so we are working closely with the Ethiopian government to support its policy changes, which will attract more of the types of investment in businesses that will create this just unbelievable number of jobs that Ethiopia needs. “We are partners together; we will do our best to be as supportive as possible, because we understand that there’s a desperate need for jobs yesterday, not tomorrow. “
Assistant U.S. Trade Representative for Africa, Constance Hamilton On her part said that Ethiopia’s already a very attractive destination for private sector investment, and I do know in the apparel sector there is some very interesting projects going on. Ethiopia’s also working diligently on its WTO accession, which we are helping to support. I think that once they complete that and do some of the other things job creation, economic development will certainly come to the country.
Regarding US-Africa relationship and challenges, the Ambassador pointed out that we want to promote trade and investment with Africa and have it rise dramatically. Of course, we all know that it is very difficult to attract trade and investment to areas of Africa that are unstable, suffering from security problems.
That is why our policies towards Africa, in addition to promoting trade and investment, of course we’re partnering with African countries to do our best to promote stability and security in those areas, like the Sahel, or unfortunately like in Nigeria with Boko Haram and ISIS West Africa, and Somalia and a number of others, that are suffering from insecurity, because the investment will have to follow once security is reestablished.
About AGOA forum, he noted that it is one of the key components of U.S.-Africa strategy. Our whole focus, and our primary focus, for the administration, is primarily significantly increasing our trade and investment with the continent as a mechanism for growing Africa’s prosperity and for providing jobs for what we have termed “Africa’s emerging youth tsunami,” because, as we have said before, all those millions of young people, what they really want and what they really need are jobs.
Ambassador adding noted that we can really leap towards Africa’s prosperity. One of those, which were recently announced at the Corporate Council for Africa Summit in Maputo is Prosper Africa, which will be a major initiative.
Then another one, which was announced earlier, is the Build Act, which will lead to the creation of the International Development Finance Corporation and double OPIC’s available capital for investment in Africa and other developing countries to $60 billion, and then a new policy announced for the Millennium Challenge Corporation, which will allow MCC to do regional compacts instead of bilateral compacts.
Hamilton stated that for almost two decades, AGOA has been the cornerstone of the United States’ economic engagement with sub-Saharan Africa, and during that time we have invested heavily to help African countries better utilize AGOA, including creation of the trade hubs as resources for African businesses and entrepreneurs, and allocating more than $7 billion for trade capacity building initiatives.
Adding she said that while AGOA has brought important benefits, we recognize that the benefits are uneven, and there remains more that can be done to realize the full potential of U.S.-African trade. Our experience over these past 19 years shows not only the benefits of trade preferences like AGOA, but the limitations.
She further said that as successful as AGOA has been, its benefits have not been broadly shared by all the countries that are part of the program. Last year, the top five AGOA beneficiaries accounted for more than 75 percent of AGOA exports. In the strategic textiles and apparel sector, the top five countries accounted for 95 percent of AGOA apparel exports.
She noted that Additionally, AGOA has not led to the trade diversification for which we originally hoped. Petroleum products continued to account for the largest portion of AGOA imports, with a 67 percent share. And the volume of AGOA trade remains modest. In the AGOA clothing sector, for example, we get about $1 billion per year from Africa, but that is just roughly 1 percent of the United States’ $95 billion imports in global clothing imports.
To maximize AGOA, countries must take an active role in creating the competitive conditions in which companies, entrepreneurs, and farmers can thrive. The AGOA’s eligibility criteria were designed to help improve these conditions, she added.
As to her, we encourage our AGOA partners that have not yet completed an AGOA utilization strategy to work with their U.S. regional hub to do so. Only by easing the ability of the private sector to start and grow their businesses can African countries hope to provide the jobs for Africa’s youth and maximize the potential of the youth bulge.
According to her, governments can also consider taking steps to address important constraints to doing business, particularly for smaller businesses, such as providing technical support to help businesses improve competitiveness and helping more farmers and women micro-entrepreneurs participate in AGOA trade.
She remarked that we introduced new FTA Model Initiative. AGOA is scheduled to expire in six years, in 2025. It would be irresponsible of us not to plan for what comes next. Our vision is to begin by establishing an agreement with an African partner that can serve as a model for other future agreements on the continent.
“Our ultimate objective is to have a network of agreements in place that could serve as building blocks to an eventual continental trade partnership with the United States-a true Africa-U.S. trade partnership for the 21st century. We believe that future U.S. trade agreements on the continent can be crafted to complement and contribute to Africa’s regional integration objectives under the AfCFTA. Africa is a top priority for the U.S. government. We see tremendous opportunities in this relationship. We want to work with our partners to unlock those gains.” She said.
The Ethiopian Herald Sunday Edition 28 July 2019
BY MEHARI BEYENE
