A United States public policy expert says U.S.-Zimbabwe business relations can be redefined in the context of the extended Africa Growth and Opportunity Act (AGOA) but local business should speak with a voice that can help government think through the tough challenges of economic development to attract U.S. business investment into the country.
“Zimbabwe hasn’t been at the forefront of the U.S.-African relationship…it shouldn’t be like that…the cost of not being part of AGOA is high,” said Dr. Witney Schneidman, a fellow with the highly influential American think-tank, the Brookings Institution, working on the African Growth Initiative , and also serving as International Advisor with Covington & Burling LLP. “Under the new language passed by Congress in June, the President has the right to limit access to the program. In the past, if certain conditions were not being met you are out of the program,” said Schneidman during a roundtable discussion session with journalists on Tuesday.
AGOA was enacted in May 2000 and has been the cornerstone of U.S. economic engagement with the countries of sub-Saharan Africa. On June 25, 2015, the U.S. Congress approved legislation to re-authorize AGOA for an additional ten years. By providing duty-free access to the U.S. market, AGOA has succeeded in helping eligible nations grow, diversify their exports to the United States, and create employment and inclusive economic growth. Under AGOA, eligible countries can export products to the United States duty-free, including value-added, manufactured items such as textiles.
Schneidman said the new language in AGOA is in response to a number of conditions. Citing the example of Madagascar where there was a coup d’état in 2009, Schneidman said the people who suffered when AGOA was suspended for that country were the 2,000 small business women working in the country’s textiles sector who were not in power. In 2003, the White House issued an executive order establishing travel and financial restrictions on a small number of people that undermined democratic process, rule of law and respect for human rights.
“We have to be more careful once we extend AGOA and when we deny the privileges, we have to make sure the people who make the products that qualify for AGOA aren’t hurt because of actions of people who have nothing to do with those products,” he said.
“Personally, I think Zimbabwe should be part of AGOA, but it is not,” he added. ““I will go to Congress and urge them to look more carefully; now that we have language that is more flexible, maybe it is possible to make exceptions for power manufacturers, agriculture producers or horticulture companies to be allowed to participate in AGOA as part of creative ways to revitalize the commercial relationship while addressing those deeper issues that relate to governance.”
He noted that some Zimbabwean firms could unknowingly be part of the AGOA supply chain. “Some Zimbabwean companies are part of the supply chains that are passing products to companies in the region that export under AGOA. But there is no commercial value to Zimbabwe,” he said.
According to the U.S. State Department, total African exports under AGOA more than quadrupled since the program’s inception. As of June 2015, AGOA eligible countries have exported nearly $480 billion worth of goods to the United States under AGOA and the U.S. Generalized System of Preferences.
Schneidman, who was Deputy Assistant Secretary of State for African Affairs during President Bill Clinton’s administration between 1997 and 2001, said his country’s government will be supportive of economic relations that stimulate the southern African country’s economic growth.
“I have always seen Zimbabwe as a country of great potential. We should look for new ways to communicate and understand each other,” he said, citing the country’s educated population, natural resources and great infrastructure. “What has been important is understanding Zimbabwe’s competitiveness and encouraging business to speak with a voice that can help government think through the tough challenges of economic development to attract other business into the country. Nobody is a better reference for investing in Zimbabwe than people who are doing business here,” he said.
Schneidman’s visit to Zimbabwe is supported by the U.S. State Department Bureau of International Information Programs, which enables U.S. experts to engage with foreign audiences world-wide. During his visit to Zimbabwe, Schneidman met with various groups in Zimbabwe including business, youth leaders and Embassy officials. – ZimPAS © October 15, 2015