PORT LOUIS, Mauritius — Trade is one thing, war is another.
This story first appeared in the January 16, 2003 issue of WWD. Subscribe Today.
Since the U.S. granted preferential trade benefits to the region of sub-Saharan Africa through the African Growth & Opportunity Act in 2000, government and industry officials from both continents have found many subjects to agree upon.
Both sides claim that easier access to the U.S. market can bring the economic development that is seen as desperately needed across much of this continent. But there remain some significant differences.
One illustration of that came Wednesday as top trade officials from the U.S. and Mauritius came together at the AGOA Forum, a gathering of more than 900 industry and government notables that runs through Friday. As the talk turned to the prospect of a war between the U.S. and Iraq, U.S. Trade Representative Robert Zoellick and Jayem Cuttaree, Mauritius’ minister of trade and industry, offered strikingly different views of what effect that event would have on Africa’s economy.
“Economic growth requires an environment of security,” said Zoellick. “This is a problem that is a threat to all of us and, as President Bush has made clear, we have to be committed as a major country in the world to combat [terrorism and the threat posed by weapons of mass destruction].”
Cuttaree took a different tack.
“War can’t be good for economics,” he said. “It certainly can’t be good for the economics of poorer nations who are just coming up.”
He noted that the price of cooking gas has risen 50 percent since talk of a possible war with Iraq began. While the island of Mauritius is more affluent than many countries on the continent, it is still a developing nation and its countryside is dotted with shanties that many call home. The sharp rise in costs, Cuttaree said, “has a major impact on family budgets.”
Another object of debate at the meeting is the impending end of AGOA benefits. The trade package, which offers duty- and quota-free entry to the U.S. for garments made in Africa, is set to expire in 2008. More immediately, a provision that allows the continent’s less-developed nations to use fabrics from Asia or elsewhere in the world is due to expire in September 2004.
Varying opinions on whether the third-party fabric provision should be extended have been aired. Some argued that without an extension of that measure, sub-Saharan African apparel manufacturers will not have enough time to make themselves competitive with the rest of the world. Others, including executives from Mauritius and South Africa, which do not get the third-country fabric benefits, argued that the provision has stymied the growth of the local textile industry, which they contend will be critical to Africa developing a large and sustainable garment industry.
Cuttaree said that sub-Saharan African countries and manufacturers should get ready to compete after AGOA expires, rather than hoping for an extension.
“We have been given preferences,” he said. “Now suddenly, we’re told those preferences will disappear. So we have now to operate without protection.
“We have to prepare ourselves for it. We can either decide to stop trying…or we can say, ‘Look, this is something new. We are part of the global world and how do we make sure that we participate?’”