Washington is infamous for its ability to generate gridlock.
Most of the time, this term refers to the kind we hear about on Sunday talk shows, with partisan and electoral pressures preventing much of anything from happening in Congress or the Executive Branch.
Washington is experiencing gridlock the old fashioned way this week, as traffic in the Nation’s capital is brought to a near standstill while Heads of State from nearly every African nation take part in the Historic African Leaders Summit. Extensive road closures, combined with dozens of motorcades, will keep parts of Washington paralyzed for a good part of the week.
This paralysis — both real and political — is a fitting backdrop for the Summit since African presidents and prime ministers will spend part of their time pushing for expeditious renewal of the African Growth and Opportunity Act (AGOA) during their conversations with U.S. government and corporate leaders.
AGOA, which provides duty free access for apparel, footwear, and many other products, expires in a little less than 13 months. Unfortunately, AGOA’s future remains uncertain as it is ultimately subject to the same forces that have prevented other popular trade programs, including the Generalized System of Preferences (GSP), from being renewed in a timely manner.
Some optimists claim this won’t be AGOA’s fate. After all, AGOA remains widely popular in Washington, enjoying broad support from stakeholders all over the spectrum. But, just two years ago, a key AGOA provision that anchors about 95 percent of the apparel trade, was almost allowed to die because of disputes over unrelated trade policy measures. Fortunately, it was renewed at the last moment, but not without significant damage to the apparel industry in several African countries. And today, the popular GSP program, which is the underpinning of AGOA, remains expired.
To be fair, President Obama has promised AGOA’s seamless renewal — a fitting pun for the textile and apparel industry, which demands long-term predictability in order to function properly. He has also called for improvements to expand capacity, improve infrastructure, and otherwise make AGOA function more effectively. All are worthy ideas and should be considered, and probably implemented, but not if they stall the underlying program.
Rather, to keep the trade traffic moving, the President and Congress may want to consider a multi-pronged approach to AGOA. Just as untangling a nasty traffic jam means extricating one car at a time, the path for a sustainable U.S./Africa economic partnership should be taken in stages. We should first put the base AGOA program on solid footing. Then, without the threat of expiration looming over our heads, we can build in those enhancements that amplify AGOA’s effectiveness.
Looking at the base program, there are four simple steps that will go a long way to building sustainable trade and investment with the continent.
First, to eliminate uncertainty, let’s renew AGOA now. Companies are already planning business that will come due after AGOA’s expiration date. This is already dampening future business.
Second, let’s renew the program for a long term. African leaders and both U.S. and African apparel, fashion, and retail associations have called for at least a 15-year renewal.
Third, let’s make sure we use state of the art rules of origin for the duration of the renewal. Past renewals were hobbled when policy makers fiddled with the coverage or duration of the rules.
Fourth, let’s renew AGOA for all Sub-Saharan African countries, and make sure the rules apply equally to all of them. Regional integration, a key trade goal for Africa, is greatly undermined if different countries have different rules.
Many feel the time for Africa is now. Fresh optimism, greater intercontinental partnerships, and a stronger economic outlook mean Africa is no longer in the rearview mirror of the world trading community. The convergence of African leaders in Washington — the first time this has ever happened — is perhaps the best symbol of this new perspective.
But long-term growth in Africa will need more than symbols if it is to be sustainable. Decisive action by the United States — through swift and simple renewal of AGOA — can help ensure the road ahead for African development and its new partnership with the world remains clear.
Stephen Lamar is Executive Vice President at the American Apparel & Footwear Association (AAFA), where he is responsible for the design and execution of advocacy and compliance strategies on a series of legislative and regulatory issues, including international trade, sustainability, and product safety.