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March 16, 2008

AGOA benefits to Ghana called into question

Doubts over the benefits of the African Growth and Opportunity Act (AGOA) to Ghana resurfaced at a media roundtable in Accra as part of the United States' trade and investment mission, which ended its three-day visit yesterday.

"There is a perception out there that the AGOA, through its strict and high standards and requirements, is intended to prevent commodities from Africa reaching the US, what do you say to this? " a curious journalist asked Ms Constance Jackson, Associate Administrator of the United States Department of Agriculture (USDA) and leader of the mission.

Ms. Jackson rebutted the claim, saying that the standards are "reachable and attainable and that AGOA standards are not for only African countries, they also apply to US businesses." She added that AGOA and other dispensations are meant to ensure open trading system mutually beneficial to both the US and her trading partners.

It would be recalled that, President John Agyekum Kufour at the Sixth US-Sub-Saharan African Trade and Economic Co-operation Forum in Accra last year, appealed to the US government to consider extending the AGOA initiative, which expires in 2015, for another 20 years. This, according to President Kufuor will enable eligible countries which have not taken full advantage of the initiative to explore the opportunities available on the US market.

The AGOA was signed into law on May 18, 2000 and offers tangible incentives for African countries to open their economies and to build free markets.

It marked a fundamental shift in U.S. policy toward Africa - for the first time, the United States emphasized increased trade as a means of promoting economic development, as much as the traditional forms of development assistance. AGOA sought to increase trade by allowing qualifying sub-Saharan African countries to export most products to the United States duty-free.

In order to qualify for AGOA benefits, countries must make progress toward improving the rule of law, human rights, and respect for core labour standards including addressing child labour issues. Thirty-seven countries including Ghana now qualify for AGOA benefits.

Ms. Jackson led 18 US companies to interact with over 100 African agribusiness representatives from Benin, Burkina Faso, Cameroon, Liberia Mali, Nigeria, Senegal, Sierra Leone and Ghana, the host country, to build business relationships. The American companies are into equipment distribution, processing of agricultural commodities, trading in agricultural commodities, production of wine and spirits, and environmental protection, including water management.

The purpose of the mission, according to USDA Associate Administrator, "was to explore a two-way trade and investment opportunities between US and West and Central African agribusiness." She discloses that the mission to Ghana built on the success story of a similar mission to Kenya in 2007.

"The United States strongly believes that the key to Africa's economic growth and development is an open trading system in which all governments operate transparently and govern by the rule of law. When these conditions exist, markets are free to operate, increasing trade, creating jobs and expanding opportunities for African to build better lives," said Ms. Jackson.

She says besides open markets, countries need to have transparent, science-based policies and regulatory frameworks for agricultural trade consistent with international standards.

Ms. Jackson further discloses that the US is working closely with the World Cocoa Foundation to ensure that cocoa is "grown responsibly" and with safe farm practices.

She says reckoning the importance of cocoa and cocoa products to the economies of West and Central Africa, the USDA last October awarded funding to the World Cocoa Foundation under the Norman E. Borlaug International Science and Technology Fellows to provide six weeks of training in the United States for seven scientists from African countries. She added that the training enhances the work of the World Cocoa Foundation's Cocoa Improvement Programme in Ghana and other countries in West Africa.

Asked why world food prices are soaring globally, Ms. Jackson blamed the development on drought in many countries with its consequent shortfall in the supply chain; increased in demand for foodstuffs as protein consumption continue to rise; and the new craze of converting foodstuffs into bio-fuel.

Mr. Ernest Debrah, Minister for Food and Agriculture, shares the concerns of Ms. Jackson saying that the world trade has elements of health and therefore the need to ensure safety standards. "The safety standards are for all of us, not only the US. But because the rules are relaxed here, we think it is a headache meeting them."

According to him, the Ministry is working closely with some core farmers to introduce them to new technologies in order to improve their output.

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