Bush vision: a trade-driven Africa

In South Africa, the president will push for the first US-African free-trade agreement.

By , Special to The Christian Science Monitor

That half of President Bush's five-day African trip will be spent in South Africa and Botswana - the continent's biggest and fastest-growing economies, respectively - speaks volumes of his vision for Africa.

It is here that Mr. Bush will push trade and development, not handouts, as Africa's quickest path out of poverty. It is here that he will call for the first free-trade agreement between Africa and the US. And it is here that he will find African leaders who share his vision.

To be sure, the trip is also about US interests. Open trade with Africa means greater access to its oil reserves, which experts say will become increasingly important as the US looks for energy sources outside the Middle East. And a more stable and prosperous Africa is seen as reducing potential breeding grounds for terrorists.

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But for a continent that has largely stood on the sidelines as the world globalized, Bush's commitment to opening trade - coupled with $100 million in antiterrorism money for East Africa and $15 billion to fight AIDS continentwide - marks a pivotal moment for US-African economic relations.

"In a time of growing commerce around the globe, we will ensure that the nations of Africa are full partners in the trade and prosperity of the world," Bush said in Senegal Tuesday.

The president gave a stirring speech on the Senegalese island of Goree, a 19th-century processing center for slaves heading to the US, calling slavery "one of the greatest crimes of history." Bush also met with several West African leaders to discuss possible US military involvement in war-torn Liberia. "We're now in the process of determining the extent of our participation," he told reporters.

Late Tuesday he flew into South Africa to begin trade discussions. With 13 percent of the world's population but less than 2 percent of global trade, Africa represents both a huge potential market and a major failure of globalization. Fifty nations, half of them in Africa, are worse off now than they were 10 years ago, according to a new United Nations report.

Because of instability and corruption, foreign investors have often been reluctant to pour new money into Africa. As Secretary of State Colin Powell said last month in a speech about the continent's economic potential, "Capital is a coward" that flees insecurity and poor governance.

In an effort to make Africa more attractive to investment, three leaders on Bush's itinerary - Thabo Mbeki of South Africa, Abdoulaye Wade of Senegal, and Olusegun Obasanjo of Nigeria - crafted the New Partnership for African Development (NEPAD) in 2001, a plan that seeks to woo more investment in return for greater African responsibility for peace, security, and good governance. Bush and other Western leaders have pledged their support to the plan, although emphasis on the program has fallen since Sept. 11.

Bush is expected to advocate the success of programs like the 2000 African Growth and Opportunity Act (AGOA), which allows duty-free access to the US for selected products from 38 African countries.

He will also likely urge African countries to open their own markets, both to the US and other African countries. On the agenda here in South Africa will be a proposed free-trade agreement with the five countries that comprise the Southern African Customs Union (SACU) - South Africa, Lesotho, Swaziland, Botswana, and Namibia. The agreement would make permanent the benefits of AGOA, which expires in 2008.

The US says that African exports to the US grew 10 percent last year, to $9 billion, under AGOA. Exports from South Africa, by far America's largest trading partner on the continent, totaled $923 million in 2001 and rose in 2002.

But AGOA has not been as successful as many have hoped. According to Oxfam Great Britain, a nongovernmental organization, while 28 eligible countries have exported goods under the program, only six, including South Africa, have increased trade with the US.

"It's not going to be the miracle that leads to tremendous growth in Africa," says Irungu Houghton, the organization's Pan Africa policy adviser based in Nairobi, Kenya. "AGOA has been fairly negligible in terms of increasing trade between the US and Africa."

The negative effects of US subsidies on commodities like cotton, says Mr. Houghton, far outweigh the benefit of any free-trade agreement. Oxfam says the US spends $4 billion a year subsidizing its cotton production, which depresses the price of the commodity worldwide, hurting African farmers who would otherwise be able to produce and sell it much more cheaply than US farmers. West African countries have already taken the issue before World Trade Organization, alleging that the subsidies constitute unfair trade barriers.

Nor is America's interest in growing African economies entirely selfless. Although AGOA does not require African countries to drop their trade barriers to US products, the free-trade agreement with SACU would require a lowering barriers on both sides.

"South Africa is a market with huge potential," says Gus Selassie, senior African analyst for the World Markets Research Center in Boston. "You have 40-odd million people with spending power equivalent to some Eastern European countries."

Southern Africa, particularly South Africa, is already an important US trade partner. According to the Trade Law Center of South Africa, even without a free-trade agreement, US exports to the five SACU countries are 50 percent more than trade to all the former Soviet nations combined, including Russia. Additionally, Africa is expected to supply one-quarter of all US oil by 2015, according to Mr. Selassie.

Southern African unions are worried about the effect an agreement might have on employment and argue that as long as the US protects its own markets with subsidies, African countries must retain the right to protect their industries with import tariffs.

"We are concerned that trade agreements tend to favor the more advanced capitalist countries, particularly America," says Patrick Craven, a spokesman for the Congress of South African Trade Unions. "America and the European Union talk about free trade, but they don't actually practice it."

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