Study project (MBA)--University of Stellenbosch, 2002. / ENGLISH ABSTRACT: The African Growth and Opportunity Act was signed into law in May 2000 to
allow qualifying SSA countries to export eligible products duty free to the US.
The act is a non-reciprocal "agreement" designed solely by the US, with the
objective of promoting increased trade and investment between the US and
SSA. The US insist that trade will lead to development on the African
continent if SSA countries liberalise their markets and become integrated into
the global economy. The theory behind trade liberalisation is that it promotes
allocative efficiency by exploiting comparative advantage. I however argue
that trade liberalisation can realise its potential only if the US start dismantling
the protectionist barriers that have been described in this report. The AGOA
does reduce tariff barriers for a number of African products. However new
non-tariff barriers have been erected which are less transparent, but just as
effective as tariff barriers.
The report documents the significance of existing trade barriers that seek to
protect the US industries from harm, and evaluates the problems that are
created in spite of the intentions of the AGOA. A number of specific issues
that will be significant for the future outcomes of the Act were also dealt with.
These included: the anti-dumping steel duties, US Farm Bill, NEPAD and the
textiles and apparel debate. The problems found with the AGOA included:
• Protectionism that is sector specific, involving the cases of the antidumping
steel duties and the Farm Bill.
• The unfavourable terms of trade associated with the Act, caused by the
non-negotiable, non-reciprocal and temporary nature of the AGOA.
• The eligibility conditions of the Act, which serve to bind African countries to
the rules of the World Trade Organisation and exclude some countries on
the African continent from obtaining benefits.
• Internal reform problems within the SSA countries involving government
departments, infrastructure and the macroeconomic environment. The evidence over the short time since it was enacted reveals that the SSA
countries will not gain much from the extended trade benefits of the AGOA,
unless their capacity to produce and supply the US market is enhanced.
Furthermore, most of the AGOA benefits have gone to oil exporting countries
and SA, who is the only non-oil country benefiting from a number of sectors at
present. The Act has failed to increase trade flows from eligible countries to
the US, as most of the SSA countries are not at the economic development to
take advantage of the preferences that have been provided under the AGOA.
Furthermore the liberalisation of many of the African economies has not been
reciprocated by the US. The actions of many interest groups in the US
indicate that they are "yes" to free trade but "not" at the expense of jobs and
profits. This is evident, as the AGOA provides no exceptions to any of the US
retaliatory measures and the fact that interest groups in the US influence
many of the product decisions when domestic market share is threatened.
One of the positive outcomes of the AGOA is the joint US Africa Trade and
Economic Co-operation Forum that will provide future avenues for beneficial
US-Africa trade relations. / AFRIKAANSE OPSOMMING: geen opsomming
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/53085 |
| Date | January 2002 |
| Creators | Toich, Peter |
| Contributors | Breytenbach, Willie, Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 108 p. |
| Rights | Stellenbosch University |
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