TRALAC - Trade Law Centre

Botswana Optimistic About AGOA Extension

Tuesday, 10 February 2004

Source: The Nation (Nairobi)

Comesa members are lobbying for a two-year extension of the first phase of the African Growth Opportunity Act.

Kenya Heads of State from the Common Market for Eastern and Southern Africa will meet in Kampala in May to strengthen their campaign for the extension, Trade and Industry minister Mukhisa Kituyi said yesterday.

He said Kenya supported the initiative proposed by the US Congress.

The three-year-old Agoa agreement gives African countries until September to stop using materials from third party countries and start utilising locally produced cotton for the manufacture of textiles and garments destined for the American market.

Exports to United States under Agoa increased more than three-fold between 2001 and the end of 2003.

Agoa preferential trading terms are divided into phases that overlap. Agoa I expires in September to be followed by Agoa II scheduled to run until 2008.

A key requirement for Agoa II is that the beneficiaries source raw materials locally.

The US Congress wants the period extended by two years, but this has been contested by the World Trade Organisation.

Dr Kituyi said the extension of the Agoa initiative was necessary because most African countries did not have sufficient supplies of cotton.

Kenyan investors and employees in the cotton sector fear that if the extension is rejected, there would be low business and loss of jobs.

Agoa has rejuvenated the ailing local cotton industry and created more than 30,000 jobs.

The minister spoke when he met a business delegation from Iran.

Mr Ali Naghi Khamoushi, the head of Iran's Chamber of Commerce, Industries and Mines, led the delegation.

Dr Kituyi also said he was hosting his colleagues from Uganda and Tanzania for two days beginning yesterday to discuss reduction of the gap in tariffs.

Earlier, the Iranians signed an agreement with the Kenya Chamber of Commerce and Industry to exchange trade information. The Kenyan side was represented by the chamber chairman David Githere.

Last year, Karachuonyo MP Adhu Awiti initiated a motion in Parliament to compel the Government to put in place measures to revive the cotton industry.

He said a representative of the US trade and his European counterpart would meet regional trade officials to prepare for the Doha follow-up which is likely to pick in August.