By Weismann, Robert
Multinational Monitor , Vol. 17, No. 7-8
Recognizing that interest in Africa is at a low ebb and that support for foreign aid is collapsing in the U.S. Congress, some of Africa's friends in the Congress have devised a new plan for "Growth and Opportunity in Africa."
Although the proposal comes from a bipartisan group in Congress that includes liberals such as Representative Jim McDermott, D-Washington, who are probably genuinely concerned about improving the lives of Africans, it reads as if it came from an African desk at the U.S. Chamber of Congress, or maybe from the World Bank.
"We propose a radical shift in emphasis from sustainable development strategies to a private sector and market incentives approach to stimulating economic growth and reducing poverty in those countries in sub-Saharan Africa who are committed to economic reform," reads a draft policy statement from the African Trade and Investment Caucus.
Central to the Caucus' plan is the creation of a U.S.-Africa Free Trade Area by 2020. The plan also calls for eliminating most quotas on African-made textiles and apparel immediately, before the international phase-out of the global textile quota system (the Multi-Fiber Agreement) in 2005; diverting $300 million annually from aid programs to a U.S.-Africa Trade and Investment Partnership which would support privately managed equity funds for Africa; and expanding the U.S. Export-Import Bank's coverage in Africa, a move designed to increase U.S. investment in Africa.
The various elements of the Caucus plan would do far more to promote U.S. business interests than it would to facilitate economic development in Africa. The explicit goal of the Investment Partnership and expansion of the Ex-Im Bank's role in Africa is to promote U.S. private investment and joint ventures in Africa with various sorts of investment guarantees and subsidies.
But by far the worst element of the Caucus plan is the creation of a U.S.-African free trade area. Linking the world's richest and poorest nations in a free trade area is an idea so outlandish that even the U.S. Trade Representative suggests it is premature.
To the extent that African nations possess a market with enough purchasing power to interest U.S. companies, U.S. imports would completely overwhelm African manufacturers and service providers. Already, goods produced in newly liberated South Africa are flooding into African shops, displacing locally made products; that problem would be exacerbated by several orders of magnitude were a U.S.-Africa free trade agreement put into place.
Compounding the disastrous consequences of a free trade agreement, the Caucus draft policy statement proposes that only African countries having "established or making continual progress towards establishing a market-based economy" would be eligible for participation in the new U.S.-Africa economic institutions and agreements. …