Both Oars In A Second Look at AGOA

Jul 10, 2012

I had three distinct reactions to Nicholas Kristof’s June 30th op-ed titled “Africa on the Rise.”

First, I was put off by his generalizations. Does he really think that Americans, especially those who read The New York Times thoroughly enough to get to his column, still regard Africa simply as “a quagmire of famine and genocide, a destination only for a sybaritic safari or a masochistic aid mission”?

Does he really believe that US businesses are “only beginning to wake up to the economic potential” of Africa? These assertions seem woefully outdated, even insulting.

Frankly, the growth of sub-Saharan countries is not news to anyone who reads the news. What might merit more exposure is the fact that the most significant partner in these developing nations is The People’s Republic of China (PRC)—not the United States. The PRC’s practice of keeping business and political policy separate has allowed the natural-resource-gobbling, agriculture-land-seeking giant to waltz right into oil and mineral rich countries like Nigeria and Angola. Unfortunately, the PRC’s business-first approach is good for prospecting, but does little to improve local business practices or the behavior of the State. The PRC is a focused extractor.

This brings up my second problem with the column. Given the PRC’s reputation for unfettered exploitation, I was perplexed by Kristof’s glad-handing of the increasing influence of the PRC in Africa. He glibly notes, “Everywhere you turn in Africa these days there are Chinese businesspeople seeking to invest in raw materials and agriculture.” It seems a bit naïve for a man of his experience to suggest that US businesses are missing the party without recognizing that the PRC is loading the dance cards of these countries to block the potential for western investment.

The growing presence of the PRC in sub-Saharan Africa also makes the re-upping of the African Growth Opportunity Act a far more complex question than Kristof allows—which is my third and biggest concern with his column. His superficial treatment of the renewal of AGOA—which allows participating countries to avoid quotas and tariffs on textiles shipped to the US—is very disappointing. One would expect a columnist of his prominence to delve a bit into the possible connection between the PRC’s interest in sub-Saharan Africa and the advantages granted by AGOA. How many of the new textile and sewing factories in sub-Saharan countries covered by AGOA are Chinese owned? 

In 2004, I testified for a similar trade benefit to be granted to Haiti. Initially called the HERO Act, it later passed as the HOPE Act. My hope was that US clothing manufacturers would come to Haiti and create more jobs and, eventually, improve wages through competition for labor. Some of this has happened. However, since making my testimony, I have seen the streets of Haiti taken over by cheap Chinese motorcycles. I have also seen a lot more Chinese imports in the stores and an increase in overt political activity in Haiti by China. I am concerned that this is not a coincidence. 

Haiti has historically recognized Taiwan as China at the UN, making it a constant target of interest for years. But, I have to wonder if the PRC, the designated provider of cheap goods to the world, increased its interest in Haiti due to the favorable trade recognition Haiti was granted by the passing of the HOPE Act. Is China investing in countries that provide a back door to US markets—markets already saturated with environmentally and humanitarianly problematic Chinese goods?

The coincidence of the PRC’s arrival on the dawn of Haiti’s HOPE at least suggests the need for a second look at AGOA. Until the facts are known on whether the AGOA trade advantages have helped the PRC increase its hold on the African continent, I cannot support its extension—no matter how many jobs it is credited with creating by the very cursory Mr. Kristof. Jobs are vital, but they are not everything.