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Trade Africa Feed the Future Regional Conference APRIL 11-12 2016

MAKING BETTER USE OF AGOA. Trade Africa Feed the Future Regional Conference APRIL 11-12 2016. Presentation by: Emmanuella hakizimana Senior export promotion officer, eac. Outline. Past AGOA utilization by the EAC Region The unrealized potential Challenges EAC-AGOA Strategy 2015 – 2025

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Trade Africa Feed the Future Regional Conference APRIL 11-12 2016

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  1. MAKING BETTER USE OF AGOA Trade Africa Feed the Future Regional Conference APRIL 11-12 2016 Presentation by: Emmanuella hakizimana Senior export promotion officer, eac

  2. Outline Past AGOA utilization by the EAC Region The unrealized potential Challenges EAC-AGOA Strategy 2015 – 2025 Going Forward

  3. PAST AGOA UTILIZATION BY THE EAC REGION • AGOA = Africa Growth and Opportunities Act • It is an initiative of US Government which offers duty and quota free access to the US Market for over 7,000 products from SSA • It is non-reciprocal aimed at spurring growth and development • Started in 2000 and renewed several times. • In September 2015, AGOA was re-authorized together with Third Party Provisions to Year 2025 • All the EAC Partner States are AGOA eligible (Burundi has been suspended). • EAC Partner States have exported good that are of low complexity and lack local value addition

  4. Past utilization of AGOA by EAC Region Cont.. •  Total two-way trade between the EAC and U.S. has increased from U.S. $ 514 million in 2000 to U.S. $ 2,775 million in 2014.. • Exports to U.S. from the EAC increased from U.S. $ 186 million to U.S. $ 743 million • imports increased from U.S. $ 328 million to U.S. $ 2,007 million • Balance of Trade has remained in favour of the US • EAC Exports under the AGOA (including the GSP) peaked at U.S. $ 768 million in 2014 • Overall the utilization of the AGOA by the EAC is far below the anticipated levels.

  5. The unrealized potential • Data shows that though all the EAC Partner States have been trading with the US, utilization of the AGOA Program has been very poor. • A study by the Center for International Development, Harvard University has identified a combined potential of US $ 8 billion worth of exports to the US under AGOA • There is a huge unexploited gap

  6. CHALLENGES FACING EAC EXPORTS TO THE US • High transportation costs to the U.S. market • High transaction costs • Stringent Sanitary and Phytosanitary (SPS) measures esp for agricultural products • Low flows of US investments into the region • Existence of tariff and TRQs on some agricultural products in which EAC • Limited availability of affordable trade finance for the SMEs and rural farmers. • Limited information to stakeholders about AGOA • Under-utilization of networking mechanism between US and EAC business community in relation to AGOA opportunities • Continued preference erosion of EAC products into the U.S market by well-established and globally competitive countries • Lack of regional AGOA policy and implementation strategy

  7. EAC-AGOA Strategy 2015 – 2025 Why an EAC-AGOA Strategy? • EAC views AGOA as a special vehicle to reduce poverty and stimulate economic growth • Utilization of AGOA by EAC Partner States over the last fifteen years has been lackluster at best. • There is need to convert the AGOA potential into concrete advantage. • All the Partner States have formulated (or are in the process of formulating) country AGOA strategies • The EAC has completed the process of formulating an AGOA strategy to complement the country strategies • Through this strategy EAC Partner States will take a proactive common approach in engaging the US on the AGOA Program • The strategy will take advantage of the additional provisions contained in the AGOA Act 2015, including focus on regional integration, women and youth

  8. Highlights of the EAC-AGOA Strategy • VISION: “To become a region that is competitive and dynamic exporter to the US market and globally.” • MISSION: “To position EAC as the leading competitive exporter of diversified and value added goods to the USA and globally” • OVERALL GOAL: to maximize utilization of the AGOA Program for the benefit of the EAC economies, businesses and people

  9. The Strategy Highlights Cont… PRIORITY SECTORS •  Agricultural products and foodstuffs, • Leather and leather products, • Textiles and apparel, • Extractive natural resource products, and • Home and fashion accessories PRIORITY AREAS OBJECTIVES • To increase production and export of tradable products – 6 Strategies • To diversify products exported to the USA from the region EAC – 7 Strategies • To intensify value addition - 3-Strategies • To promote and attract investment – 6 Strategies

  10. GOING FORWARD • Approval of the Strategy by EAC organs • Setting up implementation mechanisms • Engagement of stakeholders • Roll out

  11. SALUTATION • Thank you very much, Merci, Asante Sana • Happy to receive questions/comments

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