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Africa Growth & Opportunity Act 3 rd . US-SUB SAHARAN AFRICA TRADE AND ECONOMIC FORUM “HOW TO MONITOR AND TRACK THE IMPACT OF TRADE AT THE COUNTRY LEVEL” Dr. Salomon SAMEN Ssamen@worldbank.org The World Bank PRESENTATION OUTLINE INTRODUCTION: AGOA in the Context of US Trade Policy
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“HOW TO MONITOR AND TRACK THE IMPACT OF TRADE AT THE COUNTRY LEVEL”
Dr. Salomon SAMEN
The World Bank
(a) Theoretical perspective
(b) Empirical evidence
Post-World War II trade policy under various administrations basically has 4 objectives:
=> Secure open markets for US exports
=> Protect domestic producers from unfair trade practices
=> Control trade for foreign policy and national security reasons
=> Foster global trade to promote world economic growth
=> Multilateral track (since 1948 with GATT creation and 8 GATT trade rounds, and WTO Doha round)
=> Bilateral and regional agreements track (FTAs with Israel, Canada, NAFTA, FTAA-2005, US-APEC-2010, Jordan, S. Africa, Chile, Singapore, Central America)
=> Unilateral track (to restrict access-case of Japan in the 1970-80s or to open its vast market-case of AGOA, Andean Trade Pref. Act, CBTPA)
=> Although accounting for 1/8 of world population, SSA account for less than 1% of world trade, and attract less than 1% of global capital flows.
=> In the past 2 decades global trade volume tripled but SSA trade & share of world trade continued to decline.
=> SSA highly isolated – trading neither with the rest of the worldnor with between themselves (Intra-African trade well below average intra-trade for other regions of the world).
=> Many SSA countries continue to depend on export of a few commodities for the vast majority of export earnings – making them more vulnerable than other developing countries with more diversified economies.
=> Capital flight and brain drain of skilled workers are dramatic
Africa isolation has deep implications for world stability, commerce and humanity.
=>On an aggregate basis, in its first two years, and from US Commerce Department data, US imports from SSA increased by nearly 60%.
=>In 2002, while US import declined by 15%, AGOA import increased by 10%. Textiles more than doubled, agric products increased by 38%; Transport equip. from SA by 81%.
=>On a country by country basis – abundance of anecdotes on AGOA impact on:
*employment (Since 2001, 90,000 new jobs in S-Africa; 50,000 in Kenya; 20,000 in Lesotho)
*Growth of export of duty free imports from SSA to the US (In a single year –2001 versus 2000, +7,510% in Uganda, 3,150 % in Congo, 1,840% in Madagascar, 1,375% in Kenya, 1,333 % in Cameroon).
SSA factors of prod (Labor, Capital, Land, etc..)
[Estimated elasticities doubled from 2001 to 02]
Highest growth in apparels in a single year (*2.4 from 2001 to 2002)
*Increase in productivity
1. Extend benefits beyond 2008;
2. Improve rules of origin; and
3. Allow all products from Africa to enter the US duty and quota free