African countries are lobbying against the planned Trans-Pacific Partnership Agreement (TPP) between the United States and 12 Asian countries for fear of losing preferential access under the African Growth and Opportunity Act (Agoa).
African Trade ministers were at this year’s Agoa forum in Washington to urge the US to reconsider the move, arguing that the proposed pact will make the continent’s goods uncompetitive in the US market.
Kenya’s Trade Principal Secretary Chris Kiptoo told the Business Daily that the preferences that Kenya enjoys will be eroded once the US enters into trade agreements with other states outside Africa.
“Other trade agreements such as the Transpacific Partnership Agreement that the US is planning will affect the goods that are currently enjoying preferential rates [in] America,” said Dr Kiptoo.
The TPP eliminates or reduces tariffs on goods traded between partner countries. The agreement would abolish many of these tariffs.
Dr Kiptoo notes that it would be difficult for Kenya to compete with Asian countries such as Vietnam and others that are part of the TPP agreement.
“Vietnam is a big producer of textiles and this will make it difficult for us to compete with them once they get duty- and quota-free access to the US market,” he said.
Manufacturers in those countries produce apparel at lower costs than their Kenyan counterparts.
The African trade ministers are also opposed the plan by the US to have American goods sold in Africa under the same terms as Agoa, noting that it will affect the growth of the economies in the continent.
Speaking on behalf of the African trade ministers in Washington, Joshua Setipa, Lesotho minister of trade noted that was too early for the US to seek reciprocation on Agoa.
“Africa still needs more time before it is exposed to competition by the goods from America. Any agreement with the US must reflect the realities in Africa’s economy,” said the minister.
US trade negotiators want African countries to give the similar preferential treatment to American exports following the 10-year extension of the tariffs in 2015.