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From: wolda002@umn.edu
Date: Fri Feb 18 2011 - 23:30:02 EST
pleas read also, Trading with the Enemy By Jason Hickel, February 16,
2011 at the of the page September 24, 2009
AGOA – Subsidizing Multinational Corporations, Undermining
Development<http://crossedcrocodiles.wordpress.com/2009/09/24/agoa-subsidizing-multinational-corporations-undermining-development/>
http://crossedcrocodiles.wordpress.com/2009/09/24/agoa-subsidizing-multinational-corporations-undermining-development/
Posted by xcroc under development <http://en.wordpress.com/tag/development/>,
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recolonize<http://en.wordpress.com/tag/recolonize/>
[3] Comments<http://crossedcrocodiles.wordpress.com/2009/09/24/agoa-subsidizing-multinational-corporations-undermining-development/#comments>
Ruaraka Export Processing Zone, EPZ, near Nairobi. This is the fifth or
sixth hour of production. The 900 indicates the total number of jeans
produced at that time. But the daily target is indicated on the green
papers, which is between 1200 and 1500. If the EPZ workers do not meet this
target by 5pm, they will have to stay until they finish. They will not be
paid overtime because they were supposed to reach the target in 8 hours.
(picture from Pamoja Tunaweza slideshow, link below)
In Jendayi E. Frazer’s 4-Point Plan to Plunder and Pillage
Africa<http://www.americanchronicle.com/articles/view/117107>Sophia
Tesfamariam writes a devasting indictment of the AGOA program, the
African Growth and Opportunity Act. Tesfamariam has also collected and
included some of the most searing criticisms made by a variety of people
familiar with the program. She shreds all of Frazer’s points, but AGOA gets
the most extensive treatment.
Almost 10 years since the introduction of AGOA by the Clinton
Administration, oil imports to the US from Nigeria, Angola and Gabon still
make up over 94% of Africa´s export to the US under AGOA. *So who benefited?
* As we shall see later, *the much touted “success” in the textile sectors
were a gross exaggeration and in some cases actually reversed development of
these sectors and destroyed nascent industries*. Many African economists and
analysts had reservations about AGOA and I, as a longtime Africa observer,
had strong reservations about it and said so. I was actually happy when
Eritrea was unceremoniously removed from the list…it turned out to be a
blessing in disguise.
I was not alone in my suspicions of AGOA; here are some of the voices that
were just as skeptical and critical of AGOA from the very beginning, voices
that were ignored and gagged by the likes of Frazer:
“…African countries are pressured to adopt WTO-like, and even WTO-plus,
provisions relating to intellectual property rights protection, investment
and financial liberalisation, and labour – all in exchange for some illusory
benefits. *The AGOA is a US law enacted by the US for the purpose of
securing opportunities for US businesses, to the detriment of African
economies*. It offers no benefits for African economies. The AGOA is a
Trojan horse used to trap African governments into giving up their
legitimate rights under the WTO…”-(Dakar Manifesto 2001)
“… we reject on principle the “conditionality” approach, which tramples on
the sovereignty of African nations and the democratic rights of its people
to shape national policy…”-(Letter signed by 35 Africa based NGOs)
“…This is a matter over which we have serious reservations… To us this is
not acceptable…”- (Former South African President Nelson Mandela )
AGOA is the “Africa Recolonization Act”-(Congressman Jesse L. Jackson, Jr.)
“…*the only groups targeted for assistance are the multinationals who
largely control Africa’s trade and access to rich markets*…”-(The
Association of Concerned African Scholars)
“…To argue that AGOA will be the means by which we can penetrate the US
market is a delusion. The main effect of AGOA is to link aid to economic
reform, [such as] the dismantling of a states regulatory environment. There
are no benefits, and the costs include clear manifestations of deepening
structural adjustment and deregulation. *AGOA is simply another way of
undermining Africa´s ability to mobilize domestic resources for
development*…”-(Charles
Abugre, director of the Integrated Social Development Center in Ghana)
There are several conditions that have to be met to become eligible for
AGOA, including one that says that the country has to have a “market-based
economy” and has to “eliminate all barriers to US trade and investment”.
There is also a provision of AGOA that is not listed amongst the formal
conditions for eligibility and is not often mentioned by Frazer and her
cohorts. It is the one that says that *unlimited duty-free exports of
textiles and apparels are allowed only if they are produced with American
raw materials*. In addition, the President has the authority to suspend duty
free apparel if they “cause serious damage, or threat thereof” to the
domestic US industry. *So Africa, with its unlimited raw materials had to
sell in the world market at lower than cost to others who then turn around
and sell finished products to Africans who then make the apparel to send to
the US. It is actually mind boggling that African leaders actually agreed to
do it, essentially destroying their own farmers*.
Since Frazer mentioned Lesotho´s textile sector, let us take a look at
Lesotho and three other countries, Madagascar, Namibia, and Uganda to
appreciate the effects of AGOA on nascent African textile industries.
Imagine my shock when I found out that there were over 50 Taiwanese-owned
clothing factories in Lesotho, a very small country (the size of Maryland)
that is completely surrounded by South Africa. The way Frazer talks about
Lesotho, you are led to believe that the people of Lesotho owned the
factories that were producing these AGOA eligible products. The Taiwanese
sought to take advantage of AGOA and Lesotho´s proximity to South Africa´s
good roads, highways and ports to ship million of jeans, T-shirts and other
apparel to American stores such as the GAP, K-Mart, J.C Penney at low cost.
*As for the thousands of new jobs for women, Frazer forgets to tell her
readers that the job migration to the capital was a result of the collapse
in rural farming which used to be entirely run by women*. The men in Lesotho
used to earn a good living by going to mine in South Africa, but they have
lost their mining jobs because South Africa stopped importing foreign
workers, and decided to use mechanized mining, leaving the men in Lesotho
without any livelihood. That is how the women of Lesotho became the
breadwinners.
So there was no real increase in overall employment and because only women
were being hired at these plants to sew and thread etc. the men were left
unemployed and desperate. The situation did not create wealth for the people
of Lesotho. Corporate America benefited from cheap labor and transportation
costs. As a matter of fact, despite what Frazer wants us to believe about
Lesotho, the textile industry in Lesotho was well underway before AGOA ever
came into the picture and AGOA may have actually irreversibly stunted its
growth and development. The real and serious challenge to Lesotho is what
happens to it in 2015 when the initiative ends and Lesotho made products no
longer have privilege to enter the United States market.
AGOA was a nightmare for the people of Namibia, they became victims of the
predatory transnational corporations like Ramatex Textile & Garment Factory,
a Malaysian company moved to Namibia in 2001 to take advantage of AGOA. The
plant turned cotton (imported duty free from West Africa) into textiles for
the US market. Herbert Jauch, head of research and education for the Labour
Resource and Research Institute (LaRRI) in a 26 March 2008 Report stated
that:
“…A study carried out by LaRRI in 2003 found *widespread abuses of workers
rights, including included forced pregnancy tests for women who applied for
jobs; non-payment for workers on sick leave; very low wages and no benefits;
insufficient health and safety measures; no compensation in case of
accidents; abuse by supervisors; and open hostility towards trade unions
etc…Ramatex used a significant number of Asian migrant workers, mostly from
China, the Philippines and Bangladesh. Although the company claimed that
they were brought in as trainers, most of them were employed as mere
production workers with basic salaries of around U$ 300 – 400 per month
which were higher than their Namibian counterparts*…”
In the end, Ramatex, the only beneficiary under AGOA in Namibia, closed its
factory leaving hundreds and thousands of Namibians unemployed. Rauch
writes:
“…Ramatex represents a typical example of a transnational corporation
playing the globalisation game. Its operations in Namibia have been
characterised by controversies, unresolved conflicts and tensions…Worst
affected were the thousands of young, mostly female workers who had to
endure highly exploitative working conditions for years and in the end were
literally dumped in the streets without any significant compensation…Ramatex
had shown the same disregard for workers when it closed its subsidiary Rhino
Garments in Namibia in 2005…”
On 19 November 2007 the Namibian paper quoted President Pohamba as saying:
“…AGOA has not yielded the desired results as far as American investment is
concerned despite the incentives provided by African governments to
potential investments…”
The story of Tri-Star in Uganda is basically the same story of exploitation
and destruction of nascent indigenous industries, plunder of abundant human
and material resources and another example of how African governments have
squandered the peoples´ resources in order to curry favor with Washington.
Lowery Museveni´s Ugandan government promoted Tri-Star in order to cash in
on AGOA. During its operation, Tri Star imported fabric from Asia and then
made finished clothing products for US markets, even though there is ample
cotton in Uganda. Instead of investing Uganda´s resources on establishing
milling factories, the Government of Uganda chose instead to do what was the
quickest and best option for US importers. The expectations were high.
According to a report published by the BBC in 2004:
“…The Tri-Star apparel factory in the Kampala suburb of Bugolobi is bright
and clean. Large motivational signs urge staff to build the nation. Banners
on the wall read “Made in Uganda, sold in USA”…Tri-Star supplies clothes to
a range of US companies…There are more than 2,000 workers at the site,
stitching clothes to sell to American companies such as Wal-Mart, JC Penney
and Target…”
Judy Auma, a Uganda based Staff Writer for African Executive wrote the
following about Tri Star, in a January 2007 article:
“…The factory, which was launched 5 years ago, received high government
support and was viewed as an opportunity for Uganda to exploit USA´s tariff
and quota free market. *Ugandans were made to believe the establishment
would not only nurture a rich and stable market for Uganda´s struggling
cotton farmers, but also become a reliable source of employment…Since its
inception, the factory has neither bought a single bail of Uganda´s local
cotton nor exported a stitch from locally produced fabric. Worse still, it
has promoted nearly zero growth in terms of employment and the development
of the cotton sector*…”
The company left the country without repaying any of its debts, leaving
behind a destitute workforce and an industry struggling to remain afloat.
What about Madagascar, the other nation that Frazer and company tell us
benefited from AGOA? It too has not fared well. A segment of the population,
again, only women, may have benefited from its textile sector, but all that
is at risk today, not because of anything of their doing but because of
political problems in that country that may disqualify Madagascar from the
AGOA list. As for AGOA benefiting the Malagasy people, let us take a look at
the statistics. A 29 March 2009 Africa Rising report says:
“…the promised AGOA benefits have not translated to a better life for
Madagascar´s people. Madagascar ranks at 143 out of 179 countries measured
by the United Nations´ Human Development Index Despite its economic progress
on paper, the country ranks 164th in terms of gross domestic product per
capital…”
Reports surfaced in June 2009 about Washington threatening to pull the plug
on Madagascar´s AGOA certification. These reports said:
“…Madagascar could be removed from eligibility for trade preferences under
the African Growth and Opportunity Act due to a recent change in government
that the U.S. has determined was “undemocratic and contrary to the rule of
law… the State Department has classified the change in government as a coup
d´etat and is therefore moving to suspend assistance to the government of
Madagascar…”
Madagascar is a good example of the US State Departments hypocrisy and
duplicity. Everyone knows that Ethiopia is by no means a democratic country
and that the minority regime has:
Violated international law and the Eritrea Ethiopia Boundary Commissions´
final and binding delimitation decisions and numerous Security Council
resolutions on Eritrea and Ethiopia, it has also violated both the African
Union and the United Nations Charters by invading and occupying sovereign
Eritrean and Somali territories
Committed international crimes in Somalia including rape, murder and wanton
destruction.
Violated and continues to violate the human rights of the Ethiopian people
by detaining thousands across the country for voting against the regime in
the 2005 elections. Thousands more are being held on trumped up charges,
including Birtukan Medeksa, a prominent Ethiopian opposition leader and a
judge. It should be noted here that Ethiopia is one of the countries used by
the Bush Administration in its extraordinary rendition program where
prisoners are taken to places like Ethiopia where in secret CIA run prisons
they are interrogated and tortured.
Committed genocides in the Gambela, Ogaden and Oromia regions of Ethiopia.
Genocide Watch and other rights groups are seeking a ICC indictment against
the regime.
Yet, *the US State Department that is threatening to remove Madagascar from
the list for violating one of the AGOA conditions today, has refused to take
any punitive actions against Meles Zenawi´s regime that has committed even
graver crimes*.
I am in no way suggesting that Ethiopian textile workers pay for the crimes
committed by Meles Zenawi and his regime by having their AGOA status
revoked, I am however suggesting that *the US State Department, if it wants
to salvage its fledgling credibility, can “look the other way” and don´t
punish the Malagasy textile sector workers for the “coup” in Madagascar, for
which they had no part. By the way, Madagascar may turn out to be the only
“success” story on AGOA*.
Today, the US State Department´s own Inspector General in his August 2009
agrees with this author and others who were skeptical of AGOA from the
get-go. Here is what he said in his scathing Report about Frazer´s Bureau of
African Affairs and AGOA:
“…the economic impact of AGOA has been limited even though most of
sub-Saharan Africa is now in AGOA… Many African countries have yet to
benefit substantially from AGOA preferences. Poorly developed
infrastructure, a lack of affordable credit, weak merchandising, and an
inability to meet U.S. phytosanitary regulations are among the many factors
that thus far have limited the intended trade promotion and diversification
effects of AGOA… *The bulk of AGOA exports result from petroleum and other
extractive industries. When U.S. imports of African petroleum products are
excluded, the sum of trade for which AGOA can make some boast for promoting
is relatively small*…”
Johnnie Carson, the new US Secretary of State for African Affairs ought to
take a closer look at AGOA and *make realistic and non-parasitic
recommendations to the Obama Administration.*
Trading with the Enemy By Jason Hickel, February 16, 2011
http://www.fpif.org/articles/trading_with_the_enemy
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