The hard-won African Growth and Opportunity Act allows duty-free exports to the U.S. from eligible African countries, and it remains a controversial trade agreement, but it has changed the conversation about U.S.-Africa trade, according to one of its architects.
Rosa Whitaker is CEO of African investment consultancy The Whitaker Group and architect of the AGOA.
“We had to fight the labor unions,” Whitaker said in an African Business Magazine interview. “When I look at it today I see that trade has significantly increased, not just expanded but diversified … The biggest gain was that the whole narrative changed. We no longer saw Africa as benefactors of charity. We were able to substitute paternalism with partnership.”
From African Business Magazine
Rosa Whitaker is probably not your image of a trade bureaucrat, but then again so much in her life has been out of the ordinary.
“My background, for some reason, surprises many people in Africa, perhaps because in many societies, your last name and who you were born to still have a lot to do with your success,“ she says. She was born in Washington, D.C. to a working-class family. Both her parents worked for the U.S. Postal Service.
“We struggled … I just thought that all white people were happy and all white people were rich.
“I might have had a few white teachers in school but we didn’t have that much engagement.” However, when she was later placed with a conservative white family as part of an exchange program, she came to love them like relatives.
At 13 she joined the campaign resulting in the District of Columbia Home Rule Act of 1973, which gave the inhabitants of the U.S. capital greater control of their own local affairs. It was the first of many such victories for Whitaker.
In 1979, she went to London to study. It was the time of the Lancaster House talks on Zimbabwe, which awoke her interest in the country. She subsequently went there as a volunteer.
“I was supposed to live in a rural village, but they didn’t think I would make it,” she says. “So my Zimbabwean friend invited me to live with her family. Her uncle was Edson Zvobgo, Zimbabwe’s justice minister. That experience awoke a passion in me. I just knew that there was no turning back and Africa would be my life.”
Even so, Whitaker returned to Washington and graduate school, eventually finding work in the U.S. Congress and State Department. She only wanted to work on Africa, so she turned down any other assignment until she was offered a post at the U.S. Embassy in Côte d’Ivoire in 1994, tasked with talking to government officials to convince them to join the World Trade Organization.
It quickly became clear to Whitaker that international trade was simply not working for Africa. “That got me thinking a lot about our agricultural subsidies and I saw how they were really disrupting things on the ground. We were basically subsidizing U.S. farming production, and selling below market value in Africa – but in so doing we were disrupting African farming and agricultural development. We were literally dumping.
“I started talking with people of like mind and we started questioning the fact that the U.S. did not have a trade policy for Africa. The US policy was to view Africa as a charity case, the beneficiaries of aid.”
Whitaker took a leave of absence from the State Department to work on a team under the veteran Congressional activist Charlie Rangel on the drafting of AGOA, the law that facilitated trade access to the U.S. for African countries meeting eligibility requirements on the rule of law, human rights and labor standards.Loading...
“It was very controversial. We had to fight the labor unions. Clinton was not initially supportive of AGOA because the NGO community said that this was a ploy to get rid of Africa’s aid, replacing it with corporate welfare. But once Clinton embraced it, he fully embraced it. When I look at it today I see that trade has significantly increased, not just expanded but diversified.”
She lists the positive achievements of the legislation: full market access, with just a few exceptions, for African goods from signatory countries; a fair share of infrastructure funds for Africa from the Overseas Private Investment Corporation (OPIC); and expansion of U.S. Export-Import Bank’s coverage in Africa.
But that was not all. “The biggest gain was that the whole narrative changed,” Whitaker says. “We no longer saw Africa as benefactors of charity. We were able to substitute paternalism with partnership.”
Clinton did not even wait for AGOA to be passed before appointing Whitaker assistant trade representative for Africa. The U.S. had trade representatives for every other region of the world except Africa, which fell under the remit of USAID.
Is there anything Whitaker wanted but did not get from AGOA? “I felt like I knew early on that we would not get an American investment response from AGOA, so in other words, market access wasn’t enough to get American companies to go there and invest,” she says.
“What happened is that Chinese investments went into Africa and they benefited from AGOA by setting up textile businesses in AGOA-recognized countries like Lesotho and exporting to the U.S. without the 30 percent tariff that was then in force. You could make a strong business case for Chinese companies to do that.”
She never thought AGOA was enough to bring U.S. investment into Africa. For that to happen, some kind of developmental tax break for firms that invested in labor-intensive sectors in Africa would be necessary. “But we were never able to get these tax breaks under the AGOA legislation,” she says.
And AGOA never underwrote any large infrastructure funding. “Our first OPIC Africa infrastructure fund was for $500 million, and that was reduced to $300 million.
Well, we can barely do a road for one African country for that sort of money, so that wasn’t serious,” she says. She adds that the other major thing that she wishes could be done is to reform the “massive aid-industry complex” – the labyrinth of consultants and NGOs that siphons off so much money meant for Africa. “Instead of these million dollars studies and this waste, why don’t you help to build Africa’s export capacity?” Whitaker asks.
In 2003, still not seeing U.S. companies going into Africa, Whitaker established The Whitaker Group to help channel investment into the continent.
“Our mission is quite simple: utilising enterprise solutions to address poverty. My interest is in justice, and infrastructure is one of our pillars,” she says. “We are identifying infrastructure projects, designing economic transformation initiatives around infrastructure, leveraging infrastructure in a way that you optimise the social and human development goals.
Finding no interest for building African infrastructure in the West, Whitaker turned to China. She went to Beijing and began interviewing companies, trying to identify Chinese companies that cared about the environment, would not pay bribes, and that cared for the social as well as economic dividends.
“We found one that we encouraged to come into Uganda on a railway project – the China Harbour Engineering Company (CHEC). We don’t work directly for them, but we work with them, we advocated for them because they are one of the top state-owned enterprise companies.