Stephen (Steve) Lande is the president of Manchester Trade, a former trade negotiator with 12 years at USTR as a senior negotiator and an expert on Africa.  He was the third and final speaker at the Cordell Institute's August 5  program on Africa and the WTO, which was co-sponsored by the Global Business Dialogue.

Mr. Lande has a rather jaundiced view of the way Africa has been treated in the multilateral trading system.  Indeed, he began his presentation saying, "To put it mildly, the WTO has screwed the Africans for the last 20 years."   He backed up that assessment with a cogent analysis.  One element of that was the long-running "banana war" in the WTO, which started in 1991 with a complaint about EU preferences for products from ACP - African, Caribbean, and Pacific - countries and ended in 2009.  Africa may not have been one of the principal protagonists, but it was a war Africa lost.  Another element was Pascal Lamy's promise to give the Least Developed Countries, LDCs, "a round for free."  Inadvertently, that drew an unhelpful distinction between LDCs and other developing countries.

The capstone of Mr. Lande's presentation, however, was his recommendations for improving AGOA - the African Growth and Opportunity Act - which is the centerpiece of U.S. trade policy towards Africa.  Today's quote was one of those recommendations.

AGOA is a preference program.  It came into being in 2000 as Title 1 of the Trade and Development Act of 2000.  It was reauthorized in 2004 until 2015, and if is to continue beyond next September, it will need to be reauthorized again in the coming months. 

First Proposal. To state the obvious, today's quote has two key phrases.  One is "least developed country" and the other is "regional integration."  All 49 countries in Sub-Saharan Africa are developing countries, and many of them - 33 by our count - are on the UN list of 48 Least Developed Countries, LDCs.  But several are not on that list, and having different trade policies for least developed and other African countries can undermine efforts to promote regional integration, which both African countries and their developed-country trading partners, like the U.S. and the EU, say they want to promote.

Regional integration in Africa is relatively unfamiliar territory for your editor.  Having made that confession, the integration efforts and organizations of Sub-Saharan Africa are impressive. We would include here:

SACU - The Southern African Customs Union, which includes Botswana, Lesotho, South Africa, and Swaziland.

SADC - The Southern African Development Community with 15 members including Angola, Botswana, and the Democratic Republic of the Congo.

COMESA - The Common Market for Eastern and Southern Africa, with 19 members including Burundi, Kenya, and Zimbabwe.

EAC - The East African Community, which includes Burundi, Kenya, Rwanda, Uganda, and Tanzania.

We are not sure whether it is these groups or others that Mr. Lande had in mind when he explained his first proposal for improving AGOA.  In any case the idea is this: where there is an African economic unit, the majority of whose members are least developed countries, all of the members of that unit should be treated as LDCs.

Second Proposal: Give credit for components.  "Let's give AGOA duty-free preference for products which have significant African components, having significant African input," Mr. Lande said.  In a world of global value chains, the logic of this proposal is irrefutable.  If you want to help a country that has found a niche making component X for product Y, you are going to have to give some kind of preference to product Y, whether the final product comes from Burundi or Belgium . 

Third Proposal:  Do something about tariff-rate quotas, TRQs.  "In point of fact, the most prejudicial system [for least developed countries] accepted in the WTO is the tariff-rate quota,"  Mr. Lande said.  As he explained, the two-tiered tariff system known tariff-rate quotas usually operates by picking a base year and then allocating quotas for the lower, inside-the-quota tariffs, on the basis of trade during that year.  But, he said, the whole point of a preference is to try to give an advantage to a country that has not traditionally had a strong market position.

On Wednesday, September 10, GBD will host a session on Africa and American Trade Policy: An Update, with speakers from Capitol Hill (Angela Ellard), USTR (Florie Liser), and Exim (Benjamin Todd).  This session is slated to run from 8:30 to 10 a.m. at the National Press Club in Washington.  Please click the title link for registration options and other details.

With an event next week, GBD will be doing more on Africa and trade, and so we will save most of our comments on the broader issues for another time.  As for Mr. Lande's AGOA proposals, we note the unfortunate irony that, while they all make sense, they are all very difficult.  

On the first proposal on LDCs and non-LDCs, we are tempted to edit the goal.  Mr. Lande talked about treating non-LDCs as LDCs in certain circumstances.  We would phrase it differently: let AGOA treat all of the countries in an economic unit as a unit.   That may be a distinction without a difference, but, it might make for a more productive discussion.

On the second proposal, giving preferences to components, its great benefit is that it recognizes a reality.  The difficulty comes from the fact that lawmakers in general want to shape reality but often have a hard time accepting it or adapting to it.

Finally, with respect to his argument about TRQs, it seems to us both absolutely correct and largely hopeless.  After all, if we are dealing with products that are so politically sensitive as to need TRQ protection, Congress is not likely to want to go through the painful contortion of making that bit of protection just a little more logical.