THE TTALK QUOTES 

On Global Trade & Investment

 

Published Three Times a Week By

The Global Business Dialogue, Inc.

Washington, DC   Tel: 202-463-5074

Email: Comments@gbdinc.org

 

No. 60 of 2014 

MONDAY, SEPTEMBER 8, 2014     

 

   

Filed from Washington, D.C.     

     

Click here for last Friday's quote from Stephen Lande.
AGOA RENEWAL AND GLOBAL REALITIES

"I'd like to see us build a better partnership with Africa. ... There are other countries, like China and others, that are fully engaged.  ... We don't want to find ourselves in five or ten years in third place."

Rep. Vern Buchanan
July 29, 2014

CONTEXT
As noted previously, the Trade Subcommittee of the House Committee on Ways and Means held a hearing on trade with Africa and AGAO - the African Growth and Opportunity Act - on July 29.  Representative Vern Buchanan, a Republican from Florida, is a member of the Trade Subcommittee, and today's quote was part of the prelude to his exchange with the three witnesses.  Agreed to by both sides of the aisle, those three were Ben Leo from the Center for Global Development, William McRaith of PVH Corporation, and Whitney Schniedman of Brookings. 
Congressman Buchanan's exchange with Mr. McGrath was especially compelling, and we will quote it at some length. First, though, a touch more background.

William McRaith is the chief supply chain officer for PVH corporation.  The company began in 1881 "mending and selling shirts for local coal miners in Pennsylvania" and is now an $8 billion enterprise with such brands as Calvin Klein, Tommy Hilfiger, Van Heusen, Arrow, Izod and others.  Recently, Mr. McRaith and executives from other apparel firms undertook an investment study mission to Africa.  He talked about that trip in his written testimony, where he said that "every one of the other companies we had cajoled to join us on the trip agreed that Africa is ready for significant investment."

Congressman Buchanan told the witnesses that he had visited some ten African countries during the course of the last few years.  There is "not a lot of enthusiasm" for AGOA on their side, he said.  "And frankly," he added, "there's not a lot of enthusiasm on our side."  And so he asked, "What are a couple of things that you would recommend we might do going forward to make the difference?"
With that background, here is an excerpt from Rep. Buchanan's exchange with Mr. McRaith (our transcript):

Partial Transcript

MR. McRAITH:  We are at a moment in time today that is different to where we were 15 years ago.  ... You could say AGOA failed.  I'm not sure what the appropriate terminology is.  

If you look at my industry, the apparel industry, we refer to $24 billion of AGOA driven trade, only $900 million of which is from the apparel sector. 

A labor-intensive, in fact generally the first mover, [apparel is the] most labor-intensive industry in the world, and it's typically led the way into most developing countries.  The time is now.  It wasn't right 15 years ago; it's right today.  So it will be the private sector that actually drives most of this.  And we need the on-the-ground ambassadors, who in Ethiopia were incredibly supportive of the work that we did there on a recent trip.  [As they were] in Kenya, [and] similarly in Uganda.

So, I think that we've got to help the nations shake off the old AGOA.  Because I think they languish in it.  It didn't work.  There is no energy around it. You go to Africa, China is present everywhere.

REP. BUCHANAN: Everywhere.

MR. McRAITH: Europe is present everywhere.  America is MIA at this point.  We're missing in action.

BUCHANAN: That's my point. 

MR. McRAITH: But renew AGOA, because everyone is looking.  Everyone is ready to go.  However, don't think of September 2015 as the renewal date.  The renewal date is today, because it takes us a year to figure out what we are doing there.  We're ready to go. We're ready to move, and this is sitting right in front of us.
 
And quite frankly, if we do not renew AGOA, it's not about the timing of entry.  It's about the exit.    

End of Partial Transcript
RELATED EVENT
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.

COMMENT
If Mr. McRaith is correct, the notion of America being in third place in Africa isn't so much a future to be avoided as it is today's reality.  Our impression is that that is in fact a widely recognized reality.  Still if you were looking for evidence to back it up, you might start with the title of Howard French's new book, China's Second Continent.  On page 4, French tells us that "China's trade with Africa zoomed to an estimated $200 billion in 2012 ..., placing it well ahead of the United States or any European country."

A more pointed comparison perhaps was the subject of an anecdote from his travels in Ghana.  French writes:

"Here and there, little bridges took us over swampy inlets, where billboards in the local language, Nzima, and in English had been erected by the American economic development agency USAID.  They read:

'Wetlands save us.  Let's save the wetlands.'"

For French those signs symbolize a soft power contest between the U.S. and China, with the U.S. "hectoring Africans about their behavior," and China giving them hospitals, railroads, airports.

To be fair, the story French tells is a much bigger and richer one, and it is really much more about China and Africa, both separately and together, than it is about China's competition with the U.S. in Africa or anywhere else.  Given the fact that Africa is now a magnet for Chinese emigrants - French's real story - one might as well accept that China's economic relationship with Sub-Saharan Africa is going to be larger than America's for the foreseeable future.  As for the fundamental character of the African economies of the future, however, that's another question, and one way or another AGOA will be part of the answer. 
SOURCES & LINKS
From the Trade Subcommittee is a link to the page on the Ways and Means Committee's website with details on the July 29 hearing on trade with Africa and AGOA.   There you will find both audio and video version of the hearing as well as links to the written testimonies of the three witnesses.

China's Second Continent is a link to the review of this book by Stephen Ellis in The Wall Street Journal.
SUBSCRIBE
If you want to receive these TTALK Quotes, we're happy to send them to you.  That's the deal.  If you want to help and ensure that they keep coming, please


SUBSCRIBE NOW
It's just $50 a year.  Click here and you' re done.

Buy Now
Thank you.

Note: GBD Members are already subscribers and we thank them for their membership and support.

 

 

 

 

TO GET THE TTALK DAILY QUOTE IN YOUR INBOX

 

Or Other GBD Notices, Click below. 

Join Our Mailing List

 

© 2014 The Global Business Dialogue, Inc.

1140 Connecticut Ave., NW, Suite 950

Washington, DC   20036

Tel: (202) 463-5074

R. K. Morris, Editor

www.gbdinc.org