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Remarks by Chief Agricultural Negotiator Isi Siddiqui at the AGOA Agribusiness Forum

Remarks by Ambassador Isi Siddiqui
Chief Agricultural Negotiator, Office of the U.S. Trade Representative

August 6, 2010
AGOA Agribusiness Forum
CEO Roundtable on Agribusiness:
Successfully Linking Value Chains for Trade and Investment
Kansas City, Missouri

*As Prepared for Delivery*

“Trade is critical for Africa’s development. To increase trade we need to improve Africa’s global competitiveness and build its capacity to trade.

“As the Chief Agricultural Negotiator at USTR, I am responsible for the agriculture negotiations in the World Trade Organization, where I continue to pursue a balanced and ambitious conclusion to the Doha Round negotiations.

“And market openings for agriculture are critical to ensure such an outcome. President Obama sent a clear signal at the Toronto G-20 meeting that what is on the table is not acceptable and that there needs to be more access to the key emerging markets – including China, Brazil and India – to ensure new market opportunities for not just the United States, but also for the countries in Africa.

“African countries have an important stake in the WTO Doha negotiations. Africa’s share of global trade has shrunk by a third since 1970. We also recognize that agriculture is the largest employer in African countries, accounting for about 60 percent of the labor force and producing about 25 percent of GDP.

“We believe an ambitious and balanced outcome to the Doha Round provides the best chance of creating new market opportunities for global trade – in particular for Africa’s value-added products, not just its commodities, to enter fast-growing markets. It is also the best way to ensure that trade’s promise as an engine for economic growth can be fully realized by African nations.

“We also know that cotton is an important source of income to many poor farmers in Africa and that many have called for reforms in this sector as one means to help these farmers.

“As we see it, the best way to advance farm trade reforms globally – not just for cotton, but for all agricultural commodities – is multilaterally, in the agricultural negotiations of the Doha Round.

“We are mindful of the cotton provisions in the 2005 Hong Kong Ministerial Declaration, and will be working in Geneva multilaterally to find a way forward on this important issue.

“We also recognize that our Congress will need to address cotton as it prepares a new Farm Bill.

“Discussions on this point will also be part of our discussions with Brazil as part of the Framework we agreed to in June as a result of the WTO dispute on cotton.

“The political reality is that we’re not going to be able to come up with an answer on cotton without working on all of the other products that are important to WTO members, and addressing market access for cotton and other products to ensure the Doha Round leads to increased markets for agricultural products.

“We are also working in the WTO on trade facilitation, because simplifying and modernizing customs procedures enhances trading opportunities, improves the investment climate and helps better integrate African countries into global supply networks.

“Trade Capacity Building (TCB), also known as ‘Aid for Trade,’ helps to improve the linkage between trade and development by assisting countries to develop physical, human, and institutional capacity necessary to take full advantage of trade opportunities and to increase growth and reduce poverty.

“We also will continue to support the WTO’s Enhanced Integrated Framework through bilateral trade capacity building assistance and an on-the-ground presence in African countries. This will include the work of USAID, our regional Trade Competitiveness Hubs, and the Millennium Challenge Corporation, among others.

“In addition to our work in the WTO and on Trade Capacity Building, the United States is using trade preference programs, like AGOA, to help Africa integrate better into the world trading system.

“By building on the market access already provided by our Generalized System of Preferences program, AGOA has opened the U.S. market to almost all goods produced in AGOA-eligible countries and has helped to increase both the volume and diversity of U.S. trade with sub-Saharan Africa.

“AGOA has provided new market opportunities for African exports, especially of non-traditional and value-added products, including in the agriculture sector.

“African countries are already starting to diversify their trade with the world and are exporting more value-added and non-traditional agricultural products, including processed and packaged foods and beverages.

“West African countries like Ghana are no longer sending just raw cocoa beans, but also processed cocoa butter, paste, and powder. Uganda is not sending just coffee, but is now roasting and marketing its own specialty coffee for the U.S. market. Zambia is sending us processed chili peppers and other specialty food spices and preparations.

“Even in the midst of a global economic downtown in 2009, African exports of agricultural products to the United States under AGOA and GSP reached $290 million and included fruits, including grapes and citrus, fruit juices, and preserves, wine, nuts, cut flowers, prepared foods, bird seed, tobacco, and sugar.

“AGOA has also been good for U.S. businesses. By providing incentives and support for African economic reforms, AGOA has helped to foster an improved business environment in many African countries, helping to create new opportunities for U.S. exports and investment.

“Nonetheless, we’ve learned from our experience with AGOA that market access alone isn’t enough. There are some major obstacles and constraints to increased African exports, particularly in the agribusiness sector.

“The answer is not expanding the list of AGOA products – almost everything is already covered – but in increasing the utilization of AGOA.

“While more African countries are taking advantage of the benefits of AGOA, there are still a few countries that have yet to export products under AGOA. Country and product utilization of AGOA is nowhere near Africa’s potential, and we understand that Africa has also not fully taken advantage of other trade initiatives giving Africa’s products preferential market access.

“In most cases, Africa’s agribusiness sector is still in its early stages/infancy. Many African countries simply don’t have the resources or capacity to produce large quantities of value-added agricultural products needed to competitively meet the enormous global demand for such products.

“African countries also face other ‘supply-side’ constraints including unreliable or high-cost energy, inadequate transportation infrastructure, and insufficient aviation and maritime service which often cost twice as much and takes twice as long to ship to the United States when compared to other regions.

“African businesses and foreigners wishing to do business in Africa often face environments, including policies, regulations, and red tape, unfriendly to establishing and growing competitive enterprises; and African entrepreneurs struggle to overcome their limited access to capital.

“We are all aware of the many challenges, but we must work together to recognize and address these challenges and boost Africa’s agricultural competitiveness.

“To strengthen Africa’s global competitiveness, African countries need greater coordination between their development and trade strategies.

“A critical component of these trade strategies should be public-private sector coordination and partnerships.

“In the AGOA context, the result of these strategies -- derived from public-private sector coordination -- have been strategic AGOA Action Plans.

“Competitiveness can’t be reviewed and strengthened at the macro level. It requires sector and sub-sector specific strategies and Trade Capacity Building. Working at the sector and sub-sector level allows one to focus on the specific needs, such as trade shows, the removal of particular supply-side constraints to trade, and coordinated follow-up activities.

“I’m looking forward to hearing other perspectives, views, ideas during our discussion this morning. Thank You.”