By Sebastian Mallaby
Monday, May 31, 2004; Page A23
There's a program that works for Africa. It has created 150,000 jobs there, stimulated $340 million dollars of private investment and boosted the region's exports by perhaps $1 billion a year. This program costs the United States almost nothing, but it's about to be gutted. The culprits are the absurd rules of the Senate and the indifference of the Bush administration and prominent senators who could bust through the logjam.
The program is called AGOA, short for the African Growth and Opportunity Act. Its chief provision allows Africans to export clothes to the United States without paying duties. In 1999, when the AGOA bill was introduced in Congress, African garment exports to the United States were worth less than $600 million. Last year they hit $1.5 billion. AGOA also lifted duties on farm goods and other manufactured goods. All in all, Africa's non-oil exports to this country in 2003 were up a whacking 32 percent from one year earlier.
What's more, AGOA has achieved all this despite the fact that it's been implemented only partially. To participate in the program, countries need to jump through complicated bureaucratic hoops devised by U.S. Customs; as a result, only 13 of the nearly 40 countries theoretically eligible are deriving real benefits. In the select few, however, AGOA's impact has been impressive. In tiny Lesotho, 13 garment factories opened in 2001 and six in 2002. Employment in the country's apparel industry has jumped from 20,000 to 50,000 since AGOA's signing. Exports have almost tripled.
It's not just the exclusion of most countries that prevents AGOA from reaching its full potential. Like most "free trade" deals enacted by Congress, this one has several kinks designed to placate domestic protectionists. Some are comically absurd, but the butt of the joke is a continent where the average person lives on less than $2 daily.
AGOA lays down, for example, that Africans may take full advantage of the law if they make their clothes out of African or U.S. fabric. A South African firm duly won a contract with Limited Brands, a leading American retailer: It was for jackets made of local cloth on the outside and a U.S.-made lining on the inside. But the South Africans soon lost the contract, because U.S. Customs insisted that the shipment had to pay duty. The law, the bureaucrats declared, said that you had to use African fabric or American fabric. African fabric and American fabric was strictly verboten.
Another AGOA rule allows Africans to make some of their garments out of material from a third country, which usually means an Asian one. Based on this rule, Gap Inc. got ready to shift most of its orders for polo shirts to southern Africa. But when the Customs bureaucrats got a look at Gap's material, it was not to their liking. The collar and cuff fabric, you see, came in large rolls with perforations every few inches or so, indicating where to cut it. Perforated material is not material at all, as far as Customs is concerned; it is a "component."
You'd have thought that, given AGOA's mixture of triumph and absurd flaws, Congress would be keen to fix it -- especially since the rule allowing Asian material is due to expire altogether in September, destroying roughly three-quarters of the jobs that AGOA has created. Sure enough, fixing AGOA is precisely what the House would like to do. The Ways and Means Committee passed an AGOA bill earlier this month; it was backed by the conservative chairman, Rep. Bill Thomas (R-Calif.), and by the liberal ranking member, Rep. Charles Rangel (D-N.Y.).
But the Senate has a different attitude, one that is infuriating, complacent and destructive -- in short, highly senatorial. The Senate's position is that it's not against AGOA, quite likes the thing in fact but just can't get around to doing anything about it. Sen. Charles Grassley, the chairman of the Finance Committee, which supposedly has jurisdiction over trade, explained recently that he'd love to match the House's activism. But he added that an AGOA Senate bill would "be bogged down with unrelated issues and objections."
Come on, people, where's the outrage? If an AGOA bill is not passed fast, those new garment factories in Africa will close, and a successful program in the poorest region of the world will have been casually discarded. Already orders are being canceled, because the Asian-material provision will have expired by the time fresh orders are fulfilled. And why is this happening, exactly? Unrelated issues and objections! If that's not an indictment of our system of government, I don't know what is.
The logjam could be broken down, of course. If a high-profile bipartisan group of senators championed the legislation, others could be persuaded to resist bogging it down. Where is Majority Leader Bill Frist, who's been to Africa on medical missions? Where is Sen. Hillary Rodham Clinton, whose husband signed the first AGOA law? Where for that matter is Sen. John Kerry, or the Bush administration? They all care about Africa, after all.
© 2004 The Washington Post Company