Thanks very much.
Good morning esteemed Ministers and heads
of delegations from our AGOA Partner
Countries, Secretaries-General and Commissioners
of the Regional Economic Communities, Honorable
Members of Congress, U.S. Government colleagues.
It's great to see so many friends here
from the private sector, civil society,
from our YALI program, who we have
worked so closely with over the last several years.
As I have learned from all of you, 'All protocol observed.'
As we open this final AGOA Forum of the Obama Administration,
it is hard not to be reflective.
As we look back at the last eight years,
I remember the launch of the Feed
the Future initiative that this department and USAID did so
much to develop across Africa.
There was the partnership that brought the Trade Africa
program, started first with the East African Community,
and then grew to a broader AGOA community.
Power Africa, which started one day in a visit to the Rift
Valley in Kenya to see if they could harness
the potential of geothermal energy there,
and it spurred on and inspired a program
to try and electrify Africa.
The YALI program, which the Assistant Secretary mentioned.
The Doing Business in Africa initiative,
which culminated in just last week's second U.S.-Africa
Business Forum with representatives from 26 African
countries and 200 business leaders.
It has been an incredible period in our relationship,
and I am grateful for our partnership with all of you
that made that happen.
When we look around the world, there
has been an explosion of innovation
like virtually never before.
Innovation that has changed every aspect of our lives.
In 2000, according to the ITU, there
were about 730 million cellular subscriptions in the world.
Now, there are 7.4 billion, including 772 million
in Africa alone.
Google - today, a verb in the Oxford English Dictionary
- is experimenting with blimps and driverless cars.
Amazon hopes to start using drones to deliver packages.
Microsoft is looking at ways to use old telephone
towers to bring wireless capacity
to rural African districts.
And applications like Facebook, and YouTube, Skype, and Twitter
have revolutionized the way people connect to each other
and to the rest of the world.
In Africa, home-grown technology has
been bringing practical solutions to everyday problems.
In Kenya, for example, the 2007 launch of m-Pesa
brought money out from under mattresses
and onto mobile phones, empowering
people who before were too poor or too remote to enjoy
traditional banking.
In Botswana, the startup Modisar aims
to bring livestock management into the digital age.
The South African startup Gradesmatch
developed a mobile application that
provides educational opportunities
and career guidance to South African students
in remote areas.
And with more than 90 technology hubs throughout the continent,
we know there is much more to come.
Containerization and air freight have made the world smaller
than ever.
And, mirroring that, countries are increasingly
seeking agreements to reduce the barriers that
hamper trade between them.
Last year, the COMESA), the East African Community,
and SADC launched the negotiation of the Tripartite
Free Trade Area.
The year before, three regional groupings
- ECOWAS, SADC, and the EAC - concluded "Economic Partnership
Agreements," or EPAs, with the European Union.
And now, efforts are underway to complete a Continental Free
Trade area.
Here, in the United States, we signed the Trans-Pacific
Partnership agreement with 11 Asia Pacific countries
and are pressing forward with our negotiation
of the Transatlantic Trade and Investment Partnership
agreement with the EU.
This builds on the 14 agreements we already have
in place with 20 countries.
And our efforts to reinvigorate plurilateral and multilateral
processes at the WTO are making good progress.
Against this backdrop, the question
that we arrive at today is: where do we go from here?
How can we further deepen and expand the U.S.-Africa trade
and investment relationship 16 years into this "new century"?
Certainly, AGOA will continue to be a vital tool
for the near future.
The program has had important successes, as the Assistant
Secretary said.
It has helped sub-Saharan African countries nearly triple
their non-oil exports to the United States
and has supported diversification
of exports toward manufactured products like textiles
and apparel in Kenya and Ethiopia
and automobiles in South Africa.
And the 10-year extension of AGOA last summer by Congress
will provide an added boost by giving businesses and investors
an unprecedented period of stability in the trading
relationship to step up their sourcing and investment
decisions.
The one thing investors everywhere
crave is predictability, and the 10-year extension of AGOA
provides just that.
But the full potential of AGOA has not yet been fully reached,
and we need to find ways to change that.
Although sub-Saharan Africa now exports more in absolute terms
to the United States than it did in 2000,
Africa's share of U.S. imports is still only one percent.
AGOA beneficiaries only claim preference
on a fraction of the nearly 6,500 eligible tariff lines.
And only a handful of countries fully
utilize its apparel provisions.
AGOA utilization strategies, which
the USAID Trade and Investment Hubs, the African Development
Bank, and others are developing with beneficiary countries,
can help.
Through these strategies, and continued efforts
to coordinate assistance to address
supply-side constraints, we can work
to prioritize sectors and products for AGOA trade
and plan ways to boost competitiveness.
But we should also challenge ourselves
to think more broadly about the future of our relationship.
That is the subject of the report that President Obama
unveiled last Wednesday, entitled Beyond AGOA:
Looking to the Future of U.S.-Africa Trade
and Investment.
The report makes the case that both the United
States and sub-Saharan Africa have much
to gain from deepening our ties.
For example, with its huge youth population,
sub-Saharan Africa will need to look to export-led growth
strategies, as Asian countries did in the 1990s,
in order to create urban jobs, raise rural incomes,
and reap a demographic dividend.
The McKinsey Global Institute estimates
that manufacturing output is set to rise significantly
in Africa, and create an estimated $643 billion jobs
over the next decade.
Africa will also need a more diversified export strategy -
with greater reliance on manufacturing,
value-added agriculture, and new online industries -
and outreach to a larger mix of regional and global markets
to reduce its vulnerability to external shocks.
For the U.S.' part, Africa's large and growing consumer,
commercial, and industrial markets hold great potential
for exporters across a wide range of industries.
Africa's imports are likely to grow faster
than the rest of the world, as Africa
settles into a period steadier economic growth.
Interest in increasing U.S. participation
in African markets will also grow
as competitors begin locking in preferential access
to those markets.
It is thus in our mutual interest
to find ways to adapt our trade and investment
framework to the times.
As more countries gravitate toward free trade arrangements,
the competitive advantages that developing countries
derive from tariff preferences may well erode.
Decisions about where to source and where to invest
will increasingly be based on other factors,
such as the overall cost and ease
of doing business, as well as considerations
of sustainability and reputational risk.
Moreover, the barriers facing exporting companies
are changing.
Let's go back to the technology example.
A technology startup in Nairobi is
less likely to be concerned about tariffs
than about access to services markets,
balkanization of the internet, limits on data flows,
and forced technology transfer.
Against that light, the "Beyond AGOA" report
explores the advantages and disadvantages of various trade
policy instruments that American and African policymakers have
used in the past to increase trade and attract investment
- including preference programs, free trade agreements,
and cooperative agreements like those
that we have negotiated with the East African Community
and are extending to others under Trade Africa.
In conducting this analysis, following a year of outreach
to stakeholders in the United States
and on the African continent, we deliberately
chose not to prescribe a particular outcome.
We believe firmly that the contours of the path
forward can only be defined through our work
together over the coming months.
But we are also convinced that the need
to do that work is urgent, and should
be guided by a number of general principles:
1.
We should account for the diversity of Africa
and the different levels of readiness and capacity
across the region.
Some countries are eager to find new horizons in our trade
relationship.
Others need more time to get there.
As the EU experience with the EPAs suggests,
a "one-size-fits-all" approach to all countries is likely
to meet with difficulties.
2.
We should continue to support Africa's efforts
at regional integration even as we
accommodate Africa's diversity.
One way forward may be to identify regional champions,
who are ready and willing to serve as trailblazers
and to help bring their regional partners along over time.
3.
Any future framework should incentivize reforms
across a broad spectrum of issues.
That will improve the "enabling environment"
and support sustainable and inclusive growth.
The Beyond AGOA report explores a spectrum of scalable policy
"building blocks" that could serve as the basis for reforms.
4.
Any future framework should support value-added production
on the continent and promote diversification of exports.
We should take a fresh look at all of the possible tools -
including capacity building, rules of origin,
and other factors - that could provide incentives.
5.
We should move toward greater reciprocity.
This is the trend in Africa, the United States,
and the rest of the world.
The demand for a more reciprocal approach
will intensify as other such agreements take effect.
6.
Finally, and very importantly, our trade policy framework
should promote African integration
into the global trading system.
Limited participation in plurilateral and multilateral
initiatives freezes sub-Saharan Africa out of important markets
and deprives them of a voice in the debate.
We don't pretend these are the only relevant principles.
And we look forward to a robust debate about the way
ahead today and in the coming months.
This is the start of a vital conversation.
Marveling at the ways countries shaped the lives of each other
through trade, Dr. Martin Luther King
talked about "an inescapable network of mutuality,
tied into a single garment of destiny."
Our destinies are, indeed, tied together
and the decisions we make now will
have implications for generations into the future.
Thank you very much.