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‘Exporters must understand consumer preference for improved market access’

By Femi Adekoya
21 February 2018   |   4:21 am
Accounting for a paltry volume of $9 million out of $2.7 billion agricultural exports recorded by the continent to the United States in 2017, the State Department’s Acting Director for Economic and Regional Affairs...

Accounting for a paltry volume of $9 million out of $2.7 billion agricultural exports recorded by the continent to the United States in 2017, the State Department’s Acting Director for Economic and Regional Affairs, Harry Sullivan has urged non-oil exporters to identify consumer preferences and regulatory standards in their target markets to improve market access.

To benefit from the extended trade deal, Africa Growth and Opportunity Act (AGOA) by the U.S, Sullivan said private sector operators must have a clear understanding of the markets they are targeting.

According to him, the American market is a competitive and difficult to break into if an exporter does not understand the consumer niche and requirements.

“The main thing is that I think that there’s huge potential in Africa. There’s also huge potential for African businesses in the United States. It’s not easy, but I think businesses that have been able to take advantage successfully of the American market have benefitted significantly and I would encourage you all to promote AGOA among the private sector in Africa, and work with our trade hubs in order to make concrete opportunities happen.

“So, what the African Growth and Opportunity Act does is remove the tariffs from African goods, from 6,000 African products. And then it is up to the African businesses to take advantage of that, to research the market in the United States, to find out what American consumer preferences are in whatever business they are involved in, and then to build businesses from there. And breaking into international markets is difficult, but as we have seen with the growth of global trade, it is very, very possible.

“But country after country has enriched themselves based on the access to the American market, finding consumer niches that are unmet or can be better met, through trade. We’ve seen Japan and then Korea, Taiwan, Singapore, and then mainland China, really enrich themselves because of the American market.

“What we would like to see is since the African population will double by 2050, because there is a huge demographic wave of youth that is going to need jobs, we are hoping that Africa can be the next area that takes advantage of these opportunities in the competitive and difficult American market”, Sullivan said.

For nearly twenty years, US trade with sub-Saharan Africa has been facilitated mainly through trade preference programs, namely the US Generalized System of Preferences (GSP) and African Growth and Opportunity Act (AGOA), which provide preferential and duty-free treatment on thousands of products entering the US market.

The Trump Administration has signalled that these programs will remain a priority, and there is strong evidence that continued support for trade preference programs aligns with the broader US trade strategy. AGOA, which expires in 2025, will likely remain a cornerstone in US-African relations.

On the future of AGOA, Sullivan said: “the short answer is that we don’t know. So, in 2025, there are various pieces to this puzzle. First is that we don’t know what administration we’re going to have in 2025; we don’t know what that piece is going to look like. But of course, the African Growth and Opportunity Act has been passed by Congress, not by the administration, although administration support is important.

“So, we are thinking about how we can move the trade relationship between the United States and Africa to something that is more reciprocal. But frankly speaking, these are very early days, and the players are going to be different in 2025, so we are exploring how we can move forward with our relationships with African countries beyond AGOA”, he added.

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