Trade must benefit both

The African Growth and Opportunity Act (AGOA) was created to build a lasting partnership between the United States and participating countries in Africa. The intention was to encourage good governance and rule of law, with the reward being better access to the U.S. — the world’s largest consumer market — through quota-free, duty-free exports.

While AGOA was supposed to feature increased business-to-business contacts, it did little to increase interaction between small- and medium-sized African businesses and their counterparts here in the United States, many of them owned and operated by members of the African diaspora. Matching African producers with U.S. companies such as J.C. Penney or Wal-Mart is not a strategy for long-term success.

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U.S. and African companies must be paired together on a similar scale and on the basis of common interest. There are dozens of small stores across the country that buy and sell African goods every day, but in a way that does not fully benefit business owners or their consumers. If we can find a way to link these businesses across the Atlantic Ocean in a more cost-effective manner, we will have a workable arrangement that will benefit both Africans and Americans. Mutually beneficial trade is the key to prosperity in which everyone has a stake in success.

This is why I authored and introduced, along with my co-sponsors, Reps. Karen Bass (D-Calif.) and Bobby Rush (D-Ill.), the bipartisan Increasing American Jobs Through Greater Exports to Africa Act, H.R. 1777. This legislation was intended to create conditions for U.S. companies to reap the benefits of increased U.S.-Africa trade and thus make it more attractive to investment.

In my own state of New Jersey, multinational companies such as Johnson & Johnson and Bristol-Myers Squibb already understand how to make African trade work for them. However, smaller companies across the country need help in not only identifying specific opportunities in African trade but in taking advantage of trade programs such as AGOA.

H.R. 1777 calls for a coordinated trade policy toward Africa. AGOA was supposed to lead to such a coordinated plan, but our bill specifically requires that one be established. We believe H.R. 1777 can expand U.S. exports by 200 percent over 10 years. We see our bill as creating many new jobs for American workers. Various studies show that for each additional $1 billion in U.S. exports, there are 6,000 to 7,000 new jobs in the U.S. For those in Congress and elsewhere who may not be as focused on helping Africa through AGOA, the prospect of mutual benefit might make AGOA much more appealing. With a Senate version of AGOA already in play, we can pass this legislation in this session of Congress and prepare the way for a more general AGOA extension.

An AGOA extension should eliminate some of the remaining obstacles for African producers. This is why I have suggested language in the next AGOA bill to build the capacity of African producers to use technology to provide the market information they need to succeed in the global marketplace. African farmers, for example, are already using cellphones to get information on prices and markets. This could be expanded to other products and include information that will enable successful strategies for African producers to sell into this sophisticated consumer market.

We also must consider how to use AGOA to protect the rights of workers or the environments in which they labor. American consumers have demonstrated that they are not willing to buy goods produced with child labor or through trafficked labor — that is, when they know this is the case. Remember the backlash in 1996 when it was discovered that Nike had used sweatshops to manufacture shoes in Asian countries. Furthermore, investors both large and small are increasingly less likely to invest in companies that violate human rights. Human rights do and should have both a moral and commercial role in trade.

We have a lot of work ahead of us, but African and U.S. governments and businesses can reach our mutual goals by effectively working together to identify the existing challenges and cooperating in the effort to eliminate them. This AGOA forum hopefully proves to be the one where we learn to listen to one another better and work in concert more effectively to write a new, successful chapter in the story of U.S.-Africa trade.

Smith has represented New Jersey’s 4th Congressional District since 1981. He sits on the Foreign Affairs Committee.