(MnG) Scramble for Africa

Scramble for Africa
KARABO KEEPILE | JOHANNESBURG, SOUTH AFRICA - May 07 2010 10:56

The United States said this week it is trying to promote a new type of trade, where Africa will add more value to its own raw materials, and that processed products -- whether they are fruit juices or clothes -- can go not only to the US duty free but also to the rest of the world.

Africa may have a wealth of natural resources but these are typically sold for a pittance, while finished products are sold at a massive profit internationally. In addition, African countries that attempt to export processed and manufactured products find themselves having to contend with additional duties.

Diamonds, for example, are shipped from Botswana to India for cutting and polishing and cotton is shipped from West African countries all over the world where it is made into textiles and clothes.

South Africa is one of the few countries in Sub-Saharan Africa that already has a wide variety of value-added products, like fridges, fruit juices, seafood and wines.

"Some other countries -- while they accept your raw commodities duty free -- as soon as you start adding value to it then the duties are put in place," said Florizelle Liser, assistant US trade representative for Africa at a round-table discussion in Johannesburg this week.

Liser, who has extensive background in trade negotiations in Africa, has already met with South Africa's business community, including producers of cars, chemicals and other products that are being exported to the US under the African Growth and Opportunity Act (AGOA). AGOA gives South Africa and other countries in the region duty-free entry into the United States for certain manufactured and processed goods.

South Africa and the US signed a bilateral agreement in April to establish a forum where a range of issues, including trade, could be discussed.

Last untapped market
Liser was in town to meet with government officials as well as the private sector.

"Many of us see Africa's more than 680 000 000 people as the last untapped market," she said.