The AFL-CIO and the Solidarity Center released a new policy brief Thursday on how to improve the African Growth and Opportunity Act (AGOA) and ensure that it delivers on its ambitious goals of supporting democratic governance, enhancing civil society, combating corruption and promoting the rule of law in Sub-Saharan Africa.
In the 15 years AGOA has been in effect, it has increased exports from sub-Saharan Africa, but by focusing mostly on tariff reductions, it has not spurred broader development or fostered a robust and equitable economic system.
AGOA gives eligible sub-Saharan countries duty-free access to the U.S. market for a variety of products. To qualify, countries must establish or make “continual progress toward establishing” measures that promote good governance and a fair economic system. These include fundamental labor rights; the rule of law and political pluralism; a system to combat corruption; and economic policies that reduce poverty, increase access to health care and education and expand physical infrastructure.
Unfortunately, the eligibility criteria are rarely used to pressure countries to make changes. Recently, Swaziland became the first country to lose benefits, in part due to ongoing workers' rights violations. The AFL-CIO worked with Swazi partners to document the government’s egregious record on labor rights, and submitted a complaint to the U.S. government in 2013.
Swaziland is one of the poorest countries in the world, with 60% of the country living in poverty and an official unemployment rate of 28.5%. The government, one of the world’s few remaining monarchies, has banned all political parties and refuses to recognize democratically established trade union associations. Trade unionists are regularly imprisoned, harassed and intimidated.
While scrutiny of this repression is welcome, complete suspension of all tariff benefits is a blunt instrument. The ability to target benefit suspensions at industries or sectors where violations are occurring would leverage the power of employers to seek better enforcement, and interim measures beyond revocation would prevent autocratic regimes from passing the harm onto workers.
AGOA is due for reauthorization in September 2015. Reauthorization represents an opportunity to promote a coherent regional policy that benefits African workers and communities and addresses the challenges of a changing global economy. The report makes a series of recommendations to ensure AGOA promotes shared prosperity and sustainable, inclusive development. These recommendations include:
- Strengthening protections for fundamental labor rights and including a commitment to a decent work agenda, which ensures jobs do more than just pay survival wages by fostering social mobility, promoting dialogue through strong worker organizations and enhancing access to social protections like education and health care. Job growth in the formal sector has been modest, far below what was predicated when AGOA was enacted. The job growth that has occurred has often been poverty wage jobs, Swaziland’s garment factories being the most recent example.
- Requiring countries to develop transparency standards, particularly with respect to extractives. Oil, gas and other extractives account for between 80% and 90% of all exports under AGOA. Unfortunately, extractive-led growth has been linked to precarious employment, corruption, environmental degradation and nontransparent or forceful acquisition of land. Accurate accounting and public scrutiny can help address this problem by empowering civil society with the information needed to engage with local governments and hold actors accountable.
- Creating a more robust review procedure to determine country eligibility, to allow greater civil society participation and social dialogue and strengthen the ability to push for higher standards.
- Introducing interim measures beyond suspending all benefits that would allow a more nuanced and targeted approach when governments fail to live up to their obligations. An autocratic regime is unlikely to be deterred by broad U.S. action and is likely to pass the losses on to the workers and vulnerable communities. A more diverse range of problem-solving strategies could better address this dynamic and leverage sectors and industries in favor of the reforms needed to earn back trade benefits.
- Increase capacity-building to enhance social protections and develop human and resource capital. This includes building better oversight and transparency measures for corporate supply chains, offering education and training programs, funding infrastructure investment and addressing the impact epidemic diseases have had on the economy, particularly HIV/AIDS and tuberculosis. Overall, AGOA has done too little to encourage policies that forge links between industry and communities, build domestic demand, enhance educational and training opportunities or expand crucial infrastructure.
- Increase capacity-building initiatives to address the needs of migrant workers and informal workers. The informal economy has been a vital source of individual livelihoods, particularly for women and young workers. It is also a significant force in the overall economy, estimated to be responsible for more than half of GDP in sub-Saharan countries. Informal workers are too often excluded from important social protections and denied access to mainstream economic resources and are currently completely overlooked in AGOA.
To truly drive sustainable development and shared prosperity, AGOA must be reimagined as a comprehensive strategy to develop human and resource capital, build local capacity, promote good governance and spur job growth that is fair and sustainable and provides a decent living for African workers and their families.