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Struggling to make it in Kenya

The African Growth and Opportunity Act, or AGOA, was designed to put Kenyan-made clothes on shelves alongside those from China and Taiwan. But for many, the trade deal isn't living up to its promise.

August 05, 2009|Edmund Sanders

U.S. officials say such stories demonstrate AGOA's success. They say that if the program is failing to reach its potential, it's largely because African governments and investors are not taking full advantage.

But even as AGOA attempts to open the door to more African trade, other U.S. policies have slammed it shut, experts say.

Large subsidies for U.S. cotton growers and other American farmers continue to block African exporters from reaching the U.S. market, said Stephen Hayes, president of the Corporate Council on Africa, a private U.S.-based group that seeks to stimulate trade.

Kenyan officials also complain that trade is hurt by tight U.S. security policies and what they see as unnecessarily strict quality and health regulations for imports.

Citing the risk of terrorism, the U.S. Department of Homeland Security last month suspended what was to be the first direct Kenya-U.S. flight by Delta Airlines, delivering a blow to Kenya's flower farmers who had hoped to speed up deliveries.

One of the biggest obstacles to increasing African exports is the continent's lack of adequate infrastructure, including good roads, educated workers, reliable electricity and stable, honest governments.

At Alltex EPZ Ltd., a foreign-owned garment maker that last week was busily churning out thousands of Arrow sweatshirts, electricity costs are twice as high as they would be in Egypt, and frequent outages require costly backup generators, said Sudath Perera, the Sri Lankan general manager.

Workers are paid about $110 a month, four times what comparable garment workers make in Bangladesh, he said. One section of the route leading from the factory to Kenya's port is still a dirt road with rocks and mud holes.

Without the trade agreement, he said, his company would never have been started and would probably not survive in the current environment. But he said the real test would come in 2015, when AGOA's trade breaks are set to expire.

He's optimistic that he can use the next five years to strengthen ties with U.S. retailers and improve his factory's productivity and profits.

"I think we can do it," Perera said. "By 2015, we should be able to compete, even without AGOA."


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