[Liberia]...Gets Trade Boost - U.S. Calls It 'Useful Tool to Rebuild Liberia'

from All Africa

During her pre-inauguration tour of the U.S., President Ellen Johnson-Sirleaf obtained the Bush Administration's commitment to the reconstruction of Liberia following years of destructive warfare. Since inauguration, representatives of the U.S. Department of State, influential members of the U.S. Congressional Subcommittee on Africa, and the United States Aid for International Development (USAID) have been reiterating the commitment. They have been hinging it on President Sirleaf's commitment to human rights and the extradition of Charles Taylor to Sierra Leone as a way of fighting impunity. Many thought that the U.S. was creating too much bottlenecks too soon.

But now, the U.S. seems even more forthcoming, this time giving Liberia a tool to reconstruct itself. But the question many are asking is, "How readily useful and timely is the tool being provided if it is a tool, that is?" The Analyst's Staff Writer has been examining the "tool" in light of the concerns being raised. .

If all goes well, Liberia will join 137 developing countries that are currently enjoying U.S. duty-free trade benefits.

A press release issued by the Office of the U.S. Trade Representative (USTR) said President Bush signed the proclamation to qualify Liberia under the Generalized System of Preferences (GSP) Program.

With the reinstatement of the privilege, Liberia is now qualified under the GSP program to export nearly 3, 450 different products duty-free to the United States.

If Liberia qualifies for the Least Developed Countries (BDCs) status after a 60-day period of congressional review that began last week, Liberian businesses will be allowed to export duty-free another 1,400 products into the U.S.

"By reinstating Liberia's GSP eligibility, the United States is providing strong support to recently elected President Ellen Johnson Sirleaf's efforts to increase employment, diversify exports and stabilize society," U.S. Trade Representative Rob Portman said in the release.

He said the GSP eligibility provides a useful tool in helping to rebuild Liberia and bring hope to its people.

Liberia's duty-free trade benefits were suspended in 1990 because of concerns about workers' rights, according to the USTR release.

"But President Sirleaf has made improving workers' rights a high priority, including repealing a decree that prohibited strikes and inviting the International Labor Organization (ILO) to help Liberia bring its laws and practices into conformity with its ILO obligations," it said.

Under the GSP program, textile and apparel products are ineligible for duty-free treatment.

The GSP program was created by the Trade Act of 1974 to promote economic development in developing nations.

Under the program, 137 beneficiary developing countries export approximately 3,450 different products duty-free to the United States.

Least-developed BDCs are eligible to export another 1,400 products duty-free.

As a result of the Bush administration's reinstatement of Liberia's GSP benefits, nearly one-quarter of Liberia's current non-rubber exports will now enter the United States duty-free.

Liberia's eligibility for the GSP benefits was suspended in 1990 to compel the then Liberian Government take measures to improve and promote the rights of workers.

The decision of the US government at this time is based on a careful assessment of President Ellen Johnson Sirleaf's priority to improve workers' rights, including the repeal of decrees that prohibit workers' strikes, and also her invitation to the International Labor Organization (ILO), to assist Liberia bring its labor laws and practices in conformity with ILO obligations.

Many say the restoration of Liberia's GSP benefits after 16 years of suspension indicates clearly that the Bush administration is keeping to its words to help Liberia get back to her feet.

According to them, the U.S. government pronouncement would fall in good and willing hands since it fits in with President Sirleaf's plan to expand the Liberian economy and create new jobs for Liberia's estimated 1.5 million under- and unemployed.

With the proper utilization of this tool, they say, the Sirleaf Administration in collaboration with the Liberia Business Association through the Liberianization Policy and Liberia's foreign 'partners in progress' will be able to achieve much.

"It is now left with the Liberian businesses to take advantage of the opportunity to work overtime to export 'made-in-Liberia' products in order to expand the private sector, set growth mechanisms to upgrade the economy, create new jobs, and provide new opportunities for the growth and development of Liberia," notes political commentator Moses J. King of ELWA.

But with clothing, textiles, and rubber, Liberia's single largest export product since 2002, exempted under the GSP program, analysts say, President Bush's so-called recovery tool for the Sirleaf Administration is a near farce.

Somewhat concurring with analyst's view, a former member of Liberia's transitional authority, Mrs. Weadé Kobbah-Wreh now a Liberian exporter, told The Analyst in a chat that applying the reinstated privilege to Liberia's advantage may be easier said than done.

"I don't know but I think the GSP is an extension of the Africa Growth and Opportunity Act (AGOA) signed between the United States and 48 developing countries in Africa. I do not know what is involved with the GSP, but if it is as I see it then it is not going to be a ready tool as some may think. Under AGOA, the importer is under obligation to export goods that meet U.S. Department of Commerce standards," she said.

According to her, the standards require the exporting country to put into place product inspection and verification mechanisms that meet US and international standards.

"Unless your country has an accredited and internationally recognized pre-export inspection and verification standards, goods exported to the U.S. is liable to be returned at the expense of the exporter," she said.

Incidentally, AGOA encourages increased trade and investment between the United States and sub-Saharan Africa through the reduction of tariff and non-tariff barriers and other obstacles.

Besides expanding United States assistance to sub-Saharan Africa's regional integration efforts, it focuses on countries committed to the rule of law, economic reform, and the eradication of poverty.

In order to qualify under AGOA, exporting countries must establish and make continual progress toward establishing a market-based economy that protects private property rights, incorporates an open rules-based trading system, and minimizes government interference in the economy through measures such as price controls, subsidies, and government ownership of economic assets.

"The rule of law, political pluralism, and the right to due process, a fair trial, and equal protection under the law; the elimination of barriers to United States trade and investment, including by the provision of national treatment and measures to create an environment conducive to domestic and foreign investment," AGOA states.

Further under AGOA, the exporting country must create economic policies to reduce poverty, increase the availability of health care and educational a system to combat corruption and bribery.

Most of all, according to the requirements of AGOA, the exporting country must not engage in gross violations of internationally recognized human rights or provide support for acts of international terrorism and cooperates in international efforts to eliminate human rights violations and terrorist activities.

It moreover must seek to strengthen and expand the private sector especially enterprises owned by women and small businesses, and facilitate the development of civil societies and political freedom.

If Mrs. Wreh is right in her impression that the GSP may be related to AGOA, according to analysts, then the suggestion that Liberia may be unable to transform the "tool" into a useful instrument for the reconstruction of Liberia that is now the priority of the Sirleaf administration.

The reason, they say, is Liberia's reconstruction is a political and security reality that needs ready cash from international partners pending the ability of the country to develop, streamline, and launch its economic recovery program.

"You certainly can't require a country like Liberia to meet all of these standards in order to compete in highly competitive developed world market with competitors holding unmatched advantages. This is what GSP requires unless I am proven wrong by further clarification," said produce exporter Emmanuel W. Vaney of Gardnersville.

Many think Vaney is right given existing realities in the trade market in Liberia.

According to them Liberia has not had and that in this situation made worst by 14 years of devastating civil war, does not have the facilities to meet the required trade standards as set by the U.S. Trade Department.

Currently, according to Mrs. Wreh, Liberia's pre-export and pre-marketing inspectors, BIVAC or Bureau Veritas has no facilities on the ground that could be certified under international trade standards.

What this means, observers say, is that Liberia is unlikely to benefit from the much-heralded gift intended for a desperate nation from Washington.

This, they contend, will be the case at least for the next several months, if it will ever be possible, that is.

Meanwhile newly appointed Labor Minister of Liberia, Samuel Kofi Woods has called on the Liberian Parliament to review all unjust laws that encourage the exploitation of workers.