As the day is turning into night in Ethiopia, the international crisis negotiators have been trying to stop the possibility of a full-blown civil conflict. The top diplomat in America, Secretary of State Antony J. Blinken, is located in Kenya seeking to resolve the dispute.
America employed various pressure strategies to bring the outbreak to a conclusion, but none has worked to date. The latest method is to offer Ethiopia 60 days notice of its withdrawal from the African Growth and Opportunity Act (AGOA) However, the plan to implement the “AGOA-EXIT” strategy has met with some resistance since a large part of Ethiopia’s growth in GDP relies on around the success of AGOA however, a withdrawal from the program may make the situation more difficult for Ethiopia as well as for other sub-Saharan countries. In addition, there are a lot of American retail businesses involved in production in Ethiopia and only having a few months to shut down production is insufficient time.
The sudden “AGOA-EXIT” plan opposes USA brands and retailers that have made investments in Africa. This unusual move is also a way of presenting America as an unreliable partner in a geographical zone that everyone was aware of (going into) was a risky one. When the conflict is finally settled (and the time will come), the loss of AGOA will mean thousands of Ethiopians are out of work, and goods intended for the USA retail market are transferred to more stable areas with a massive cost for investors, causing price increases back to America.
President Biden is now being portrayed as the person who is sending his trade messages from the past to China and Africa. Biden’s Biden team could not lift Trump’s soaring tax on retail sales in China and the process. They accidentally blocked China exit doors since retailers are looking for alternative places to source their goods. They have fewer and fewer options. Since Ethiopia is now offline, it is clear that the chances for sourcing are being removed faster than they are being added.
For the past year, terror has ruled throughout the north Tigray area of Ethiopia as the Tigray People’s Liberation Force (TPLF) is moving slowly to the capital of Addis Ababa. One possibility is a full-on civil war. The other possibility is to shut down the capital city and overthrow the government headed by Prime Abiy Ahmed. Abiy Ahmed.
Although only 6 percent of the total population is Tigray, the Tigray group controlled Ethiopia’s political affairs for more than 25 years until Prime Minister Abiy was elected in 2018 through an alliance government. Since that time, with aid from American as well as Chinese investments, Ethiopian GDP has been increasing at a rapid pace. It is now the second-largest country in Africa is relatively stable. However, there was a time when the Tigray group was exiled from being a part of the government, and armed conflict started within the northern region. The forces from neighboring Eritrea also joined the government against Tigray fighting, and the conflict escalated. Humanitarian aid for Tigray has been halted as well as allegations of atrocities and famine within the area.
Alternatives to U.S. Government to resolve the issue have been limited. However, the measures implemented over the past year have not been successful. The Tigray group claims they do not plan to conquer Addis Abba, but they continue to move towards the city. The accusations of human rights violations have also been rampant, and reports indicate that thousands of people have been assassinated, and 2 million people have been forced to flee. In response, the U.N. Commissioner for Human Rights as well as Ethiopian Human Rights Commission released the following statement: “there are reasonable grounds to consider that all parties to conflicts in Tigray have, in varying extents, violated human rights internationally, as well as refugees and humanitarian law, and some of them could be attributed to war crimes or violations of human rights.”
November day The United States Trade Representative announced the 60-day “AGOA-EXIT” warning for Ethiopia; however, some believe it was a mistake and unhelpful for Ethiopia or Africa. In the end, however, the U.S. State Department then recommended that U.S. citizens should quickly quit the country.
While the USA shouldn’t extend its rights to any country that does not perform well in any trade agreement, the Ethiopian issue must be understood with the overall picture. The practice has become U.S Government practice to suggest that executives from sourcing and retail operations in emerging countries through the years. The concept is that offering basic jobs and education will help stabilize the people living there. It is a method that has been successful since the federal government provides the benefit of a duty-free atmosphere. The issue lies in the fact it appears that it appears that the U.S. government is not backing its “ask” and is not doing enough to ensure the investment that businesses make for their benefit. In this instance, it’s more reasonable to provide an extension of time to companies (so they can consider their options about the loss of AGOA) or offer exemptions to industries such as clothing and footwear, which provide substantial local employment.
The alleged loss of “protection” for investments can break up the public-private partnership that has been in place for many years. Utilizing an agreement on trade (like AGOA) as a political tool for negotiating does not align with the Ethiopian operator of a sewing machine who is just one year into their very first job. Workers shouldn’t be held accountable for human rights violations in their own country when it’s somebody else who is abusing power.
Numerous industrial parks were constructed in Ethiopia as well as thousands of Ethiopians were employed. The apparel industry experts are typically sent in those in the United States under the AGOA framework. When Team Biden starts to peel away the AGOA benefit, it slaps the investors and the employees. It causes an additional layer of turmoil to a nation that is already struggling. It wouldn’t be a unique event If this were only happening in Ethiopia; however, the eyes of a lonely person are also turning towards Guinea, Mali, Myanmar, and Cambodia, and Nicaragua, where threats similar to those to U.S. trade benefits exist.
The turbulence in the world brings trade experts who want to know whether it is the U.S. Government that is working to benefit or hurt investors by cutting trade benefits when times get tough. It seems that Uncle Sam might not be on their side and, with only just four years left in on the AGOA’s current AGOA term, it appears that the Trumpian idea of the individual “bi-lateral” bilateral trade agreements with other countries will prevail, even though the AGOA people are discussing bilateral or unilateral trade agreements to prevent the deal from fading away.
AGOA is a noble trade policy, but it has not grown, and the numbers speak for the fact. AGOA was created in 2000, and during the first year, they accounted for $23.5 million in trade with the USA. In the present, we are twenty-one years, and the figure is around the same. The difficulty in understanding AGOA lies in the fact that African exports generally depend on gas and oil. The only positive aspect lately is that the assembly industry in Ethiopia is gaining growth, and they employ many people. President Biden has expressed a desire to revive the previous President Trump’s “Prosper Africa” initiative, which is a bi-lateral concept that includes health, energy, agribusiness, and transportation.
Thirty-nine countries currently participate in AGOA (before Ethiopia, Guinea, and Mali). In the annual reviews of their lands, the reason to justify the Ethiopian rest was due to “gross infractions of international acknowledged Human Rights.” In the case of Guinea and Mali, the suspension came in response to military coups in both of these countries.
To put it all in some perspective, It is important to remember that in 2019 Ethiopian Premier Abiy was awarded the Nobel Peace Prize for establishing peace with Ethiopia’s northern neighbor Eritrea. The Eritreans, as well as Ethiopian government forces, have been advancing. Ethiopian government forces are close to the Tigrayan population, and they are battling the Tigray Peoples Liberation Army has begun to gain some ground in the war. It is heading to the capital of Addis Ababa. It’s odd to make peace agreements with a foreign country and then use that country to align with the territory of your country. Interestingly, Mr. Abiy declared a six-month state of emergency in Ethiopia and urged everyone to protect Ethiopia’s national country. This Nobel prize winner that: “We will bury the enemy with bones and blood, and raise Ethiopia’s glory Ethiopia to shine again.”
For his part, President Biden is adhering to the “diplomacy initial” strategy in Ethiopia; however, the situation in Ethiopia is getting worse by the minute. There is hope for a peaceful solution; however, removing the AGOA trade benefits isn’t going to win the day. It also hurts the larger image and the actual significance of American’s AGOA commitment to Africa.