Another piece of American inanity

If you want to know why the U.S. economy is in trouble you need look no further than the latest exhibition of U.S. trade inanity recently on display in Zambia. U.S. Trade Reresentative Ron Kirk was in Lusaka earlier this week to participate in the African Growth and Opportunity Act (AGOA) Forum where he announced ...

SEYLLOU/AFP/Getty Images
SEYLLOU/AFP/Getty Images
SEYLLOU/AFP/Getty Images

If you want to know why the U.S. economy is in trouble you need look no further than the latest exhibition of U.S. trade inanity recently on display in Zambia.

U.S. Trade Reresentative Ron Kirk was in Lusaka earlier this week to participate in the African Growth and Opportunity Act (AGOA) Forum where he announced a new Obama administration initiative -- the African Competitiveness and Trade Expansion (ACTE) initiative. Under it, the United States will provide $120 million over four years "to help African nations realize AGOA's full potential" according to a statement by the office of the U.S. Trade Representative (USTR). Kirk also delivered a special greeting from President Obama highlighting AGOA's success in expanding exports from Africa to the United States.

AGOA allows duty-free access to the U.S. market for African exports covering 98 percent of the exports of the 37 eligible countries to the United States. In addition to the grant of $120 million, Kirk also announced that the administration will work with Congress to extend AGOA's Third Country Fabric Provision through 2015. Under this provision, AGOA member country textile exports made from fabric produced outside the AGOA countries (China for example) are permitted duty-free access to the U.S. market.

If you want to know why the U.S. economy is in trouble you need look no further than the latest exhibition of U.S. trade inanity recently on display in Zambia.

U.S. Trade Reresentative Ron Kirk was in Lusaka earlier this week to participate in the African Growth and Opportunity Act (AGOA) Forum where he announced a new Obama administration initiative — the African Competitiveness and Trade Expansion (ACTE) initiative. Under it, the United States will provide $120 million over four years "to help African nations realize AGOA’s full potential" according to a statement by the office of the U.S. Trade Representative (USTR). Kirk also delivered a special greeting from President Obama highlighting AGOA’s success in expanding exports from Africa to the United States.

AGOA allows duty-free access to the U.S. market for African exports covering 98 percent of the exports of the 37 eligible countries to the United States. In addition to the grant of $120 million, Kirk also announced that the administration will work with Congress to extend AGOA’s Third Country Fabric Provision through 2015. Under this provision, AGOA member country textile exports made from fabric produced outside the AGOA countries (China for example) are permitted duty-free access to the U.S. market.

No, I’m not kidding. Yes, despite the current intense pressure in Washington to reduce deficits and even to refuse to increase the national debt limit unless budget cuts are made and despite the rising U.S. trade deficit and the Administration’s high profile export initiative, the U.S. government is going to give 37 African countries $120 million to subsidize their exports to the United States so that our budget and trade deficits can get bigger.

On top of this, the Obama administration is going to fight to persuade Congress that China should be allowed avoid paying the normal tariffs on its exports of fabric to the United States by sending them first to be sewn into apparel in African countries who are members of AGOA. So Washington will, in effect, engage in more deficit spending in order to subsidize the duty free import of Chinese fabrics through African countries thereby increasing the U.S. trade deficit but without any apparent increase in the bi-lateral U.S.-China trade deficit.

Oh, yes, I forgot. The sale of Chinese fabrics to the United States through African countries will help China finance its further acquisition of African mineral and oil resources.

Truly, "those whom the Gods would destroy they first make mad."

Clyde Prestowitz is the founder and president of the Economic Strategy Institute, a former counselor to the secretary of commerce in the Reagan administration, and the author of The World Turned Upside Down: America, China, and the Struggle for Global Leadership. Twitter: @clydeprestowitz

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