US explores how to keep up in trade with Africa
The United States will review its key trade legislation with African nations in order to grasp growing opportunities on the African continent while trying to keep pace with competing emerging nations such as China, Brazil and India.
US Trade Representative Michael Froman said on Monday that the US government wants to see the “seamless renewal of AGOA”, which refers to the African Growth and Opportunity Act, which offers trade incentives with the US to African nations to open their economies. Signed into law in May 2000, AGOA is set to expire in September 2015.
Froman said the US wants to use the next two years to look at the act’s successes and ways in which it can be improved.
He said the US will “also look at the changing economic and trade relationships that have developed between Africa and other economic partners around the world”. Speaking at the Brookings Institution, Froman said he will attend the 2013 AGOA Forum in Addis Ababa, Ethiopia, later this week. The theme of this year’s forum is “Sustainable Transformation through Trade and Technology”.
Total African exports under AGOA have tripled. In 2012, the 39 eligible countries exported nearly $ 35 billion of products to the US under AGOA and its related general system of preference provisions. However, oil products still accounted for 84 percent of AGOA exports to the US in 2012.
At the moment, thousands of products on the AGOA list are allowed into the US without duty.
Calling AGOA a “significant success”, Froman admitted the numbers are still small.
China eclipsed the US as Africa’s largest trading partner in 2009. The trend has continued with bilateral trade exceeding $ 200 billion last year, registering an average annual growth of 30 percent in the past decade. This compares to $109 billion of total US trade with Africa in 2012.
Froman reiterated what US President Barack Obama said during his trip to Africa in June — that it is good that China, Brazil, Turkey and other countries are interested and involved in Africa. “The question for Africans is, What kind of trade and investment relationship do they want to have?” Froman said, emphasizing that US companies have been hiring locally and building local capacity.
However, in contrast to the stereotyped depiction in Western media, statistics show that about 85 percent of employees in the more than 2,000 Chinese companies operating in Africa are Africans.
AGOA, similar to other US trade policies, excludes countries that Washington considers to be performing poorly in democratic and human rights reforms, regardless of how desperate a nation is for development opportunities.
China has long practiced a policy of noninterference in the domestic affairs of other nations, and its loans to African nations come with no strings attached, unlike aid from the US and other Western nations.
He Wenping, an expert on African studies at the Chinese Academy of Social Sciences, said China’s Africa policy is “non-ideological” and emphasizes “noninterference in internal affairs and respect for the choices African nations make for their own development path”.
She said China places emphasis on how to help Africans build capacity by “teaching them how to fish instead of giving them fish”, quoting an old Chinese proverb.