U.S. Eyes Next Step in Africa Trade Relations, Froman Says

  • Sub-Saharan Africa accounts for just 1% of U.S. trade
  • U.S. has ‘open mind’ toward new trade accords with Africa

The year after President Barack Obama extended African nations’ preferential access to U.S. markets by a decade, his administration is re-evaluating its trade relations with the world’s poorest continent.

“It’s time to start looking at what comes next,” U.S. Trade Representative Michael Froman said in an interview in Kigali, Rwanda’s capital, where the World Economic Forum is holding its annual Africa summit. “Part of what motivates us is that we are hearing from Africans that they want to move towards a more permanent, reciprocal kind of relationship.”

Under the African Growth and Opportunity Act, or AGOA, which was first adopted in 2000, the U.S. eliminated import levies on more than 7,000 products from Africa, ranging from textiles to manufactured items. The accord was renewed in June for 10 years, benefiting 39 nations.

Trade relations need to evolve because African economies have become more integrated and changed considerably in terms of their demographic make-up, growth, levels of development and the spread of technology since AGOA came into effect initially, Froman said. The U.S. is consulting with African officials, business leaders and regional experts on what should happen next.

“Even though AGOA itself doesn’t expire for 10 years, these kinds of agreements or relationships take awhile to negotiate and implement,” Froman said. “We don’t want countries to be left in the lurch by suddenly losing preferences and not having put in place the necessary ongoing relationships.”

Choices Available

Options include concluding bilateral treaties or full free-trade agreements.

“We come into this very much with an open mind,” Froman said. “Some countries may be both willing and able to move faster than others. There may not be a single approach for every country and every region. ”

Sub-Saharan Africa accounted for just 1 percent of U.S. trade last year, with the region still constrained by power shortages and poor transport infrastructure.

“We have to work on the structural issues,” Froman said. “Whatever we do, we want to do it in a way that ideally supports the policy priorities in Africa,” including regional integration and local manufacturing.

Even so, the U.S. wants any new trade accords with Africa to be mutually beneficial. 

“We don’t want a situation where American firms are disadvantaged, with the U.S. just providing unilateral access to our markets while Africa is providing preferential access to products from other industrialized countries,” Froman said.

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