Perhaps the first striking trade-related development between the United States of America (USA) and Africa since the conclusion of the U.S-Africa summit in August last year is the recent agreement between the former and five East African countries to ease trade flows and create the foundation and precedent for more investments from the world’s largest economy. Although, this understanding was reached with East Africa, there are indications that it could be extended to the rest of Africa.
As of now, the agreement commits Tanzania, Kenya, Uganda, Rwanda and Burundi to cooperate with the United States on customs issues, ease red tape at borders, reduce customs wait times and harmonize trade standards; all of these can be summarized with a familiar buzz word: trade liberalization.
Also, as part of the agreement, which has reportedly been in the pipeline since 2013, the United States will provide training on food safety, animal and plant health standards and international regulations.
Resonating with earlier sentiments that this deal is the first in a series of moves, U.S Trade Representative Michael Froman was briefly quoted as he commented on the development saying; “We see this agreement and all our work with East Africa to date as an important steppingstone, not the final destination.”
Reports indicate that trade in goods between the United States and the East African bloc grew by 52 percent to $2.8 billion in 2014; while exports were summed at $2 billion, imports totalled $743 million. These rising figures continue to set a business case for every effort aimed at boosting trade between the two regions.
A big issue of concern, and rightfully so, is the renewal of the African Growth and Opportunity Act (AGOA), an initiative that grants African countries duty-free access to U.S markets, which is scheduled to expire in the course of this year except it is renewed by the U.S congress. Reports also indicate that the White House has started mobilizing efforts in his direction. Of worthy note is the fact that all five East Africa countries captured in this trade agreement currently participate in the AGOA.
Time and again, speculations have arisen suggesting that the West has taken a significant interest in Africa because of China’s deepening and profitable relationship with the latter. As it were, this has fuelled a competitive scenario where the major players of the advanced world continue to court and chase after the jewels from the continent, the resultant economic effect has been a growth of the African economy by upwards of 6 percent in the past decade.
The East African region continues to set the pace for the rest of the continent by its commendable use of natural resources and its commitment to regional integration. With recent oil finds in Kenya and Uganda, the region, which currently exports more agricultural products and textiles than anything else, could become even more attractive.
By Emmanuel Iruobe