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President Obama Launches Major African Trade Initiative
July 2, 2013

President Obama Launches Major African Trade Initiative

By Merle David Kellerhals Jr.
IIP Staff Writer
July 1, 2013

President Obama gestures while speaking at a July 1 business forum aimed at increasing investment in Africa in Dar es Salaam, Tanzania.

President Obama on July 1 launched a major trade partnership between the United States and sub-Saharan Africa aimed at expanding trade.

Obama told a meeting of 22 chief executive officers in Dar es Salaam, Tanzania, that “Trade Africa” is designed to expand trade and economic ties between Africa and the United States and global markets.

“Today, I’m announcing a new initiative — Trade Africa — to boost trade with and within Africa, starting with the East African Community,” Obama said at the business roundtable.

The initiative aims to facilitate trade by focusing on moving goods across borders faster and cheaper, he noted.

“We’ll work with the countries involved to modernize customs, move to single more efficient border crossings, reduce bottlenecks, reduce the roadblocks that stymie the flow of goods to market,” he said.

Obama told business leaders that the United States is setting specific goals for itself and East Africa that include moving goods faster between ports like Dar es Salaam and Mombasa to Burundi and Rwanda in the interior; reducing wait times for truckers at border crossings; increasing East African exports to the United States under the African Growth and Opportunity Act (AGOA) by 40 percent; and doubling trade within East Africa.

“Those are the goals we’re setting for ourselves under Trade Africa and here in East Africa,” the president said. “And we intend this to be the foundation for similar progress regionally that we can do across the continent in years to come.”

Trade Africa will initially focus on East African Community (EAC) members — Burundi, Kenya, Rwanda, Tanzania and Uganda. The United States expects to expand the trade initiative to other African economic communities and nations.

“The EAC is an economic success story, and represents a market with significant opportunity for U.S. exports and investment,” the White House said in a fact sheet.

The EAC countries, with a population of more than 130 million people, were selected because they have increasingly stable and pro-business regulations, according to the White House. The five nations have what the White House described as promising local enterprises that have formed creative partnerships with multinational corporations.

They were also selected for the first phase of Trade Africa, the White House says, because the EAC countries benefit from the emergence of an educated, globalized middle class.

“Intra-EAC trade has doubled in the past five years, and the region’s GDP [the broadest measure of a nation’s wealth] has risen to more than $80 billion — quadrupling in only 10 years,” the White House said.

U.S. Trade Representative Mike Froman told journalists at a briefing July 1 that the president has stressed throughout his African trip the importance of trade and investment as a crucial element in the U.S. development strategy with the region.

“There has been substantial progress over the last several years on the trade and investment front. Trade between the U.S. and sub-Saharan Africa is up about 2.5 times over the last decade,” Froman said. “We export about $22 billion of goods, and we import about $50 billion — mostly oil and minerals.”

Froman added that the non-oil trade of AGOA has tripled, but it’s still a small amount.

“As we’ve reached the period of time where we want to renew AGOA, we’re going to take a hard look at what has worked well, what hasn’t worked well, how to improve upon our experience with AGOA so that we can increase the non-oil-related trade between the U.S. and sub-Saharan Africa,” Froman said.

Froman acknowledged with reporters that the regional economic communities like EAC, the Southern African Development Community and the Economic Community of West African States, have made considerable progress in reducing trade barriers among themselves and are now working to link with other economic communities.

EAC has a customs union, which is an advanced form of trade cooperation with a common external tariff, he noted. It helps to foster greater trade integration, but more needs to be completed, he said.

The Obama administration has set increasing trade between the United States and the African continent as a significant focus of the August 9–13 AGOA Forum being held in Addis Ababa, Ethiopia.

The AGOA Forum will celebrate progress achieved through the U.S. trade act since it became law in 2000, and will serve as a means for its renewal by 2015.

Obama’s visit to Dar es Salaam is the final leg of a three-nation trip to Africa that has included stops in Senegal and South Africa.