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U.S. Seeks Seamless Renewal of African Trade Agreement
August 7, 2013

By Kathryn McConnell
IIP Staff Writer
August 6, 2013

The United States wants a “seamless” renewal of the African Growth and Opportunity Act (AGOA), the U.S. law that offers trade incentives to African countries that open their economies.

U.S. Trade Representative Michael Froman said the United States is beginning its review of the current agreement, which expires in 2015, by looking at its successes. He said that in AGOA’s 13 years, two-way trade has more than doubled, U.S. exports to Africa have tripled, African oil exports to the United States have tripled and an estimated 43 million jobs in Africa have been created.

“By all those metrics, it is a significant success,” Froman said August 5 in a briefing at the Brookings Institution, a Washington-based policy research center. He stressed that the United States wants “to take the relationship even further” by helping Africa realize more of its economic and trade potential.

That’s a message that Froman will take to the 12th AGOA Forum August 12–13 in Addis Ababa, Ethiopia. Currently 39 sub-Saharan African nations participate in the trade program.

The negotiator said that since AGOA was signed into law in May 2000, much in Africa has changed. Economists, he said, now say that sub-Saharan Africa, home to six of the top 10 fastest growing economies in the world, “is rising.”

Froman also cited a “whole new cadre of leaders” in many of the region’s countries who are willing to put their political will behind economic reform; devote some of their resources to support food security, education and health; and build systems so they no longer depend on continual humanitarian assistance.

He said that while accompanying President Obama during his recent trip to sub-Saharan Africa, at every stop, the underlying themes were trade and investment.

“This is not just about aid anymore,” he said,” it’s also about trade; not just about assistance but about investment, whether it’s the private sector or government officials or young leaders.”

Clockwise from top left are selections from the national flags of Cape Verde, Malawi, Senegal and Sierra Leone — all African countries seeking business investments.

Froman added that through AGOA, the United States wants to build on its recent work with Africa, beginning with President Obama spearheading an effort in 2009 to get the Group of Eight (G8) leading industrialized nations to commit more than $22 billion to support country-led plans for agricultural development, with a focus on smallholder farmers. The following year, Obama established Feed the Future, the U.S. government’s global hunger and food security initiative. And in 2012, Obama, with G8 leaders and leaders of African nations and the private sector, launched the New Alliance for Food Security and Nutrition. Also during this period, the United States supported significant advances toward achieving an AIDS-free generation, he said.To build on AGOA’s successes, the United States wants to help the agreement’s 39 member countries create economic environments for private investment. Private-sector-led growth, Froman said, will help Africa connect with major markets in Africa and with markets around the world.

“We want to encourage good governance as a key part of a sustainable economic agenda,” he said.

The United States also wants to be involved in Africa in other ways that may be discussed in Addis Ababa, he said. He pointed to Power Africa, which Obama launched in June with aims to double the number of Africans who have reliable and affordable access to electricity by helping partner governments mobilize private-sector investment and make the necessary laws and regulations to bring electricity to people. Energy is “an important force multiplier” for education, health, safety and economic growth, Froman said.

In July, the Obama administration also launched Trade Africa, which focuses on regional integration of customs systems.

According to a report from Brookings and the United Nations Economic Commission for Africa, topics that may be considered at the forum include country and product eligibility for favored trade treatment.

“This is the kind of analysis report we want to see,” Froman said.

The Brookings-UNECA report is available on the Brookings website.