Declining Chinese Imports, Strong Relationships Could Widen Africa Market for U.S. Exports, Says Froman
Strengthening trade and investment relationships between the U.S. and Africa should translate to a growing market for U.S. exports, U.S. Trade Representative Michael Froman told the International Trade Commission on Jan. 28, during an ITC hearing focusing on the African Growth and Opportunity Act (AGOA) and other potential growth initiatives for the continent, according to prepared remarks (here). With Chinese imports from Africa dropping by 50 percent, from $110 billion in 2014 to $50 billion in 2015, growth in Africa will depend more on new sources of demand in agricultural and manufacturing trade, internal integration, and in “capitalizing on the continent’s boom in Internet access and mobile use,” Froman stated.
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Congress extended AGOA in June (see 1506290045), but Froman raised the question of whether the U.S. should develop new trade policies for Africa, including reciprocal free trade agreements. He said that the Office of the U.S. Trade Representative will deliver to Congress in June a report laying out options and roadmaps for pushing forward the U.S.-Africa trade and investment agenda, and noted that tariff preferences—such as those provided through AGOA—alone sometimes do not generate significant new trade.
Trade capacity building, infrastructure investment, and technical assistance could also help the U.S. trading relationship with the continent, U.S. Chamber of Commerce Vice President for Africa Scott Eisner told the ITC in submitted testimony. Eisner said Africa would benefit from bilateral and regional trade agreements entered into with the U.S., including agreements with regional economic communities such as the Economic Community of West African States and the East Africa Community. "These regional agreements would not only further opportunities for trade and investment but they would also support the efforts of intra-Africa trade through regional integration," Eisner stated. "U.S.-African regional trade agreements should also support countries in their work to harmonize regulatory environments and technical standards."