4. U.S.- Africa Trade Relations

Dear Readers,

2022 is finally ending, and it is also Christmas. And before we take that well deserved end of year break, let’s talk trade in the context of US- Africa relations and the just concluded U.S – Africa Leaders Summit.

Between 13th and ?15th ?December,2022, President Biden hosted ?Delegations from all 49 invited African countries and the African Union, alongside members of civil society and the private sector?during the U.S.-Africa Leaders Summit, the first one under his administration, and only the second one in eight years. Expectedly, many issues had been discussed in the period leading to the Summit, and debate has emerged from the summit itself especially in terms of whether the outcomes will address Africa’s challenges which include inadequate infrastructure, debt servicing, devastating effects of climate change, and trade imbalances. So, this edition gives an overview of ?the discussions at the Summit.

The US- Africa Agenda, and?History

Initiated in 2014 and first hosted by President Obama in Washington, DC on August 5 and 6, 2014 , ?the summit primarily focused on trade, investment, and security of the continent. As?there had been an eight-years hiatus before the latest summit, the agenda (which obviously came from the US) could be easily discerned from the USA’s Strategy toward Sub-Saharan Africa, published earlier in August 2022 and which has four key strategic objectives;1) Foster Openness and Open Societies 2)Deliver Democratic and Security Dividends 3)Advance Pandemic Recovery and 4)Economic Opportunity Support Conservation, Climate Adaptation, and Just Energy Transition.

The Expectations, and Some Critical Perspectives

US- Africa trade relation fragmented at many levels. One of the mechanisms U.S has deployed over the years is the??Africa Growth Opportunity Act (AGOA), a waiver scheme. The US has granted the AGOA eligible countries in from Africa duty free quota free access to the US market especially for apparel products. However, the scheme being unilateral has seen some countries being dropped from the scheme thus in a way undermining its ability to create meaningful trade relation between African countries using it and the US.

There had been important suggestions coming experts in Africa before the summit. First, On regional integration, James Gathii, a leading International Economic Law scholar?called ?for African countries to ?approach trade issues at the summit as a bloc, and ?to defend the AfCFTA by making?it clear to the United States that the regional integration agenda is a long overdue and important agenda for self-sustaining growth and development on the continent.

Second, on trade, a Policy Brief by ?Development Reimagined had recommended that the Summit should ensure AGOA is in line with AfCFTA (e.g. coverage of the entire continent not just a few LDCs), as well as the Boosting Intra-African Trade (BIAT) framework, the Comprehensive African Agricultural Development Programme (CAADP), the Accelerated Industrial Development for Africa (AIDA), and the African Mining Vision (AMV).

?In terms of policy, there is yet to be alignment US’s policy with respect to the changes in Africa in recent decades. Indeed, research??has shown that, even as the continent becomes increasingly urban, US policy has not followed suit. For instance, more than 30 African cities are projected to exceed 5 million inhabitants by 2050, yet?US policy in Africa remains overwhelmingly focused on rural development. As the above shows, the lenses through which the Summit’s outcomes were to be assessed has already been well documented.

But what are the Highlights of the Leaders’ Summit?

The first day of the Summit focused on vital role of civil society and the strength of our African diaspora communities in the United States and include trade aspects. Here, discussions centred on ‘modernizing the United States’ partnership and engagement with Sub-Saharan Africa to strengthen trade and investment relations and implement the African Growth and Opportunity Act (AGOA)’.

The second day focused on increasing two-way trade and investment under the auspices of the U.S.-Africa Business Forum. This perhaps was the most important part of the Summit as issues that are critical for Africa’s trade and integration agenda seems to have been discussed- the?Future of U.S.-Africa Trade & Investment Relations, Partnerships to Finance African Infrastructure and the Energy Transition, Partnerships to Strengthen Food Security and Value Chain, and ?Partnerships to Enable Inclusive Growth Through Technology. This digest shall be looking at the implication’s aspects separately in future editions. In the meantime it is worth noting that these discussions culminated in signing of the MOU on Cooperation for Trade and Investment between the ?AfCFTA Secretariat ?and the US Government which, among other things , aims at ‘boosting competitiveness and attracting investment to the African continent’ and ‘promoting sustainable trade and economic integration in Africa and between the Participants to the benefit of U.S. and African workers and businesses’. Again, an analysis of the??effectiveness of this MOU, given the fragmented nature of USA’S trade relations in Africa should be an interesting read!

The third and final day covered high-level discussions around ?Partnering on the African Union’s Agenda?2063 and included a promise by the President Biden to ask Congress for the authority to lend $21 billion to the International Monetary Fund to provide access to necessary financing for low- and middle-income countries. On this last day, There was also as discussion, on food security and food systems?resilience where again ?there was?another announcement on aid- $2 billion in humanitarian assistance to address?acute food insecurity in Africa. This is not by any means an exhaustive presentation of everything transpired in the Summit, but it does give a pretty decent overview of the Summit’s ?proceedings.

So, What Next for U.S Africa Relations?

Just what does the above mean, going forwards for Africa? Does it mean for instance, on trade, that the US has now abandoned its bilateral FTA approach it had begun on the [African] continent, and will now support Africa’s integration through the AfCFTA? Will the US be more active in financing Africa’s cross- border infrastructure? and will there be willingness by the US to address market access and supply side challenges that have hampered AGOA’s effectiveness?

Well, there are certainly tough questions that need deeper analysis. But there are already views expressed on some of them, Post the Summit. For instance, statements by the U.S. Trade Representative?Katherine Tai?that her agency will help Africa modify Intellectual Property (IP) waiver regulations at the WTO and assist the continent to produce its own vaccines have been lauded as?positive examples for other G-7 members to follow. Let’s for more discourses on trade law and policy issues that are of interest to Africa, and the Caribbean in 2023! And thank you for your subscriptions and readership!

Happy Holidays, and Stay Safe

Patrick Anam