African countries’ trading partners – old friends, new friends and close friends
Sean Woolfrey, tralac Researcher, discusses the AGOA Forum, SADC Summit, and BRICS Business Council meeting
Over the past two weeks, the African continent has played host to three high-profile gatherings relevant to the trade and broader economic prospects, policies and strategies of countries in the region. From the 9th to the 13th of August, the Ethiopian capital Addis Ababa hosted the 2013 AGOA (African Growth and Opportunity Act) Forum, which brought together stakeholders and senior government officials from the United States (US) and 39 African countries participating in the AGOA programme of trade preferences. Over the past weekend (17 and 18 August), leaders from member states of the Southern African Development Community (SADC) attended the 33rd Summit of SADC Heads of State and Government in Lilongwe, Malawi. Finally, the inaugural meeting of the BRICS (Brazil, Russia, India, China and South Africa) Business Council took place in Johannesburg on the 19th and 20th of August.
Judged on the content of their deliberations and declarations, the exact level of significance to be attached to each of these gatherings – at least from the point of trade and economic governance – is not that obvious. The AGOA Forum was notable chiefly for the suggestion from the representatives of the US that despite being broadly supportive of a renewal of AGOA, they are likely to push for some level of reciprocity as well as the possibility of graduating certain products, sectors or even countries out of the programme. The SADC Summit, meanwhile, appears to have focused largely on political, peace and security matters, including the recent elections in Zimbabwe, although the Summit did reiterate its commitment to the establishment of the Tripartite Free Trade Area. Given that it was the first such gathering, the meeting of the BRICS Business Council unsurprisingly focused on identifying areas of potential cooperation, including the promotion of public-private partnerships, information exchange and harmonization of technical standards.
Viewed in a more general sense, however, these three gatherings appear to represent three separate approaches currently being adopted by many African countries towards trade and foreign economic policy in general – approaches that differ depending on whether they involve relations with ‘old friends’, ‘new friends’ or ‘close friends’. AGOA relations belong quite firmly to the first approach, which involves trade and economic relations with ‘traditional’ and ‘established’ partners in the global North, such as the US and the European Union (old friends). The second approach involves new and evolving trade and commercial ties to emerging powers of the global South, such as Brazil, China and India (new friends), all of whom belong to the BRICS. The third approach, meanwhile, involves efforts to forge closer economic ties between African countries (close friends), such as the numerous, and in some cases overlapping, regional integration initiatives currently underway across the African continent – of which the SADC Free Trade Area is one – and various other efforts to foster enhanced trade and commercial linkages.
As evidenced by the unsurprising displeasure of African representatives towards US suggestions that reciprocity and graduation be incorporated into AGOA in the future, as well as the difficult Economic Partnership Agreement (EPA) negotiations between African countries and the European Union (EU), the old friends approach is often characterized by explicit disagreement at the political level. Notable aspects of the old friend approach are the overly-heightened defensiveness that African governments often display towards the industrialised world – arguably borne of historical exploitation – and an implicit belief that the developed world owes Africa and thus should not expect significant levels of reciprocation in deals involving African and developed countries. Nevertheless, despite the fractiousness often involved in political engagement between African countries and their old friends, African private sector actors are heavily engaged in economic activity with these old friends, and actual commercial ties between the two sets of countries remain vitally important for the majority of African economies.
By contrast, the new friend approach appears to be marked by a high level of political goodwill, and gatherings between African countries and their new friends tend to involve attempts to identify areas of cooperation where the potential for political disagreement is low. This was the case at the BRICS Business Council meeting, where representatives from a number of African countries were present and where ‘areas for cooperation’ was a central theme of the agenda. In recent years there has been a noticeable sense of optimism in many African countries surrounding the possibilities inherent in closer ties with these new friends, although it is possible that in some places such attitudes may be hardening. Encouragingly, the new friend approach also appears to be imbued with the realization that private sector actors are the key to enhanced commercial ties between African countries and their new friends.
The close friend approach is best exemplified by the regional integration initiatives underway across the African continent. Whether at the level of regional economic communities – such as SADC, the Common Market for Eastern and Southern Africa (COMESA) or the East African Community (EAC) – or at the broader level of the COMESA-EAC-SADC Tripartite Free Trade Area, these initiatives have tended to involve ‘top-down’ processes driven by copious engagement between leaders and senior government representatives of the African countries involved and the adoption of countless programmes, protocols and plans of action. However, despite the grandiose rhetoric involved and a general consensus that enhanced intra-African trade and investment would be beneficial for the region, for many African countries, trade and other commercial ties to neighbouring countries remain much less important than those to old and new friends outside the continent.
The old friend-new friend-close friend strategy described above is of course something of a caricature, and it undoubtedly applies to some African countries more than others. Nevertheless, like all caricatures, it highlights very real features of African countries’ approaches to trade and investment relations with other countries in recent years. Whether or not African countries are adopting these stances intentionally, the approaches themselves should be investigated in order to determine whether or not they are appropriate for supporting and promoting economic growth and sustainable development in the region.
For instance, it is debatable whether the defensiveness inherent in the old friend approach always furthers the interests of African countries, especially as it often serves to complicate attempts to engage constructively with important commercial partners and to seek ways to develop existing relations with these partners in ways that promote sustainable growth and development in Africa. On the other hand, while positive attitudes and political goodwill may have contributed to growing economic ties between African countries and their new friends, it is unlikely that these factors are the fundamental drivers of these new friends’ interests in Africa. Indeed it is quite possible that these interests are, at their core, very similar to the historical interest in the continent of Africa’s old friends. In other words, African countries should be wary of being too defensive when engaging with old friends, but should also be cautious not to simply assume that the intentions of new friends are always inherently more benevolent towards African economies than those of old friends.
Finally, with regard to regional integration and other elements of the close friend approach, it is becoming increasingly apparent that unless African governments move beyond political engagement and grandiose rhetoric and actually address i) the lack of implementation of many of the instruments of integration that have been concluded in the region and ii) the numerous supply-side constraints that impede economic development in the region, the much anticipated benefits of regional integration are unlikely to materialize. Furthermore, policymakers involved in the integration initiatives underway in the region need to be braver in addressing some of the more sensitive political issues involved in these processes – including questions surrounding preferential rules of origin, market access commitments on sensitive products, and the possibilities of moving beyond a narrow trade in goods agenda – and should not simply look for the most politically expedient approach to dealing with these issues.
Naumann, E. 2013. AGOA Forum concludes in Addis Ababa, amid growing uncertainty around its long-term future. Accessed online at: http://www.tralac.org/discussions/article/5332-agoa-forum-concludes-in-addis-ababa-amid-growing-uncertainty-around-its-long-term-future.html
The Presidency of the Republic of South Africa. 2013. Communiqué of the 33rd Summit of SADC Heads Of State and Government Lilongwe, Malawi: August 17-18, 2013. Available at: https://www.tralac.org/documents/news/2091-33rd-sadc-summit-communique-18-august-2013.html
South African Government Information. 2013. Joint statement of the BRICS Business Council Meeting held in Sandton Convention Centre, Johannesburg, South Africa. Available at: http://www.gov.za/joint-statement-brics-business-council-meeting-held-sandton-convention-centre-johannesburg-south
tralac. 2013. The Review of the SADC RISDP Matters. tralac Policy Brief. Available at: https://www.tralac.org/documents/publications/trade-briefs/tb-archive/324-tralac-policy-brief-final-risdp-review-20130814.html