Building capacity to help Africa trade better

As US, China fight for Africa, Trump increases AGOA Fund to $21.8bn


As US, China fight for Africa, Trump increases AGOA Fund to $21.8bn

As US, China fight for Africa, Trump increases AGOA Fund to $21.8bn
Photo credit: Ripples Nigeria

Nigeria and other sub-Saharan countries will now tap more from free trade agreement under the African Growth and Opportunity Act (AGOA), as President Donald Trump has approved doubling the fund from $10.96 billion to $21.8bn

Nigeria and other sub-Saharan countries will now tap more from free trade agreement under the U.S. trade agreement.

According to a U.S. Commerce Department data official, Richard Edwards, who spoke at an event in Togo on Tuesday, the renewed presence of China in Africa is part of what has prompted the Trump administration to increase its trade agreement with West African nations under AGOA.

The government policy, aimed at reviewing the Clinton-era free trade pact with sub-Saharan Africa, is seen as the administration’s new focus, going by feelers from the first high-level delegation to visit the region last week, since Trump came into office.

Reports say China’s growing role in African trade and influence is also seen as a competition between Beijing and Washington.

Its finances and massive infrastructure projects in the sub-Saharan region has seen China, through its new Asian Infrastructure and Investment Bank, spend about $102 billion in exports to the region between 2015 and 2016.

The U.S. Trade Representative for Africa, Robert Lighthizer, was quoted as saying there is a desire to change the trade agreement before it expires in 2025.

Lighthizer stressed that the efforts of the administration at deepening its trade relationship with Africa, will also encourage African countries to “engage in fair trade, eliminate barriers to U.S. exports and abide by the eligibility criteria of the AGOA programme.”

The U.S. trade deficit with the 38 AGOA countries shrank to about $7.9 billion last year from a peak of $64 billion in 2008, as U.S. shale oil production increases have lessened the need for oil imports from major exporters Nigeria and Angola.

Another senior official, Constance Hamilton, deputy assistant U.S. Trade Representative for Africa admitted that the 17 year-old AGOA had been barely mentioned by any Trump’s administration official, while moves toward an early renewal or extension will be expected soon.

Scott Eisner, president of the U.S. Chamber of Commerce’s U.S.-Africa Business Center, said African countries should look at reforms to attract more foreign investment.

AGOA, in its current form, will likely become irrelevant for a number of markets by 2025, he said.

“Those governments that want to continue to count on the U.S. market need to be prepared to come to the table to have bi-lateral or regional trade talks – whether they are called a free trade agreement or something different,” Eisner said.

In his comments, Peter Barlerin, a senior State Department official, said African nations need to start thinking about what comes after AGOA, adding: “We’re not going to see AGOA stretching out to infinity.

“Eventually, we will move into some other kind of arrangement, and that could include bilateral or larger free trade agreements with parts of Africa,” he said.

Opening Statement of USTR Robert Lighthizer at 2017 AGOA Forum

Good morning, Your Excellency, Prime Minister Komi Klassou; Trade Minister Legzim-Balouki; esteemed members of the Togolese Government; ministers and heads of delegations from the AGOA partner countries; and distinguished delegates and guests.

I am honored to be here, and I join on behalf of President Trump and our Government in welcoming all of you to the 16th annual AGOA Forum.

Before I begin, I would like to especially thank President Gnassingbé for hosting this year’s AGOA Forum in your capital city. Thank you for your hospitality and the warm welcome we have received. Togo is positioning itself as a transportation hub and logistics center, so it has a clear appreciation of the benefits of trade.

I am pleased that the theme of this year’s Forum is “The United States and Africa: Partnering for Prosperity through Trade.” 

The United States is committed to Africa. We see great potential to grow and deepen our trade relationship, with the goal of establishing a true partnership for the future. By lowering barriers and tackling other constraints that impede trade and investment, we are poised to see U.S.-Africa trade flourish. To realize these gains, however, much more work needs to be done, as we will discuss during this important AGOA Forum.

The U.S. Government has enjoyed a bipartisan consensus for the past 16 years on its trade policy towards Africa, with AGOA providing a framework for our economic engagement. 

The Africa of today is not the Africa of 17 years ago. We live in a changing world and much has changed in Africa over this period. For instance, the United States is importing over one billion dollars in luxury automobiles from Sub-Saharan Africa annually. Meanwhile, some AGOA partners are implementing reciprocal trade agreements with major developed economies that compete with the United States. So let us focus on ways we can achieve deeper commercial engagement now while working towards greater reciprocity in the future to ensure that sustained political support for our trade relationship goes forward.

I look forward to discussing these issues and opportunities further in this meeting. Together, we can create a better business environment and chart a path toward a stronger and more sustainable trade relationship for the future. 

Finally, I would like to take a brief moment to announce an example of an AGOA beneficiary country working hard to succeed with an export strategy. I have just signed a letter approving an AGOA textile and apparel visa for Togo. This important step will permit Togolese entrepreneurs to take advantage of the many textile and apparel benefits available under the AGOA program. And we wish them all the best in this endeavor.

We look forward to continuing to develop our trade relationship throughout the region. I thank you very much for this opportunity to be here and to represent my Government.


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