Building capacity to help Africa trade better

American Society of International Law: Symposium on Africa and the Future of International Trade Regimes


American Society of International Law: Symposium on Africa and the Future of International Trade Regimes

American Society of International Law: Symposium on Africa and the Future of International Trade Regimes
Photo credit: AZRainman | Flickr

On September 30, 2025, the World Trade Organization (WTO) waiver that allows the United States to extend trade preferences to African countries under the African Growth and Opportunity Act (AGOA) will come to an end. This symposium examines the possible future directions of U.S.-Africa trade relations in the post-2025 period.

The four contributions to this symposium address a range of issues, including: What strategies should African countries pursue between now and 2025 to fully utilize the market access opportunities under AGOA? What challenges lie ahead for a post-2025 U.S.-Africa trading relationship that may not be anchored on preferential trading access to the United States for African countries? Would a reciprocal trading relationship between the United States and African countries be ideal? Most importantly, given the potential realignment of United States trade policy in general under a Trump or even a different future Administration, what challenges lie in defining and redefining U.S.-Africa trade relations? What impact would such realignment have on the Africa Union’s ongoing efforts to establish a Continental Free Trade Area (CFTA)? How much flexibility would the United States have in not using its model free trade agreement (FTA) in negotiations with African countries post-2025, such that the United States could create more and better opportunities for trade-driven growth and poverty reduction in Africa?

In her essay, Joy Kategekwa argues that U.S. trade preferences to African countries should be redirected to prioritize the development of productive capacities and value addition of African products. She argues that this can be done through targeted United States investments in agriculture, services, and industry so that African economies can transition from being primary product producers and suppliers to producing products at higher rungs of the global value chain. In her view, such a U.S.-Africa trade relationship would not only place preferences in their “proper developmental context,” but would also entail having African countries commit to encourage local ownership and capacity development. Doing so would increase Africa’s gains from international trade, which at the moment are among the lowest relative to other regions. Such increases in gains in trade would in turn unleash trade’s potential to work for Africa’s development and to meet the global Sustainable Development Goals, such as eliminating extreme poverty by 2030. For these reasons, she argues against basing U.S.-Africa trade relations in the post-2025 period on a reciprocal-based trading arrangement, a structure often seen in the Economic Partnership Agreements between African countries and the European Union. She also counsels against incorporating limiting timeframes that would require periodic renewal, as has been the case with AGOA, because the uncertainty surrounding renewals would not augur well for the kind of long term investments from the United States she envisages in this post-2025 trading regime.

On his part, William Davis argues that African countries should prepare for a nonreciprocal trade relationship with the United States after September 2025 by accelerating the ongoing negotiations and subsequently implementing the commitments in the African Union-led CFTA. Relying on studies conducted by the Economic Commission for Africa (ECA), Davis shows the adverse trade consequences Africa is projected to suffer as a result of various megaregional trade agreements around the world. The studies Davis cites make the case for the CFTA to be designed to counteract and off-set these adverse consequences and to set in motion economic growth through increased intra-African trade. He argues that if a fully implemented CFTA in the form envisaged by the ECA becomes the foundation upon which negotiations between African countries and the United States are conducted, it would be a win-win situation for the United States as well. After all, he argues, the entire African market under the CFTA would be open to United States traders and investors. Davis emphasizes the importance of African countries formulating and following up strategies to fully utilize AGOA preferences, as Ethiopia has successfully done, increasing its share of industrial exports to the United States. Indeed, as Davis shows, since AGOA was enacted, fossil fuels have accounted for no less than 65 percent of imports to the United States from Africa. The imperative to increase nonfossil fuel exports to the United States through strategies of structural transformation of African economies is an imperative that the African Union has set for itself and is a common theme among all four symposium contributions.

Kathleen Claussen’s contribution examines the stakes involved in figuring out the extent to which the CFTA will converge or diverge from what she calls the “new era of deeper and faster regulatory alignment outside the WTO.” The United States embodies these new commitments in similar form and content in virtually all of its FTAs and in various megaregional trade agreements such as the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. More specifically, she is skeptical that there is much scope for radically altering U.S.-Africa trade relations because the framework Congress and the executive branch have put in place to negotiate and approve trade agreements, known as Trade Promotion Authority, imposes detailed negotiating objectives on U.S. negotiators that have been difficult to deviate from in practice. However, Claussen notes that there are good reasons for alternative economic instruments to govern U.S.-Africa trade relations so that they are not embedded in this growing global convergence of “shared principles across agreements and across geographic areas” embodied in traditional U.S. FTAs. For example, she argues in favor of alternative models, such as Trade and Investment Framework Agreements, non-enforceable jointly agreed action plans, or memoranda of understanding. Adopting such alternatives, she argues, would be justified by “the significant disparities in market power between the United States and some of the poorest African economies.” Finally, Claussen reminds us that hinging a future U.S.-Africa trade relationship around the various overlapping subregional African trade blocs that are designed not by economic advantage but by historical and other strategic interests may ignore other avenues that would give voice to the “municipal level actors,” who she notes often have “limited opportunity to contribute to trade law making.”

Last but not least, Stephen Lande and Dennis Matanda argue that AGOA presents the United States with an opportunity to challenge China’s trade model (which is deindustrializing Africa) and instead to pursue a trade relationship that would “diversify trade, build capacity, and integrate [African] economies into higher rungs of global value chains.” These objectives, they argue, are mutually beneficial since African economies would in turn produce intermediary goods for American supply chains. In their view, these objectives can be met by “making modest changes to a few AGOA provisions.” For example, they argue in favor of expanding AGOA’s duty free and quota free access beyond the 1,835 beneficiary products – especially agricultural and agroprocessed products – as a strategy for stimulating Africa’s exports to the United States. This would also involve removing tariff rate quotas on agricultural commodities such as sugar, cotton, and peanuts. They also propose changes to AGOA rules of origin to allow more African fabrics from leading retailers and light manufacturers to enter the United States. They argue that the United States should not pass up the “huge economic opportunities” that Africa presents, particularly given the commitment on the continent to diversify economies and to raise productivity in agricultural and nonagricultural sectors. Ultimately, for Lande and Matanda, opening up the United States market for more African produce and products and in return opening up the African market for United States traders and investors is a winwin scenario for both sides. They argue that this is particularly true because with the CFTA Africa will create a single market of over a billion people with a collective GDP of over US$3 trillion.

These four thoughtful contributions together outline some of the choices and pathways for a post-2025 United States Africa trade relationship. They also offer examples of strategies that have worked to maximize AGOA’s potential for African countries that can now be used for the remainder of the statute’s tenure. Further, they offer suggestions for expanding the scope of AGOA before its expiry while recognizing the challenges that enacting and implementing these changes will entail. The proposals on reconfiguring U.S.-Africa trade relations beyond 2025 discussed in this symposium – to focus on developing Africa’s export potential beyond exports of raw materials and increasing United States foreign investment and trade in Africa – will hopefully contribute to shaping the debate and outcomes on evolving trade relations between the United States and Africa.

Defining and Redefining U.S.-Africa Trade Relations During the Trump Presidency

In an era in which multilateral trade arrangements have garnered more public notoriety than ever before, the suboptimal trade and investment relationship between America and Africa, as underpinned by the African Growth and Opportunity Act (AGOA), is one of the less controversial ones. AGOA could nevertheless use some adjustments or augmentations to facilitate deeper U.S.-Africa commercial relations. For instance, adjusting AGOA’s origin rules could nudge the private sector on both sides of the Atlantic towards gains for U.S. and African employment and the reduction of trade deficits. Africa must leverage the period before AGOA expires to redefine its trade relationship with the United States in innovative ways. The United States should welcome these measures, since the type of value that Africa would add to the global supply chain would not replace the high-quality jobs that the Trump Administration would like to see in the United States. In fact, this type of production would make U.S. manufacturing more competitive.

The Rise of China in Africa

Although Reuben Brigety, former U.S. Ambassador to the African Union, has argued that the relationship between the United States and Africa has “blossomed,” China passed the United States as Africa’s largest trade partner in 2009. Today, Africa looks to China to stimulate the continent’s growth. According to the China Africa Research Initiative, Chinese loans to all fifty-five African countries increased from US$121 million in 2000 to over US$17 billion in 2017. Pursuing an investment-heavy model when Chinese exports increased after China joined the World Trade Organization (WTO) in 2000, then-Chinese Premier Zhu Rongji oversaw a surge of Chinese investments in Africa from zero in 2000 to about US$3.1 billion in 2014. As Leslie Gelb observed, Africa’s fear of American military might was eclipsed in 2010 by an existential fear of China’s ability to give or withhold trade and investment. China’s billion dollar investments in infrastructure, medical facilities, and even sports stadiums severely dwarf the multi-million-dollar development compacts the United States grants to African countries making progress in governance and service delivery under the Millennium Challenge Corporation. And while overall exports from sub-Saharan Africa to the United States increased from about US$20 billion in 2000 to a high of US $82 billion in 2008, China’s exports to Africa were approximately US$103 billion in 2015, with China importing US $69 billion worth of African products. By 2016, Africa’s exports to America were US$20 billion; American exports to Africa were US$12 billion, and as of March 2017, AGOA exports were worth only US$2.3 billion.

While the United States was the first non-African country to establish a diplomatic mission dedicated exclusively to the African Union, China’s successes may make the task of realigning, defining, and redefining trade policy the least of America’s quandaries in Africa. Essentially, this type of economic disengagement leaves the world’s largest single economy ill-prepared for a scenario in which rising powers like China rapidly position themselves to exploit the wealth that lies within Africa’s borders. For example, where China has provided loans to Africa, African governments have become even more skeptical of International Monetary Fund and World Bank arrangements that may be tied to American ideals and democratic governance. Illustratively, having proclaimed in October 2017 that China’s Xi Jinping was “the world’s most powerful man,” The Economist painted a bleak outlook for the America/Africa dynamic, suggesting that President Donald Trump is lessening America’s influence abroad because he scorns the values and alliances that underpin this intangible asset.

What Africa Could Do in the Short-Term

In addition to encouraging AGOA beneficiaries to collectively generate export promotion strategies that leverage regional integration and global value chains, African countries should marshal the resources to obtain from the U.S. Congress and the U.S. private sector the kind of AGOA Mwencha came to promote in the first place. Africa should highlight two arguments. First, American investment played a statistically significant role in propelling the remarkable growth in Asia forward and could do the same for Africa. Second, as the Brookings Institution and the UN Economic Commission for Africa (UNECA) have argued, making modest changes to a few AGOA provisions should make the program more effective and present beneficiaries with a viable way to diversify trade, build capacity, and integrate their economies into higher rungs of global value chains for value-added products in the short-term – at least, before 2025.

In their groundbreaking AGOA scenarios, Brookings/UNECA observed that some degree of reciprocal trade between the United States and Africa would be beneficial for African exports if U.S.-Africa trade were accompanied by deeper regional integration within the continent. From this perspective, timing matters. To avoid the types of concerns that arose about the EU’s Economic Partnership Agreements, sequencing is crucial: integration first, followed by agreements with third countries. Thus, America’s current inability to proactively adjust its Africa policy should not prevent Africa’s fifty-five sovereign nations, or its regional economic communities, from initiating changes to the status quo. Such efforts should emphasize avoiding the consequences of premature deindustrialization. Aside from adopting various strategies to fully utilize AGOA’s market access provisions before these expire in 2025, AGOA beneficiaries should collaborate with non-AGOA beneficiaries to holistically eschew any negotiation of partial reciprocal agreements with major powers until a fully-functional Continental Free Trade Area (CFTA) currently under negotiation is in place.

Fortunately, with AGOA now in place through 2025, there is no reason for Africa to seriously consider a more reciprocal agreement until the end of President Trump’s current term. This will allow time for Africa not only to complete the CFTA in the next year or two but also to establish the basis for a common external tariff. Once a common external tariff is in place, Africa can negotiate from a common platform and thus avoid the need for complex origin rules that slow the movement of goods across borders, thus undermining the worthy objectives of trade facilitation efforts.

In fact, there are dangers to proceeding prematurely. The Trump Administration promises to impose more stringent requirements for trade partners than previous administrations demanded in their gold-plated agreements. The demand for a gold-plated free trade agreement (FTA) led to the failure to negotiate the only FTA ever tried between the United States and a sub-Saharan Africa country (the South Africa Customs Union-U.S. FTA). Further, the United States has not been willing to allow developing countries to enter nontraditional markets. The new model is demanding less use of third-country content and minimal U.S. content in origin rules. Of particular concern to Africa should be the Administration’s efforts within the North American Free Trade Agreement negotiations to reduce the use of third-country fabric in the manufacture of eligible clothing, which, if carried over to Africa, would gut the third-country-fabric provision – the most significant provision in the current AGOA program.

Prospects for the Future

Africa must make the case that if a CFTA were established in 2017 or soon thereafter, this trade regime would potentially lift intra-African trade by 52.3 percent from 2010 to 2022. The United States should support decreasing barriers to intra-African trade, including by urging African states to allow firms to operate their world class supply chains and distribution networks without frequent delays and levies at the myriad of customs posts maintained by fifty-five countries. Estimates also find that supportive trade facilitation measures could more than double intraAfrican trade, stimulating industrial products the most. In this regard, the U.S. private sector and its global logistics companies could play a facilitative role, sponsoring and supporting Africa’s weak infrastructure. Such facilitative measures can be implemented through measures undertaken in and between regional economic communities and through multilateral assistance as the WTO’s Trade Facilitation Agreement.

If Africa does not play a larger role in redefining this U.S.-Africa trade relationship, U.S. policy for the region will continue to be defined by summits and initiatives of the Corporate Council on Africa or the U.S. Chamber of Commerce, punctuated by modest annual AGOA eligibility country reviews, at which time benefits may be reduced or removed. In addition, with the graduation of countries like Seychelles from the program, all non-LDCs could be removed from AGOA eligibility during the review of the Generalized System of Preferences in 2018.

Ultimately, admitting Africa’s traditional cash crops under a revised TRQ regime will not have a deep impact on U.S. farmers or on traditional U.S. business partners such as Brazil. Updating AGOA’s rules of origin can only bring success to the program and the development of supply chains – just as adjusting AGOA’s third-country fabric rules enabled Kenya, Lesotho, South Africa, and Ethiopia to achieve some success under AGOA. But the American private sector stands to benefit even more from Africa. The CFTA will create a single market of over a billion people and a collective GDP of over US$3 trillion. Collaboration among Africa’s regional economic communities will accelerate regional projects and unlock the region’s trade and industrial development constraints. Combined with urbanization and yet-to-be-optimally-exploited countries such as the Democratic Republic of Congo, the business-centric mind of President Trump may be just the thing that Africa needs to change this trajectory. But first, the onus is on Africa to craft a comprehensive and effective blueprint from which the United States can take the next logical steps.

AJIL Unbound is published on behalf of the American Society of International Law. AJIL Unbound supplements the American Journal of International Law (AJIL) by publishing short, original essays addressing developments in public international law and private international law.

The views expressed in these essays are the authors’ own, and do not necessarily reflect those of the organisations to which they are affiliated.


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