Us Trade Agreement With Africa
AGOA in comparative perspective: European Union trade framework with Africa In February, President Donald Trump and Kenyan President Uhuru Kenyatta announced their intention to negotiate a bilateral free trade agreement. On March 17, President Trump formally informed Congress of his intention to move the negotiations forward, as the United States tries to secure its second free trade agreement with an African country. The initial announcement of bilateral negotiations drew widespread criticism from members of the African Continental Free Trade Agreement (AfCFTA) and the East African Community (EAC), who are frustrated by Kenya`s decision to negotiate alone. Kenya has downplayed these regional risks and aims to ensure the long-term benefits of the African Growth and Opportunity Act (AGOA), promote its economic ambitions in Vision 2030 and strengthen security cooperation between the two countries. While Kenya has been elevated to strategic partner in 2018 and is important in combating terrorist efforts against al-Shabaab, the U.S. motivations seem more symbolic than economic. Kenya offers the United States the opportunity to develop a reproducible model for future trade agreements between the United States and Africa at limited risk in a country where China has tried and failed to reach a free trade agreement. While a final agreement is unlikely to be reached this year, the outcome of a free trade agreement between the United States and Kenya will have a significant impact on both intra-African trade and China`s influence in Kenya. At this stage, the political commitment to negotiations between the two heads of state and government is of the utmost importance. President Uhuru Kenyatta is one of the few African leaders to have established a positive relationship with President Trump and is the only African leader to have made two visits to the White House.
Following its second meeting in February, the U.S. Chamber of Commerce established a Kenyan U.S. trade task force to build mutual trust and find common ground between the parties on key trade priorities for the economy. “This is essential, because services account for about 60% of Africa`s GDP and, for example, in 2014, services accounted for 30% of world trade…. Markets for national services will be open to service providers from other African countries,” Muchanga said. Much of sub-Saharan Africa`s trade with the world still relies heavily on primary exports such as oil and other mineral fuels (approximately 54% of its exports to the world in 2010 in value terms); Precious stones and metals (10%) and minerals, slag and ash (5.14 As a result, many countries in sub-Saharan Africa – like many developing countries and regions – remain vulnerable to rising and falling international commodity prices. When President Bill Clinton signed the African Growth and Opportunity Act (AGOA) in 2000, African countries gained a competitive advantage by providing unilateral duty-free exports for 6,500 African products to the United States.