Washington: Leveraging the power of the huge US market to spur increased trade and investment with Africa will be a major focus of President Barack Obama’s trip to the continent this week, US Trade Representative Mike Froman said on Tuesday.
“Much of what the president will be doing on this trip — from meeting with jurists about the rule of law and governance to conferring with leaders about some of Africa’s key security challenges — is tied back to trade and investment as key drivers of Africa’s economic growth story,” Froman said in a speech.
Obama leaves on Wednesday for his first extended trip to Africa since taking office. It comes as members of Congress are urging his administration to step up engagement with the region in response to increased competition from China.
The trip will take Obama to Senegal, South Africa and Tanzania, all countries with functioning democracies that will help him make the point that democratic institutions are a building block for sustained economic growth.
The Senate Foreign Relations Committee on Tuesday passed a bill intended to boost trade with Africa by forcing better coordination between US government agencies and departments, establishing comprehensive strategic goals, and marshalling private investments to improve US exports to Africa The bill, which has still to approved by the full Senate and the House of Representatives to become law, “will put the restoration of American competitiveness in Africa at the forefront of our business and development goals,” Senator Dick Durbin, an Illinois Democrat, said in a statement.
The United States already provides duty-free access for most exports from sub-Saharan African countries under the African Growth and Opportunity Act, first passed in 2000 under former President Bill Clinton.
The program is up for renewal in 2015 and Froman pledged on Tuesday to push for a “seamless renewal.” The United States also plans to make an existing trade initiative with the East Africa Community - which includes Burundi, Kenya, Rwanda, Tanzania and Uganda - the centrepiece of its strategy to reduce barriers to trade and investment on the continent, Froman said.
“Right now, red tape, roadblocks and redundant border procedures create lengthy transit times which can make trade with and within Africa prohibitively expensive,” he said.
“Under our strategy, we will work to help integrate the EAC market, move toward single border crossings, harmonized customs systems, and better border infrastructure. Because having access to markets has little value if you can’t get your products there on a competitive basis,” Froman said.
Meanwhile, the US Export-Import Bank will announce agreements to support exports to South Africa and Ethiopia during Obama’s trip, another senior administration official said, speaking on condition he not be identified.
“Ex-Im Bank has made it a priority to help increase US exports to sub-Saharan Africa,” he added, noting that the bank financed about 7 per cent of US merchandise exports to the region last year, compared to about 2 per cent to the rest of the world.
The bank also reached an historic high of over $1.5 billion in authorizations for sub-Saharan Africa last year, he said.
Last August, Ex-Im signed an agreement with the Industrial Development Corp of South Africa to help finance up to $2 billion in US technologies and products to South Africa’s clean energy sector.
The bank also approved a loan guarantee of more than $1 billion in May 2012 to help Ethiopian Airlines finance its purchase of Boeing 787 aircraft.
