Last year, the US’s Biden administration announced plans to increase two-way trade and investment between the US and Africa.
The starting point was a revamp of the Trump-era “Prosper Africa initiative”. As American secretary of state Antony Blinken visits three African nations – South Africa, Democratic Republic of Congo and Rwanda – Kefa Otiso and Francis Owusu provide insights into US-Africa trade relations and what’s being planned to improve them.
The revamped Trump strategy includes a targeted, long-term effort to connect American and African businesses with new trade and investment opportunities. What should a good trade pact look like? This is a difficult question to answer, given the many possible configurations of a potential trade pact.First, it should be truly multilateral unlike, for example, the prevailing US-Africa trade agreement, the African Growth and Opportunity Act – which is a unilateral US government policy.
So, instead of a free trade agreement, a beneficial pact for Africa should be designed to boost trade and investment between the US and Africa while also gradually increasing the capacity of African countries to compete globally in the production of nontraditional high-value products. What arrangement is in place at the moment? The prevailing US-Africa trade agreement is the African Growth and Opportunity Act. It was enacted in 2000 and is expected to expire in 2025 unless the US Congress extends it.
Conceived in the context of Trump’s preference for bilateral trade deals, the pact was to conclude within 10 months. But it did not. Otherwise, it would have given the US a replicable model for future trade deals with Africa. In the end, the expiry of Trump’s term of office scuttled the negotiations.
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