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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.
What sort of trade arrangement is the US proposing?
In July 2021, the Biden-Harris administration launched the Prosper Africa Build Together Campaign.
The idea was to elevate and energise the US’s commitment to trade and investment with countries across the African continent.
The revamped Trump strategy includes a targeted, long-term effort to connect American and African businesses with new trade and investment opportunities.
Key sectors being targeted are clean energy and climate smart solutions, health, and digital technology.
Through the initiative, the US is promising to help drive billions of dollars of investment to Africa and to work towards equitable access to the benefits of trade and investment. It also envisages harnessing the power of small businesses, especially those led by women and members of the African Diaspora.
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.
Nevertheless, we offer two key elements of such a trade pact.
First, it should be truly multilateral unlike, for example, the prevailing US-Africa trade agreement, the African Growth and Opportunity Act (AGOA) – which is a unilateral US government policy. A truly multilateral pact would recognise African leaders as equal partners and ensure that they have an opportunity to properly engage in US-Africa trade negotiations.
Anything short of this would be counter-productive for one or both parties. For instance, a bad trade pact could worsen US trade deficits while for Africa, it would amount to a missed opportunity for badly needed structural economic transformation.
Read more: https://theconversation.com/the-us-is-revisiting-its-trade-relations-with-african-countries-key-issues-on-the-table-188230