The shadow of China: An ‘800-pound gorilla’ lurks over the effort to improve ties between the US and Africa
Trade poses a major dilemma for policymakers at this week’s U.S.-Africa Business Forum.
The Obama administration and Congress have recently expanded U.S. foreign policy in Africa beyond humanitarian and health efforts, and into economic policy.
But this has occurred as others countries, including China, offer enticing alternatives to American businesses.
“We have a moment that is passing us by,” said Sen. Chris Coons (D-Del.), chairman of the Senate Foreign Relations African Affairs subcommittee. “[But] our relationship has moved from predominantly aid and relief in response to disasters to predominantly trade and facilitating economic growth. … We do not neglect our values in those conversations.”
President Obama, former President Clinton, Vice President Biden and Secretary of State John Kerry are some of the U.S. officials on this week’s schedule, as well as the heads of state of African countries.
Witney W. Schneidman, senior international adviser for Africa at Covington & Burling LLP, said some of the main issues that could come up include the reauthorization of the African Growth and Opportunity Act (AGOA), which is set to expire next year.
African countries are pushing for a longer-term reauthorization of the AGOA, which incentivizes U.S.-Africa business partnerships. Meanwhile, U.S. lawmakers are advocating that the AGOA include incentives for American companies looking to export to the continent.
Schneidman, who worked in the Clinton administration as the deputy assistant secretary of State for African affairs, said that the business summit “is important because Africa has never registered very highly on the American foreign policy agenda.”
“This is an indication that’s changed,” Schneidman said. “There’s a feeling that we’re playing catch-up to competing countries, like China.”
Stephen Hayes, CEO at The Corporate Council on Africa (CCA), was more blunt.
“China is the cliche 800-pound gorilla in the room that no one can ignore,” said Hayes, whose group works to encourage U.S.-Africa business and has members including Ford Motors, Exxon Mobil and Boeing.
“We need CEOs to understand the market potential and the importance of Africa to the global economy,” Hayes added. “We also need to understand the very high quality of African CEOs as potential partners for our companies.”
According to the administration’s estimates, Africa is home to six of the 10 fastest growing economies in the world; real income has increased more than 30 percent over the past decade.
U.S. businesses are taking notice. Their previous tepidity to enter into the continent for fears of political corruption and stability have subsided, as markets overseas have expanded.
Case in point: Tuesday’s event featured the CEOs of dozens of American companies, including General Electric, Wal-Mart and MasterCard. They’ll be able to meet with the presidents of top African businesses and the heads of state for African countries.
“China is aggressively investing in Africa,” said Tom Hart, U.S. executive director at the ONE Campaign, which advocates to end extreme poverty in Africa. “[But] a criticism we often hear from Africans is China brings in its own workers, limiting the economic prospects for African citizens.”
Coons said the U.S. is “looking to leverage our incredibly active private sector” beyond extracting minerals and mining and into manufacturing consumer goods.
Other top business leaders who are on this week’s agenda include former New York City Mayor Michael Bloomberg and Secretary of Commerce Penny Pritzker. The event is co-hosted by the U.S. Department of Commerce and Bloomberg Philanthropies.
“The U.S. has never hosted a summit of African leaders like this before,” Hart said. “While the summit won’t meet everyone’s expectations, President Obama is making a huge statement about the importance of U.S.-Africa relations and helping reframe the debate for Washington, companies and the public.”
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