TRALAC - Trade Law Centre

'Trump and America can win by doing more business with Africa'

Saturday, 08 April 2017 Published: | ERIC IDIAHI

Source: The Hill

The United States and sub-Saharan Africa do tens of billions of dollars in trade together each year. While some regions in the world are disturbed by President Trump’s “America first” stance, most exports coming from Africa to the U.S. are natural resources and low-value goods, thus it is generally accepted wisdom that African trade has not hurt American manufacturing or taken away any jobs.

In fact, to the contrary, the African Growth and Opportunity Act (AGOA) — a trade preference program allowing duty-free access to the U.S. for select products from sub-Saharan African countries — has led to the creation of more than 120,000 jobs in America.

By creating tangible incentives for African governments to implement economic and commercial reforms, AGOA is helping to build market opportunities and stronger commercial partners in Africa for U.S. companies, thereby creating opportunities for expansion and collaboration.

From a global trade perspective, Africa currently represents a mere 3.3 percent of global exports. It hardly can be considered a competitor to the U.S. behemoth. Africa, however, is an important business ally.

In recent years, the continent’s private sector has been overwhelmingly dominated by investment inflows from China, but doing business with Americans is still the gold standard in the eyes of many African CEOs. That pattern — of the U.S. on the sidelines as Chinese firms and government projects rule the market — can be reversed when the private sectors of our continent and America work together.

There is great benefit to be had for both the U.S. and Africa. The Chinese, after all, are not driven by charity as they rapidly build infrastructure, outbid competition on construction projects, and take a major role in the continent’s industries and extractive production.

There is great long-term profit to be made by partnering with Africa now: this is a continent that is home to some of the fastest growing economies in the world, exciting private sector developments and innovations, rich natural resources, and a growing middle-income population of consumers eager to purchase international (and particularly American) products.

It is perfectly reasonable for the U.S. president to be determined to put America first — as the well-being of his own country is, indeed, his primary responsibility — but in order for America to succeed in the global economy, it must look at the world’s opportunities with fresh eyes. For America to shore up its global competitiveness under the new administration, it must now examine the regions that have been overlooked or where it has lost its foothold to competing powers. Starting, I would argue, with Africa. Steady, meaningful commercial and economic engagement with Africa is in the U.S.’s strategic interest.

The Trump administration has indicated concerns about U.S. aid dollars being redirected, once in-country, by corrupt governments in the region. While much of the continent is not yet ready to be transitioned off of traditional forms of aid, it will be the growing private sectors and expanding economies that get it there.

To that end, engagement between the Trump administration and sub-Saharan Africa would do well to include the continent’s business community in a meaningful way — something, as a veteran businessman himself, President Trump is uniquely well equipped to do.

In Africa, President Trump has the opportunity to work with a private sector that not only is ready and willing to cooperate, but also is accustomed to working with international partners and understands the global rules and plays by them.

The African private sector offers an abundance of major players — many of them under 50 — who share the Trump administration’s disdain for corruption on this continent, as it can hamper our own abilities and progress, and at times forces us to fight against stereotypes when building trust and credibility among foreign partners and investors.

There is real opportunity for both sides. Building substantive ties to the younger generation of business leaders in Africa is a smart investment for the Trump administration because we will be around for decades to come. We will continue to help build our economies and create jobs, which in turn reduces the burden on U.S. aid programs and creates future generations that are ready to do business and trade fairly with America.

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