TRALAC - Trade Law Centre

USTR Lighthizer: US will soon select an African country for a 'model' free trade deal

Wednesday, 31 January 2018

Source: InsideTrade.com

U.S. Trade Representative Robert Lighthizer expects the U.S. will soon strike a free trade deal with a “properly selected” African country that will become a model for others in the region, he said on Wednesday.  

During a radio interview at the White House, Lighthizer was asked about the potential for U.S. trade in the African region – something covered by the African Growth and Opportunities Act, which he said was designed to “get these economies to start moving forward” with “rules and structure that allows free enterprise to go forward.”

“They get duty preferences when they do that,” he noted. “I think that before very long we're going to pick out an African country, properly selected, and enter into a free trade agreement with that country,” he continued. “And then that, if done properly, will become a model for these other countries.”

 Lighthizer – who in the same interview cited President Trump's goal of striking “as many bilateral agreements” as possible – said he sees “enormous potential” in Africa.  “We're only a few years away from that being the population center of the world, and if we don't figure out a way to move them right then China and others are going move them in the wrong direction,” he said. “So there are a number of issues, a lot of challenges. It's extremely important, and it's something that we're very much focused on.”

 USTR, in the latter months of the Obama administration, issued a report on the future of the U.S. trade relationship with African countries after the unilateral preference arrangement laid out in AGOA expires or is outgrown.

 AGOA is likely to expire in 2025, providing what the September 2016 report called “a sense of urgency for the development of a new trade and investment framework and, for now, an unprecedented stretch of stability in the trading relationship during which the U.S. Administration, Congress, African partners, and U.S. and African stakeholders can plan, consult, and develop a consensus on this new framework.”

Negotiating comprehensive free trade agreements with each sub-Saharan African country would be unrealistic, the report said, although it allowed that the U.S. might be able to strike such deals with some.

The report laid out three different options for comprehensive deals, including one type that would be “built from scratch” with individual countries or regional economic communities within Africa. Such an approach, it argued, likely would “require significant periods of time for negotiation, especially with respect to disciplines that have not previously been included in African agreements or at the WTO.”

A second option would include the U.S. in a regional FTA – the type of deal the Trump administration has railed against. A third possibility, the report said, would involve the “docking” of African countries onto existing or renegotiated U.S. FTAs.

“One important lesson from the decades of our AGOA engagement is that policy reforms across a range of areas are necessary to create the right enabling environment for trade and investment and, without this, even generous tariff treatment can have a limited impact,” the report stated. “A reciprocal trading arrangement that encourages few policy reforms may be similarly limited in its ability to improve trade and investment between the United States and sub-Saharan Africa.”

During the radio interview on Wednesday, Lighthizer also repeated the administration's litany of complaints against Chinese trade practices and lament about the U.S. trade deficit with Beijing, decried the Senate's failure to date to approve any of his deputy USTR nominees and said the U.S. hoped to change World Trade Organization rules he said were “rewarding non-economic behavior.”

 

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