Trade and customs issues included in new Sub-Saharan Africa strategy

Trade and customs issues included in new Sub-Saharan Africa strategy
Published date:
Tuesday, 09 August 2022

Trade and customs issues are included in, but do not constitute a major component of, a new U.S. strategy toward sub-Saharan Africa announced this week by the Biden administration.

However, a recent report raises the possibility that the U.S. could yet pursue trade preference program changes, trade liberalization initiatives, and other efforts to further increase trade with Africa.

The strategy states that the U.S. will “build on existing programs and policies to increase U.S. investment and trade with Africa,” focusing on sectors “that both align with U.S. priorities and meet our African partners’ needs such as agribusiness, energy, entertainment, healthcare, and technology.”

For example, the administration plans to work with Congress on the future of the African Growth and Opportunity Act, which expires Sept. 30, 2025, and to collaborate with willing African partners on ways to “deepen and broaden our trade relationship, including through trade negotiations.”

The strategy provides no further details on what the future of AGOA might look like, what topics negotiations might cover, or what form any potential resulting agreement might take. However, a recent report from the Congressional Research Service offers some insights.

According to CRS, efforts by African countries to implement the African Continental Free Trade Area could spur changes to AGOA. Through the phased negotiation and implementation of various commitments, the AfCFTA aims to eventually achieve goals such as the elimination of tariffs on 97 percent of goods, the creation of a single market, and the establishment of a common African customs union.

Although there are challenges to reaching these and other goals, the report states, doing so could expand U.S. market access to the region and aid in the diversification of U.S. and global supply chains.

But whereas the AfCFTA covers virtually all African countries, AGOA is statutorily limited to sub-Saharan Africa. This divergence “could be an impediment to the development of intra-African supply chains and greater intra-African trade,” the report states, and so “Congress may consider whether various reforms to AGOA’s regional focus could address such concerns, such as broadening the program to include North African countries or changing AGOA’s rules of origin to allow for cumulation among all AfCFTA participants.”

The AfCFTA could also prompt the U.S. to pursue new trade agreements in Africa. “Given the growing number and importance of regional trade negotiations that do not involve the United States, such as the AfCFTA,” the CRS report states, “Congress may consider how the United States can ensure U.S. trade policy priorities continue to influence the development of new global trade rules, including in Africa,” such as by greater prioritization of new U.S. trade agreement negotiations with countries or regional blocs in Africa.

While the U.S. has trade and investment framework agreements and bilateral investment treaties with a number of countries in the region, the report notes, it only has one free trade agreement with an African country (Morocco).

Talks on an FTA with Kenya were initiated under the Trump administration but have been suspended under President Biden, who has opted for a different approach to trade relations with that country.

Under the new strategy the U.S. will also seek to expand cooperation with Africa on supply chain issues. This will include promoting customs-to-business partnerships, increasing the use of U.S. government trade transit cargo security measures, and expanding the sharing of data with African partners.

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