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SA Firm as US-Africa Trade Dips

Published date:
Thursday, 29 January 2004

The U.S. International Trade Commission (ITC) today released U.S.-Trade and Investment with Sub-Saharan Africa, the fourth in a series of reports intended to assist the President in developing a comprehensive trade and development policy for the countries of sub-Saharan Africa.

The ITC, an independent, nonpartisan, factfinding federal agency, conducted the investigation for the United States Trade Representative (USTR). As requested by USTR, the ITC's study is limited to the 48 countries of sub-Saharan Africa (SSA).

The current report provides an update for 2002 on U.S.-SSA trade and investment flows in major sectors; information on the African Growth and Opportunity Act (AGOA); a discussion of major developments in trade and economic policies significant to U.S.-SSA bilateral trade and investment; an update on progress in regional integration in SSA; and a compilation of multilateral assistance, U.S. bilateral assistance, and trade-related initiatives related to SSA. The report contains economic profiles for each of the 48 countries of SSA and sector profiles for six major SSA sectors: agriculture, fisheries, and forest products; chemicals and related products; petroleum and energy-related products; minerals and metals; textiles and apparel; and certain transportation equipment. Following are highlights of the report:

-- In 2002, U.S.-SSA merchandise trade totaled $24.1 billion, down from $27.8 billion in 2001. U.S. exports to SSA declined by 12.7 percent in 2002 to $5.9 billion, and U.S. imports from SSA fell by 13.5 percent to $18.2 billion in 2002. The decrease in U.S. exports to SSA was primarily because of decreased exports of transportation equipment to South Africa and Kenya; and the decline in U.S. imports from SSA was largely because of a decline in energy- related products, primarily a 17.9 percent decrease from Nigeria. In comparison, nonpetroleum imports decreased by 11.9 percent to $6.8 billion in 2002.

-- In 2001, the United States recorded a cross-border surplus in services trade with Africa of $1.7 billion. The primary U.S. cross-border service exports to Africa included tourism, business services, education, and freight transport. U.S. service imports from Africa were mainly travel and tourism, passenger transport, business services, and freight transport.

-- Total U.S. imports from SSA countries eligible for the AGOA benefits (including the GSP provisions) totaled almost $9 billion in 2002, an increase of 9.9 percent from $8.2 billion in 2001. The largest share of U.S. imports under AGOA came from Nigeria (60.2 percent), followed by South Africa (14.9 percent) and Gabon (12.7 percent). Other major suppliers included Lesotho, Kenya, Cameroon, Mauritius, and the Republic of the Congo. These imports were dominated by U.S. purchases of energy-related products in 2002, which represented 75.9 percent of total AGOA imports in 2002, down from their 83.5 percent share of the total in 2001. However, significant increases were recorded for textiles and apparel, which accounted for 8.9 percent of the total in 2002, up from a 4.4 percent share in 2001, and transportation equipment, which represented a 6.1 percent share in 2002, compared with a 3.7 percent share in 2001.

-- As government officials, companies, and international firms become more familiar with the advantages of AGOA, SSA continues to attract investment driven by access to AGOA benefits. Although the textile and apparel sector has received substantial levels of investment, other sectors, such as the automobile sector in South Africa and the information technology sector in Uganda, are beginning to benefit from AGOA-related investment.

-- Foreign investment portfolio flows to SSA totaled $700 million in 2002, reversing the $1 billion outflow recorded in 2001. As in prior years, South Africa accounted for virtually all foreign portfolio investment flows to SSA in 2002. U.S. net direct investment flows to Africa totaled $861 million in 2002, representing less than 1 percent of total U.S. direct investment abroad. Nigeria and South Africa attracted the largest amounts of U.S. foreign investment flows, $922 million and $112 million, respectively. These inward investment flows were offset by outward flows from the rest of Africa totaling $174 million.

-- U.S. government agencies continued to fund and implement a broad range of trade capacity- building initiatives in SSA. SSA received $105.5 million in FY 2002, representing 16.5 percent of total U.S. funding for trade capacity-building initiatives. Funding for SSA capacity-building initiatives increased 30.6 percent and 16.5 percent from FY 1999 and FY 2001, respectively.

U.S.-Trade and Investment with Sub-Saharan Africa (Investigation No. 332-415, USITC Publication 3650, December 2003) will be available on the ITC's Internet server at A CD of the report may be requested by calling 202-205-1809 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.


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