TRALAC - Trade Law Centre

Africa: US government, businesses strengthen trade ties with Africa

Wednesday, 18 April 2012

Source: United States Department of State (Washington, DC)

U.S. government officials and business leaders are working to strengthen ties with their African counterparts to enhance trade, investment and economic partnerships with countries across the continent, says Assistant Secretary of State for African Affairs Johnnie Carson.

"Africa represents the next global economic frontier," Carson said in testimony April 17 before the House Foreign Affairs Committee's Subcommittee on African Affairs. He said the World Bank projects economic growth rates between 5 percent and 6 percent for Africa during the next two years, rates exceeding those expected for Latin America, Central Asia or Europe.

Carson said strengthening economic ties with Africa offers an opportunity both to support jobs in the United States and to advance sustainable development on the African continent.

"Increasing two-way trade and enhancing investment helps to grow economies on both sides of the Atlantic," he said.

U.S. trade with Africa has grown significantly during the past decade, Carson said, jumping from less than $7 billion in 2001 to more than $21 billion in 2011. While he called the threefold increase impressive, the assistant secretary said Africa still accounts for less than 2 percent of total global trade.

Africa has been held back by barriers that stand in the way of companies hoping to do business there, such as corruption, high investment finance costs and poor infrastructure, Carson said.

Carson said the U.S. government will continue to work closely with African governments to address these issues and improve investment climates.

The assistant secretary said following the success of his recent energy trade mission to the region, the State Department's Bureau of African Affairs is planning a series of trade missions to Africa to "help and encourage U.S. companies to be a part of the growing economic dynamism" across the continent.

Scott Eisner, executive director of the U.S. Chamber of Commerce Africa Business Initiative, said in testimony following Carson that "sub-Saharan Africa is a trade and investment destination that can no longer be overlooked."

Eisner said the region was largely sheltered from the global economic crisis, and that six out of the 10 fastest-growing economies in the world during the past 10 years have been in sub-Saharan Africa. Eisner added that by 2050, demographic trends suggest that one in four workers in the world will be African.

"We must work to develop specific strategies and mechanisms to promote and facilitate U.S. business engagement in Africa, or risk being left behind," he said.

Florizelle Liser, assistant U.S. trade representative for Africa, testified alongside Carson and Eisner. She said President Obama's administration is committed to building a "strong partnership with Africa that reflects the continent's vital and growing role in international global trade and that is mutually beneficial."

She said that at the heart of this engagement is the African Growth and Opportunity Act (AGOA), which has helped to expand and diversify African exports to the United States, as well as to promote better business environments for foreign investors. The act provides trade preferences to 40 sub-Saharan African countries that are making progress in economic and political reforms.

The 11th annual AGOA Forum will be held in Washington in June. It will bring together more than 600 participants from U.S. and African governments, the private sector and civil society to discuss reducing trade barriers, creating jobs and expanding opportunities in both the United States and Africa.