East Africa: Obama's deal to double East African Community trade
President Barrack Obama of the United States recently launched a project dubbed 'Trade Africa' aimed at doubling intra-regional trade in the five partner states of the East African Community (EAC).
The project will hopefully see EAC exports to the US go up by 40%, reduce by 15% the average time needed to import or export a container from the ports of Mombasa or Dar es Salaam to land-locked Burundi and Rwanda in the EAC's interior.This new partnership between the US and the EAC will also decrease by 30% the average time a truck takes to transit selected borders.
The project announced during his recent visit to Tanzania also seeks to increase internal and regional trade within Africa, and expand trade and economic ties between Africa, the US and other global markets.
A key component of the President Obama's strategy is the Doing Business in Africa (DBIA) Campaign, which was launched by the US Department of Commerce in Johannesburg, South Africa last November.
Its main objective is to bolster federal trade promotion and financing capabilities in order to help US businesses obtain trade and investment opportunities. With these opportunities, the United States' commercial relationship with Africa is expected to grow. Since its unveiling, the Commerce department has been working alongside other federal agencies to encourage US companies, (with a focus on small- and medium- sized businesses and African Diaspora-owned business), to trade and invest in the region.
A statement issued on the White House website discloses that Trade Africa, whose cost and timeframe were not mentioned, will initially focus on the member states of the East African Community (EAC) that include Burundi, Kenya, Rwanda, Tanzania, and Uganda. It said that EAC will get this support because it is an economic success story, and represents a market with significant opportunity for US exports and investment. "The five states of the EAC, with a population of more than 130 million people, have increasingly stable and pro-business regulations," said the statement. The EAC partner states are home to promising local enterprises that are forming creative partnerships with multinational companies. They are also benefiting from the emergence of an educated, globalized middle class. The statement added that regional intra-EAC trade has doubled in the past five years, and the region's GDP has risen to more than $80 billion - quadrupling in only 10 years.
The US also hopes to expand its collaboration with other regional economic communities in Africa, including in cooperation with other partner nations. "Increasing trade between the United States and Africa will be the focus of the African Growth and Opportunity Act (AGOA) forum in Addis Ababa on August 9 - 13," said the statement. The forum will also celebrate the progress achieved through AGOA since it was signed into law in 2000, and will help pave the way to AGOA's renewal by 2015.
The statement said that trade Africa will help mobilize resources to support increased U.S.-EAC trade and investment, building upon the US.-EAC Trade and Investment Partnership (TIP) announced in June 2012. The activities underway include the exploration of a US-EAC Investment Treaty to contribute to a more attractive investment environment, launch of negotiations on a Trade Facilitation Agreement and expansion of the TIP to include regulatory issues that affect the competitiveness of EAC regional and global trade (including with the United States), particularly the development of product standards, and regulatory systems related to food safety and plant and animal health;
Others are the establishment of a new US-EAC Commercial Dialogue to bring the private sector together with policy makers and increase opportunities for trade and investment.