Ambassador Michael Froman told a hearing on the African Growth and Opportunity Act (AGOA).
He said in one single year, China imports from Africa fell from $110 billion in 2014 to $50 billion in 2015, noting that for Africa, deepening trade and investment ties with the United States will be increasingly critical in the face of the sudden economic headwinds the continent is encountering.
“With commodity prices falling and China transitioning toward lower growth, China’s imports from Africa appear to have fallen by half in a single year, from above $110 billion in 2014 to barely $50 billion in 2015. Africa’s next decade of sustainable growth will require new sources of demand – in agricultural and manufacturing trade, internal integration, and in capitalizing on the continent’s boom in Internet access and mobile use, rather than the resource boom of the last ten years,” he said.
Arguing further that deeper trade and investment ties with Africa will mean growing markets for US exports – he indicated that just as they can serve America’s security interests by preventing conflicts, its development interests by alleviating poverty, and its values through policies that encourage democratic governance, broad-based growth, and strengthened labor and environmental standards.
For Africa, deepening trade and investment ties with the United States will be increasingly critical in the face of the sudden economic headwinds the continent is encountering, he adds.
He believes that the US has a strong foundation in Africa through AGOA.
“Over the last 15 years, AGOA has helped sub-Saharan countries sharply increase their exports, including a nearly fourfold increase in non-oil exports to the United States, and US direct investment in sub-Saharan countries has nearly quadrupled. AGOA has supported hundreds of thousands of jobs in sub-Saharan Africa. And the United States has benefited as well, with significant increases in exports since 2000,” he said.
Citing the successes of AGOA, he urged the US to expand on the initiative that the country built on those successes when it launched the Trade Africa initiative with the East African Community (EAC) in 2013.
The US Congress on Thursday, June 11, 2015 renewed the Africa Growth Opportunities Act (AGOA) for another 10 years, according to information accessed by ghanabusinessnews.com.
The trade agreement was at that time expected to end in 2025.
An overwhelming 392 against 32 of members of Congress voted for the renewal indicating a bipartisan endorsement of AGOA.
AGOA is a major trade policy of the US government initially enacted on May 18, 2000 until 2008, but was amended in 2004 to expire in 2015 to allow increased market access to some 40 eligible sub-Saharan African (SSA) countries to export approximately 7000 products lines duty free quota free to the US market.
According to the World Bank foreign trade between sub-Sahara African countries and China grew more than three times between 2007 and 2014, from about $60 billion to nearly $200 billion, which is a level comparable to the total trade with the European Union and about four times the total trade with the United States, adding that the slowdown in China is expected to affect Africa’s foreign trade through third-party effects.
The World Bank also acknowledged that the region is vulnerable to commodity price shocks because of its pattern of exports.
By Emmanuel K. Dogbevi