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Trade in Focus on Obama’s Africa Trip

U.S. Trade Representative Michael Froman said President Obama will emphasize the importance of trade and investment in sub-Saharan Africa.

WASHINGTON — U.S. Trade Representative Michael Froman on Tuesday said President Obama will emphasize the importance of trade and investment in sub-Saharan Africa as he kicks off his first extensive trip to the continent on Wednesday.

This story first appeared in the June 26, 2013 issue of WWD.  Subscribe Today.

Froman, in his first public speech as USTR at a U.S. Global Leadership Coalition conference here, said, “The stars are aligned in Africa for sustained economic growth and substantial reductions in poverty.”

Obama will visit Senegal, South Africa and Tanzania on the trip, accompanied by many administration officials, including Froman. American companies have invested $39.5 billion in sub-Saharan Africa, he said, and are beginning to “hear the call” of African leaders who like that American companies hire, train and promote local people, while investing in communities.

“There is a renewed and serious focus on regional integration and expanding intraregional trade to speed trade flows to, from and within Africa,” Froman said. “There is increased consideration of linking the existing free-trade areas…to create larger markets and economies of scale that can improve Africa’s global competitiveness.”

Seeking to increase business and financial investment, Froman will join Valerie Jarrett, senior adviser to the President, and others from the business community in Johannesburg this weekend in a high-level dialogue with leaders in banking and finance across Africa to “mobilize capital.” Obama will then convene a chief executive officer roundtable in Dar es Salaam, Tanzania, and give a major speech to a Business Forum on trade and investment and development in Africa.

“The East Africa Community will be a preliminary focus of this strategy, but we will also seek to work with other regional economic communities in Africa, and ultimately to support their efforts to create a continent-wide, integrated market,” Froman said. “Right now, red tape, roadblocks and redundant border procedures create lengthy transit times, which can make trade with and within Africa prohibitively expensive.”

The five EAC countries, which are also geographically in sub-Saharan Africa, are Burundi, Uganda, Tanzania, Rwanda and Kenya. Froman said the EAC has committed to creating a Customs union and the U.S. strategy will focus on moving toward single border crossing, harmonized Customs systems and better border infrastructure.

“So, we will work to increase EAC competitiveness, including by providing targeted technical assistance and capacity building at the local level, and will transform our trade hubs into trade and investment centers to provide information, advisory services and tools to encourage investment and two-way trade,” Froman said.

Under a U.S. preference program known as the African Growth and Opportunity Act, the continent’s role in garment production has grown significantly. Erica Barks-Ruggles, the U.S. Consul General in Cape Town, recently said at the inaugural South Africa Trade Expo that textiles and apparel accounted for more than $850 million in exports from Africa to the U.S. in 2011, more than double the level of 2001, although it was down from the peak of $1.6 billion in 2004.

Froman, noting that AGOA is the “centerpiece” of U.S. trade policy with Africa, said that the administration committed earlier this year to “intensify discussions” with Congress and other stakeholders to ensure the renewal of AGOA before it expires in 2015.