WASHINGTON — President Obama, who held a roundtable with U.S. and African chief executive officers in Tanzania on Monday, unveiled a new trade initiative with several sub-Saharan African countries in an effort to boost commerce between African nations and the U.S.
The “Trade Africa” plan will first focus on the five states of the East African Community — Kenya, Burundi, Rwanda, Tanzania and Uganda — but officials expect to broaden its scope in the future.
The goal of the initiative is to increase imports to the U.S. from the EAC by 40 percent, reduce transport time by 15 percent from the ports to landlocked Burundi and Rwanda and decrease by 30 percent the average time a truck takes to get through select borders.
“I see Africa as the world’s next major economic success story,” Obama said. “And the United States wants to be a partner in that success.”
“The entire GDP [gross domestic product] of sub-Saharan Africa is still less than $2 trillion, which is about the same as Italy,” he said. “Our entire trade with Africa is about the same as our trade with Brazil or South Korea, countries with a fraction of Africa’s population. Of all our exports to the world, only about 2 percent goes to Africa.”
The “vast majority” of U.S. trade in Africa is with three countries — South Africa, Nigeria and Angola — under the African Growth & Opportunity Act, and the U.S. needs to “broaden that,” Obama said.
Overall trade between the U.S. and sub-Saharan Africa has more than doubled over the last decade. The U.S. exports about $22 billion in goods and imports $50 billion, primarily oil and minerals. Textiles and apparel accounted for $881 million in exports from sub-Saharan Africa to the U.S.
As part of the plan, the U.S. is launching a trade facilitation agreement with the EAC and expanding cooperation on regulatory issues. The country is also establishing a new U.S.-EAC Commercial Dialogue to bring the private sector together with policy makers, transforming U.S.-Africa trade hubs into “U.S. trade and investment” centers to provide an array of information, services and risk mitigation and financing. In addition, the U.S. is advancing the “Doing Business in Africa” campaign to encourage American businesses to take advantage of trade and investment opportunities on the continent, while promoting trade missions, trade shows and business-to-business matchmaking in key sectors.
“We’re focused on specific goals — so moving goods faster between ports like Dar es Salaam and Mombasa to Burundi and Rwanda in the interior, or reducing the wait times that truckers endure at the border, increasing East African exports to the United States under AGOA by 40 percent and not simply increasing trade within East Africa [but] doubling it — that’s our aim,” the President said. “We intend this to be the foundation for similar progress regionally that we can do across the continent in years to come.”
Obama added that Commerce Secretary Penny Pritzker will lead a major trade mission to Africa in her first year, and Treasury Secretary Jacob Lew and Energy Secretary Ernest Moniz will visit the region, as well.