Business News of Wednesday, 3 April 2013
The United States says it is exploring the possibility of a trade and investment agreement with the Economic Community of West African States (ECOWAS), following talks last week between President Barack Obama and three visiting ECOWAS leaders.
US officials put forward the proposal to conclude a Trade and Investment Framework Agreement (TIFA), among other steps, to increase US-Africa trade and investment, said acting US Trade Representative Demetrios Marantis in a statement. “A Trade and Investment Framework Agreement with ECOWAS can significantly contribute to economic growth and increased international competitiveness on both sides of the Atlantic,” he said.
The visiting ECOWAS heads of state were President Ernest Bai Koroma of Sierra Leone; Macky Sall of Senegal; and Prime Minister José Maria Pereira Neves of the Cape Verde Islands. Also in attendance was President Joyce Banda of Malawi.
ECOWAS is currently facing stalled negotiations with the European Union over the Economic Partnership Agreements (EPAs); but the fast economic growth of most countries in the region — like much of sub-Saharan Africa — continues to draw interest from the bigwigs of international trade, who are seeking to tap into the region’s growing consumer market and improved investment climate.
Spurring economic growth, trade and investment is among the four key pillars of the US Strategy Toward sub-Saharan Africa unveiled by the White House in June 2012. In it, the United States argues that it is in its interest to improve the region’s trade competitiveness, encourage the diversification of exports beyond natural resources, and ensure that the benefits from growth are broad-based.
Economic growth in sub-Saharan Africa was 5.3 percent in 2012 and 6.9 percent in the six-nation West Africa Monetary Zone (WAMZ) comprising Nigeria, Ghana, The Gambia, Guinea, Liberia and Sierra Leone.
Mr. Marantis said: “The proposal demonstrates the United State’s ongoing support for ECOWAS as well as its continued commitment to Africa’s regional integration and to deepening US economic engagement in West Africa.”
If realised, the agreement will contribute to building the capacity of Africa’s private sector, support American jobs and create opportunities for US businesses in the region, he said.
The US has similar agreements with four African regional economic blocs: the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), the West African Economic and Monetary Union (WAEMU/UEMOA), and the Southern African Customs Union (SACU).
It also has bilateral trade and investment agreements with eight African countries, two of which — Ghana and Liberia — are in West Africa.
President Obama, whose administration has been criticised for not doing enough to expand trade with Africa as China steps up its deal-making in the region, has committed to work with the United States Congress to extend the unilateral preferences under the Africa Growth and Opportunity Act (AGOA) beyond 2015, and extend the Generalised System of Preferences beyond 2013.
In 2011, two-way trade between the United States and Africa totalled US$94.3billion compared to US$127.3billion between the region and China, which became Africa’s biggest trading partner in 2009.
But despite its efforts to diversify trade with sub-Saharan Africa, non-oil exports from Africa to the US continue to grow slowly and have not reached levels that reflect the existing potential. In November 2012, a Congressional Research Service report said crude oil made up about 75 percent of US imports from Africa in 2011.
On the contrary, the United States exports a “highly diverse, variable array of products to Africa; notably equipment, machinery, vehicles, and other technology,” the report said.