US plays catch up in Africa

Updated: 2013-08-06 11:00

By Chen Weihua in Washington (China Daily)

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The US will review its key trade legislation with African nations in order to cash in on the growing opportunities in the African continent and try to stay in stride with emerging nation rivals such as China, Brazil and India.

US Trade Representative Michael Froman said on Monday that the US government wants to see the "seamless renewal of AGOA", the African Growth and Opportunity Act that offers African nations - that open their economies and build free markets - trade incentives with the US. Signed into law in May 2000, AGOA is set to expire in September 2015.

Froman said the US wants to use the next two years until then to look at its successes and ways it can be improved.

He said they will "also look at the changing economic and trade relationships that have developed between Africa and other economic partners around the world". Speaking at the Brookings Institution, Froman also said he will attend the 2013 AGOA Forum in Addis Ababa, Ethiopia, later this week.

Total African exports under AGOA have increased by 300 percent. In 2012, the 39 eligible countries exported nearly $35 billion in products to the US under AGOA and its related general system of preferences provisions. However, oil products still accounted for 84 percent of AGOA imports to the US in 2012.

Calling AGOA a "significant success", Froman admitted the numbers are still small.

China eclipsed the US as Africa's largest trade partner in 2009. The trend has continued with bilateral trade exceeding $200 billion last year, registering an annual growth of 30 percent in the past decade. This compares to $109 billion of total US trade with Africa in 2012.

Froman reiterated what President Barack Obama said during his June trip to Africa, that it is good that China, Brazil, Turkey and other countries are interested and involved in Africa. Unlike the depiction in Western media, statistics show that about 85 percent of employees in the more than 2,000 Chinese companies operating in Africa are Africans.

AGOA, like other US policies, excludes countries that it deems performing poorly in democratic and human rights reforms, regardless of how desperate a nation is for development opportunities.

China has long practiced a policy of non-interference in the domestic affairs of other nations and its loans to African nations come with no strings attached like the aid from the US and other Western nations.

He Wenping, an expert on African studies at the Chinese Academy of Social Sciences, said China's Africa policy is "non-ideological" and emphasizes "non-interference in internal affairs and respect for the choices African nations make for their own development path".

She said China places emphasis on how to help Africans build capacity by "teaching them how to fish instead of giving them fish", quoting an old Chinese proverb.

Statistics show that China had provided training for 50,000 Africans by 2012, covering a wide range of fields, from public administration, agriculture, and fisheries, to healthcare, science and technology, environmental protection and news media.

In the next three years, the African Talents Program announced by the Chinese government will train another 30,000 people in various sectors and offer 18,000 government scholarships to Africans.

Mwangi Kimenyi, senior fellow and director of the Africa Growth Initiative at the Brookings, told China Daily that China also offers significant tariff treatment to a number of African countries.

Meanwhile, China also grants tariff exemptions on both raw materials and some-finished or finished products from some African countries.

Kimenyi, who moderated Froman's talk, said Froman has articulated that the Obama administration does see the opportunity in Africa and is placing emphasis on engaging Africa.

He said he hopes Congress will tackle the extension of an enhanced AGOA by next year. "This is very important," he said, "delaying the extension will create uncertainties on the part of investors and this will be quite harmful to African countries."

(China Daily USA 08/06/2013 page1)