U.S. hints on possible Free Trade Agreement (FTA) with Africa: Expanding the FTA World!

African and US officials, private sector representatives, and members of civil society organisations gathered last week, from July 9-12, 2018 in Washington for the 17th African Growth and Opportunity Act (AGOA) Forum. Reports coming from the Forum indicates that discussions were focused on addressing options for a “post-AGOA” model from 2025 onwards, with a possibility of designing free trade deals. The theme for this year’s AGOA Forum is “Forging New Strategies for U.S. – Africa Trade and Investment.”.

A statement of USTR Robert Lighthizer at the opening plenary reveals a possibility of an FTA with Africa in the near future. “I’d like to spend my time with you addressing one very specific new strategy—the Trump Administration’s desire to negotiate a model free trade agreement with a sub-Saharan African country”, said Ambassador Lighthizer.

This is definitely going to be an interesting journey for both US and Africa, taking into consideration the lessons from the EU – Africa Economic Partnership Agreement (EPA) negotiations. It is quite interesting how the developed countries see Africa. This is a huge continent, divers people, and great economic potentials but with fragmented economies. These are countries at different levels of development and economic and political integration. One full package of an economic agreement might definitely not be in the interest of majority of African countries, particularly the least developed countries (LDCs). It is not known yet which country the US will select for the FTA. Unsurprisingly, speculations are around South Africa, Kenya, Rwanda or Nigeria. Any of these countries could be the ‘lucky’ one. Whichever approach the US adopts, whether the FTA will be with a particular country or selected countries, it will still be an African country or countries and its impact could be on the rest of Africa.

FTAs arguably create opportunities for beneficiary countries to open up their economies to trade more with their members in order to have market access. However, there are also losses if one is not fully prepared for it and does not negotiate properly before signing the agreement. The question we should be asking is, how significant is Africa’s benefit from previous FTAs with other developed countries? There are infant industries that are collapsing and these FTAs could also potentially impact on farmers and the environment.  What lessons have we learned from the AGOA implementation? What has been AGOA’s impact on Africa? Maybe expanding the opportunities that exist within the AGOA to cover more sectors that are of priority to African countries would be a great idea rather than an FTA.

In as much as FTAs are great opportunities for market access, African countries should focus more on developing sustainable domestic trade policies and strengthen the institutions that govern trade activities. Also, it will be in the overall interest of African countries to trade more among themselves and prioritize on building resilient economies, hence the AfCFTA being an ideal trade regime to focus on. When Africa is able to integrate properly into one vibrant economy, it will make it somewhat easy and less complex to negotiate economic deals with the rest of the world.

In the coming month, as African negotiators convene to discuss the competition, investment, and intellectual property rights of the AfCFTA, we hope that every effort will be made to bring the agreement into effect.

Author:

Felicia Masenu is a Program Assistant at the Africa Centre for International Trade and Development (ACINTaD).

Disclaimer:

Opinions expressed in this article are that of the author only and does not reflect the opinion of the Africa Centre for International Trade and Development.

[1]https://agoa.info/news/article/15470-statement-of-ustr-robert-lighthizer-at-the-opening-plenary-of-the-2018.html