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Africa Strategy Includes Pursuing Trade Agreements

Wednesday, December 19, 2018
Sandler, Travis & Rosenberg Trade Report

Improving trade and commercial ties with African countries is one of three pillars of a new Africa strategy announced by the Trump administration. Other areas of focus will include strengthening security and reforming foreign aid programs.

The strategy includes a “Prosper Africa” initiative that a White House fact sheet states “will support open markets for American businesses” and “improve the business climate,” with benefits expected to include an increase in U.S. exports and greater reciprocity with African trading partners. The U.S. will also use the African Growth and Opportunity Act to “promote deeper trade ties and fair trade with sub-Saharan African states.”

In a speech detailing the strategy, National Security Advisor John Bolton said that in the coming months and years the U.S. intends to “pursue modern, comprehensive trade agreements on the continent that ensure fair and reciprocal exchange between the United States and the nations of Africa.” Bolton said the U.S. “will begin these negotiations on a bilateral basis, and focus on creating mutually beneficial partnerships.” This suggests that the U.S. could end up concluding trade agreements with groups of African countries rather than individual nations, perhaps with one or more of the continent’s existing trade and customs blocs.

Bolton noted that the U.S. will focus this and other economic efforts on “African governments that act with us as strategic partners and which are striving toward improved governance and transparent business practices.” He added that structural reforms “will likely be critical, including practicing fiscal responsibility, promoting fair and reciprocal trade, deregulating economies, and supporting the private sector.”

Bolton indicated that the strategy as a whole is designed in large measure to counter the rapidly expanding “financial and political influence” of China and Russia, which are “deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States.” In particular, he accused China of using “bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to [its] wishes and demands” as part of broader strategic initiatives like “One Belt, One Road,” which aims to “develop a series of trade routes leading to and from China with the ultimate goal of advancing Chinese global dominance.” These initiatives are already having “disturbing effects,” Bolton said, such as the possibility that Djibouti may soon hand over control of a shipping port on the Red Sea that sits astride major arteries of maritime trade between Europe, the Middle East, and South Asia to Chinese state-owned enterprises.

Other elements of the strategy, Bolton said, including (a) encouraging African leaders to choose high-quality, transparent, inclusive, and sustainable foreign investment projects and (b) revamping foreign aid contributions to Africa to target “key countries and particular strategic objectives,” with the goal of advancing U.S. interests and helping African nations move toward self-reliance.

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