Africa-US Trade Agreements: A Step towards Economic Development
Trade between Africa and US has existed for centuries, but it wasn`t until recent years that both sides started formalizing their economic ties. In 2018, the Trump administration announced the United States-Africa Strategy, which outlined the US`s efforts to prioritize and strengthen their partnerships with African countries. Since then, several trade agreements have been signed between the US and African countries, with the aim of promoting economic growth and development. In this article, we will discuss the recent trade agreements between Africa and US and the potential benefits that they can bring to both sides.
The African Growth and Opportunity Act (AGOA)
The African Growth and Opportunity Act (AGOA) is a trade agreement between the US and sub-Saharan African countries. It was first established in 2000 and was later renewed in 2015 for another ten years. AGOA aims to promote economic growth in Africa by providing duty-free access to the US market for eligible African countries. The agreement covers a wide range of products, including agricultural products, textiles, and apparel, among others.
Since its establishment, AGOA has been instrumental in boosting African exports to the US. In 2019, exports from AGOA-eligible countries to the US totaled $18.3 billion, up from $1.4 billion in 2001. This increase in trade has not only benefited African countries but also created jobs and economic growth in the US.
The US-Kenya Free Trade Agreement
In July 2020, the US and Kenya announced that they would start negotiations on a free trade agreement. The agreement aims to deepen economic ties between the two countries and promote two-way trade and investment. Kenya is the US`s eighth-largest trading partner in Africa, and the agreement could potentially create new opportunities for businesses in both countries.
The US-Nigeria Trade and Investment Framework Agreement
The US-Nigeria Trade and Investment Framework Agreement (TIFA) is an agreement signed between the US and Nigeria in 2012. The agreement focuses on enhancing trade and investment relations between the two countries by providing a forum for dialogue and cooperation. Nigeria is Africa`s largest economy and is an important market for US businesses. The agreement aims to promote investment in key sectors such as agriculture, energy, and infrastructure.
The Benefits of Africa-US Trade Agreements
The recent trade agreements between Africa and US have the potential to bring several benefits to both sides. For African countries, these agreements can provide new opportunities for trade and investment, which can lead to economic growth and job creation. By giving African countries duty-free access to the US market, AGOA has provided a platform for African businesses to expand their exports and generate revenue. Additionally, trade agreements such as the US-Kenya Free Trade Agreement and the US-Nigeria TIFA can open up new markets for African businesses and attract foreign investment.
For the US, these trade agreements can provide access to new markets and increase exports. By promoting trade and investment with African countries, the US can diversify its export markets and reduce reliance on traditional markets. As seen with AGOA, increased trade with African countries can also create jobs and economic growth in the US.
The recent trade agreements between Africa and US are a positive step towards promoting economic development and growth in both regions. AGOA has already been successful in increasing trade between the US and Africa, and the US-Kenya Free Trade Agreement and US-Nigeria TIFA have the potential to further strengthen economic ties between the two regions. By continuing to prioritize and strengthen partnerships with African countries, the US can help foster economic growth and stability in Africa while also reaping the benefits of increased trade and investment.