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News Analysis: Trade to top U.S.-Africa summit agenda, but follow-up unclear

English.news.cn   2014-08-02 10:40:10

by Matthew Rusling

WASHINGTON, Aug. 1 (Xinhua) -- Leaders from dozens of African nations will come to Washington next week for a summit that underscores recent White House efforts to prioritize trade with Africa, but the question remains whether the event will be a one-time deal.

Washington's dealings with Africa have long emphasized security, and economic engagement was just one of many issues within the panoply of American policy objectives.

But next week's summit highlights a shift in priorities, as the White House has placed trade at the top of its Africa agenda.

Indeed, the event is a follow-up to President Barack Obama's Africa trip last summer, where he announced the Trade Africa and Power Africa initiatives in a bid to promote U.S. trade with East Africa and U.S. private sector investment, particularly in the energy sector.

But it is unclear whether the administration will continue to prioritize economic ties with Africa or whether its commitment will eventually fizzle out, and it remains unknown whether the summit is a kickoff to an ongoing cycle of events, experts said.

"The question is whether the economic engagement will continue to be robust after the summit or whether it is a one-time event," RAND Corporation senior international policy analyst Larry Hanauer told Xinhua.

"My sense is that at least for the remainder of the Obama administration, trade and investment will remain a priority, and the U.S. government will continue to push for commercial engagement (with Africa) for the next couple of years," Hanauer said, but added that the pattern could change under a new administration.

The summit comes at a time when many African nations boast rising GDPs; middle classes and their spending power are climbing; the continent's population is expected to double by 2050; and six of the world's 10 fastest growing economies are in Sub-Saharan Africa.

Last year, the United States imported 39.3 billion dollars of goods from Africa, which represents 1.7 percent of total U.S. imports. The United States also exported 24 billion dollars worth of goods to Africa, which represented 1.5 percent of total U.S. exports, according to the U.S. Trade Representative website.

While those figures are small in terms of overall U.S. trade, experts said there is potential there, and the question is whether continued White House commitment can boost that figure.

Amadou Sy, a senior fellow in the Africa Growth Initiative at the Brookings Institution, said the answer is yes.

One key, he told Xinhua, is the renewal of the African Growth and Opportunity Act (AGOA), which offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.

The law, signed in 2000, expires next year and African policy makers are anxiously -- some say nervously -- awaiting its renewal, hoping that it could take place before the end of this year.

Fortunately for them, Africa is one of the few issues upon which the bitterly divided U.S. Congress can agree.

"Typically when it comes to Africa, there's bipartisan, bicameral support," Sy said.

But one challenge regarding AGOA is how to have African nations take full advantage of this duty-free access to U.S. markets, he added.

"There are lots of bottlenecks in Africa. And I don't think they will all be resolved in the short term, but there is some low-hanging fruit, as well as other issues that will involve more engagement," he said.

Obama's Deputy National Security Adviser Ben Rhodes said in a press call Thursday that the president has made clear his commitment to the renewal of AGOA and that the administration will work toward the agreement's reauthorization.

The summit will also serve as an opportunity for U.S. CEOs and business leaders to gain more exposure to Africa and opportunities there, as U.S. companies tend not to understand African markets particularly well, experts said.

While it is easy to cast Africa as a whole as unstable, U.S. companies that have taken the time to investigate the continent's markets have found opportunities to invest productively, Hanauer said.

CHINA, THE U.S. AND AFRICA

For its part, China engages closely and regularly with Africa, with ongoing high-level meetings. But some observers, suspicious of Washington's intentions, argue that U.S. interest in Africa stems from a desire to thwart China's influence there.

But Rhodes during the press call said there is plenty of room for both countries to invest in Africa, noting Obama's comments on the issue in Pretoria, South Africa, last summer.

"President Obama has made clear that we welcome other nations investing in Africa," he said. "China can play a productive role in areas like developing African infrastructure."

MYRIAD GLOBAL CHALLENGES AMID SUMMIT

The summit occurs as the United States faces a number of challenges worldwide, from the possibility of Iraq being swallowed up by Islamic extremists to the Ukraine crisis and to Israel's ground war against Gaza.

With so many hotspots to deal with, observers question whether the White House can continue to focus its energies on African investment, although experts including Hanauer argued the U.S. government is adept at juggling a number of tasks at the same time.

Still, some experts note that while the summit may be a positive for Africa, it will make little difference in the United States.

Caroline Freund, a senior fellow at the Peterson Institute for International Economics, noted the United States is by far a more important trade partner to Africa than the continent is to the United States, with Africa comprising a minuscule amount of U.S. trade and the U.S. representing around 17 percent of Africa's trade.

Editor: xuxin
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