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Senator: US Losing Ground to China on Africa Trade, Investment

  • Reuters

A Chinese engineer supervises at a construction site in Sudan's capital Khartoum (2012 photo)

A Chinese engineer supervises at a construction site in Sudan's capital Khartoum (2012 photo)

A U.S. senator on Thursday called for early renewal of trade benefits for Africa as part of a broader strategy to counter growing Chinese investment and influence on the continent of nearly one billion people.

"America is losing ground and ceding economic opportunities in Africa to competitors,'' Senator Chris Coons, chairman of the Senate Foreign Relations Subcommittee on African Affairs, said in a report issued by his office.

"China, which has made dramatic inroads across the continent in recent years, may undermine or even counter value-driven U.S. goals in the region, and should serve as a wake-up call for enhanced American trade and investment,'' the Delaware Democrat said.

Kenyan Ambassador to the United States Elkanah Odembo underscored that point at a press conference with Coons and U.S. business groups.

"Ten years ago, trade between Africa and China was about $15 billion. By the end of this year, it will be about $200 billion. That speaks volumes,'' Odembo said.

"Foreign direct investment in the past 10 years has gone from $15 billion to close to $50 billion today ... and a very small proportion of that comes from the United States,'' he said.

The United States "probably has a small window in the next couple of years before China, India and Brazil take over all the ownership on the continent and trade relations are theirs to own,'' said Scott Eisner, vice president of African affairs at the U.S. Chamber of Commerce.

"What we need to do is make Africa a national priority'' because countries naturally align themselves politically with other countries that provide investment, said Stephen Hayes, president of the Corporate Council on Africa.

Coons urged early renewal of the African Growth and Opportunity Act, which is set to expire in September 2015, and said he hoped a bill could be introduced for Senate Finance Committee consideration by the end of the year.

That legislation, first passed by Congress in 2010, waives U.S. duties on African goods to help create jobs in 40 sub-Saharan African countries. Last year, it helped boost total U.S.-African trade to about $110 billion.

Coons also recommended revamping the program to encourage countries to take greater advantage of the duty-free treatment.

Currently, oil from African producers such as Nigeria and Angola accounts for 88 percent of the value of U.S. imports under the AGOA program.

Coons' report also called for the United States to develop a "coherent, integrated strategy'' to improve the business climate on the continent through removing barriers to trade, reducing corruption and enhancing regional economic cooperation.

The time is right because Africa is home to at least six of the world's 10 fastest growing economies and increasing business ties would also enhance U.S. national security, Coons said.

The International Monetary Fund has forecast the region to grow five percent this year, while the World Bank has said Africa could be "on the brink of an economic takeoff, much like China was 30 years ago and India 20 years ago,'' the report said.

Other recommendations included increasing the number of U.S. Foreign Commercial Service officers in sub-Saharan Africa to help companies navigate the business climate.

It also called for U.S. agencies like the Export-Import Bank and the Overseas Private Investment Corp to step up activity in the region in support of U.S. exports.

The U.S. government should also engage Africans living in the United States in efforts to strengthen ties with the continent, the report said.