News / Economy

US Eyes Competition with Europe for Africa Trade

Workers arrange fresh roses at the Vermont Flowers export processing zone (EPZ) factory in Kenya's capital Nairobi, March 10, 2011.
Workers arrange fresh roses at the Vermont Flowers export processing zone (EPZ) factory in Kenya's capital Nairobi, March 10, 2011.
Gabe Joselow
The United States is keeping a close watch on potential European trade deals with African nations as Washington reviews its own preferential trade initiative with the continent. African ministers and U.S. officials discussed trade relations at a forum Monday in the Ethiopian capital Addis Ababa.
 
The U.S. is considering an extension to the popular African Growth and Opportunity Act, known as AGOA, an American law that allows sub-Saharan African countries to export certain products to the United States duty free.
 
First signed into law in 2000, the act has already been renewed once, and is set to expire in 2015.
 
U.S. Trade Representative Michael Froman has been meeting with African ministers at an AGOA forum in Addis Ababa to work through the details of a new deal.
 
In a conference call with reporters Monday, Froman said one of the big questions is about the impact of African trade talks with the European Union.
 
“I do think there is a challenging issue before the African partner countries about how to work with us on the renewal of AGOA and how it relates to the negotiations that are ongoing with the European Union for economic partnership agreements,” he said.
 
Unlike AGOA, the EU economic partnership agreements would see African nations reciprocate the benefits of duty-free trade by allowing preferential treatment for European imports into African markets.
 
While the American act only covers exports to the United States, and should not be confused with a free-trade agreement, Froman said questions will be raised in Washington about how U.S. companies will benefit if the law is extended.
 
“I imagine there will be significant skepticism in the United States that we should allow one-way access to our market if our firms are being put at a disadvantage,” Froman said.
 
Ultimately, it is the U.S. Congress that will decide whether to approve an extension of the law, and for what period of time.
 
To qualify for AGOA benefits, eligible countries are supposed to demonstrate they are working to improve rule of law, human rights, and to set labor standards. Currently, 39 countries are eligible.
 
In 2012, trade between AGOA countries and the United States was worth about $67 billion, most of it in the form of oil and natural gas exports to the U.S

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