In late February, the United States signed a trade deal with the East African Community (EAC), the bloc of five countries around Africa’s Great Lakes. In an email interview, Nora Carina Dihel, a senior trade economist at the World Bank, discussed U.S. trade with the EAC and the rest of Africa.

WPR: What is covered by the recent U.S. trade deal with the EAC, and what impact is it likely to have on the economies of the EAC?

Nora Carina Dihel: The new cooperation agreement signed by trade ministers from the five EAC countries—Burundi, Kenya, Rwanda, Tanzania and Uganda—and the U.S. Trade Representative aims at streamlining customs procedures and providing technical assistance to promote trade by facilitating initiatives on sanitary and phytosanitary measures, which cover food safety and animal and plant health, as well as technical barriers to trade. Specifically, the agreement seeks to reduce red tape at the borders, decrease customs wait times and enhance the capacity of EAC countries to apply common international standards on various products, including agricultural exports.

By building capacity in these three key areas, the agreement is expected to deepen U.S.-EAC trade and investment ties and increase the EAC countries’ capacity to adopt international standards by helping them implement World Trade Organization agreements.

The deal has the potential to boost EAC initiatives to reduce trade costs and accelerate regional integration by supporting EAC countries in their efforts to eliminate non-tariff barriers that fragment the regional market and develop appropriate standards at the regional level. Finally, this pact can pave the way for the development of a new EAC strategy to boost the region’s exports through an improved African Growth and Opportunity Act (AGOA), which offers incentives for African countries to open up their economies, including duty-free access to U.S. markets. Given that AGOA expires on Sept. 30, 2015, the legislation needs to be renewed by the U.S. Congress as soon as possible to increase trade opportunities for all partners.

WPR: How does the U.S. trade deal compare with other deals the EAC has signed, notably with China?

Dihel: Africa’s great market potential, and in particular the EAC’s, is recognized by many international partners that are adapting their engagement strategies with the continent in mind. For example, through its framework agreement with the EAC, China promotes commodities trade, the exchange of visits by businesspeople from the EAC and China, investment cooperation, infrastructure development and human resource development and training.

The new U.S. approach goes beyond preferential tariff access, focusing on regulatory standards and non-tariff barriers in order to engage with the EAC through market-enabling assistance and closer work with the private sector, which could bring significant gains to all sides in the coming years.

WPR: How do this and other trade deals figure into broader U.S. policy for engaging Africa more actively?

Dihel: The agreement builds on U.S. President Barack Obama’s “Trade Africa” initiative, a partnership between the U.S. and countries in sub-Saharan Africa intended, according to the White House, to “expand trade and economic ties among Africa, the United States and other global markets.” At this stage, while exclusively focused on the EAC, it is an important element of U.S. trade and commercial engagement strategy with the continent.

The agreement can become a useful complement to a renewed and modernized African Growth and Opportunity Act, enhancing the U.S.-African relationship through more cohesive trade and investment and regulatory cooperation and capacity-building in both goods and services.

Source: World Politics Review

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.