If it were not for former Massachusetts Governor Mitt Romney’s brief mention of Mali, Latin America and China, I would have forgotten that other regions and issues exist in terms of foreign policy. Monday night’s foreign policy debate focused mainly on the Middle East and North Africa.
Whereas the foreign policy discussions focused on national security threats, it ignored U.S. efforts to build bridges with other regions, such as throughout the continent of Africa, to promote economic development and stability. What does the U.S-African economic relationship look like? Why is it important?
It is important to also turn our attention towards Africa, because it is an emerging market. Whereas, other countries such as China, Greece, Spain and the United States are facing economic slowdown, the African region is actually experiencing a continuous and quick economic upturn.
For example, the region has experienced an annual GDP growth of 4.9 percent per year from 2000 to 2008. The McKinsey Global Institute, a global management consulting firm, reports:
Africa’s growth acceleration was widespread, with 27 of its 30 largest economies expanding more rapidly after 2000.
Unfortunately, few businesses are taking advantage of this fast-growing market.
U.S. policy presents some opportunities to expand trade with Sub-Saharan Africa. The United States currently has a unilateral trade deal with eligible Sub-Saharan African countries–African Growth and Opportunities Act (AGOA). AGOA allows eligible Sub-Saharan African countries to export their goods to the United States duty-free.
The United States just renewed the Third Country Fabric Provision of AGOA, which allows apparel manufacturers from eligible countries to use inputs from any country around the world and export the final garment to the United States duty-free. This provision has been extremely beneficial to apparel exporters from countries such as Lesotho seeking access to the U.S. market.
Outside of the Sub-Saharan African region, the United States has a bilateral free trade agreement with Morocco. The US-Morocco FTA was signed in 2004 and took effect in 2006. The United States currently has a $1.9 billion trade surplus with Morocco. Both US and Moroccan exporters have duty-free access to each other’s market.
Whereas Governor Romney focused on expanding trade with Latin America, which I agree is a significant market and presents economic opportunities for both the United States and Latin American countries, we should also turn our attention towards the African market. Discussions on global political and economic strategies should include a greater focus on the continent of Africa and its fast growing economy.
Keep up with these debates through a free subscription (see top right corner to follow), Facebook and twitter (@intltradexaminr).
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License