America.gov (Washington, DC)
Charles W. Corey
16 July 2008
The United States trade representative, Ambassador Susan Schwab, and her counterparts from east and southern Africa signed two important trade and investment agreements that will further deepen and expand U.S. trade ties with those regions.
One agreement marks the first trade, investment and development cooperative agreement (TIDCA) with the Southern African Customs Union (SACU).
Schwab participated in the signing with SACU trade ministers from Botswana, Lesotho, Namibia, Swaziland and South Africa. The ministers were in Washington attending the seventh annual African Growth and Opportunity Act (AGOA) Forum, July 14-16.
"This important agreement will provide a framework for the United States and SACU to work together to create the building blocks that could lead to a free trade agreement (FTA) in the long term," Schwab told the ministers, business executives and diplomats in attendance.
"Before we address the issues of an FTA, we are using the new TIDCA to expand market access, strengthen the links between trade and economic development strategies, encourage greater foreign investment and promote regional economic integration and growth," she said.
The TIDCA will be a formal mechanism for the United States and SACU to conclude a range of trade-related agreements, cooperative work and other trade-enhancing initiatives. It also will allow the United States and SACU to develop work plans on key issues such as food safety standards and technical barriers to trade and investment promotion that should lead to increased U.S.-SACU trade and investment in the near future.
Speaking for SACU, Executive Secretary Tswelopele C. Moremi called the agreement "an important step in reaching a long-term and sustainable trade relationship" between the region and the United States that will improve investment flows on both sides.
Popane Lebesa, Lesotho's minister of trade and industry, called the signing an "important milestone" that puts trade and investment on a stable platform for further development.
The United States and SACU launched FTA negotiations in 2003, but the talks were suspended in April 2006, largely due to differing views on the scope of the agreement. In November 2006, the United States and SACU agreed to pursue a new type of agreement -- a TIDCA -- that could enhance the U.S.-SACU trade and investment relationship in the short term and help lead the United States and SACU to a possible FTA in the longer term.
SACU is the United States' largest non-oil trading partner in sub-Saharan Africa, with bilateral trade valued at $15.8 billion in 2007. SACU is also the largest beneficiary of the AGOA, with American imports valued at $2.9 billion, including a wide range of goods such as automobiles, minerals and metals, diamonds, agricultural products, chemicals, transportation equipment, footwear, textiles and apparel.
At the same ceremony, Schwab signed a trade and investment framework agreement (TIFA) aimed at deepening U.S. economic engagement with the East African Community (EAC). She said the agreement takes "a major step toward deepening the U.S.-EAC relationship."
"The EAC is one of the leading regional economic organizations in sub-Saharan Africa," Schwab told her audience. "It is making significant progress in opening up regional trade and advancing economic integration among its members. We see the TIFA as a major step toward deepening the U.S.-EAC trade and investment relationship, expanding and diversifying bilateral trade, and improving the climate for business between U.S. and East African firms."
EAC Director-General for Customs and Trade Peter Kiguta signed the agreement on behalf of the EAC. The signing was witnessed by trade ministers and other senior officials from EAC member states Burundi, Kenya, Rwanda, Tanzania and Uganda. He told his audience the signing marks "a momentous occasion" and will play "a groundbreaking role" in advancing trade relations.
Also speaking for the EAC countries was Vincent Karega, Rwanda's minister of state, trade and industry. He said the EAC agreement sends a strong message of business partnership and pledged that member states will continue to reform their economies to further improve trade and investment.
The TIFA will establish regular, high-level talks on the full spectrum of U.S.-EAC trade and investment topics, including the African Growth and Opportunity Act, the World Trade Organization's Doha round of trade negotiation, trade facilitation issues and trade capacity-building assistance.
The East African Community was established in 1999 by Kenya, Tanzania and Uganda. Rwanda and Burundi joined in 2007. The EAC has established a free trade area and customs union among its members and is working toward a common market. Bilateral trade between the United States and the EAC region exceeded $1.2 billion in 2007. U.S. imports from EAC members under AGOA and the Generalized System of Preferences totaled $265 million in 2007. All five member states of the EAC are eligible for trade benefits under AGOA.
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