1 May 2018

Nigeria: Trump to Buhari - 'Remove All Barriers to U.S. Trade'

Photo: The Guardian
Cargo

In a move that may signal the beginning of the African phase of ongoing trade dispute, President Donald Trump announced Monday that his administration has started talking with President Buhari "about taking down the trade barriers" impeding the United States' trade with Nigeria.

Speaking at a joint press conference with the visiting Nigerian leader at the White House, Mr. Trump said the "United States is currently working to expand trade and commercial ties with African nations, including Nigeria.

"We hope to be the economic partner of choice for nations across the continent and all around the world."

Mr. Trump did acknowledge that Nigeria is one of the United States' largest trading partners in Africa and that the Nigerian business climate has improved under Mr Buhari's anti-corruption watch; but he wants Nigeria to rip "down those trade barriers" to pave way for "growing our trade relationship on a principle of fairness and reciprocity."

The two presidents came out to the White House Rose Garden at about 1:35 p.m. local time in Washington DC to address the press. Though President Trump did not name the trade barriers he wants Nigeria to undo, the demand echoes similar allegations of unfair trade practices and tariff dispute with China, Japan, Canada, European Union, Mexico and other countries. On March 1 this year, the Trump administration imposed tariff on steel and aluminum which, incidentally, were supposed to go into effect after midnight on April 30, approximately twelve hours after the press conference. The White House has since announced a 30-day reprieve on the tariffs.

Some recent figures from the United States Department of Commerce show that Nigeria enjoyed a slight surplus in trade with the United States in 2016. Nigeria was the United States' 60th largest goods export market that year. Of the estimated $9.0 billion trade in goods and services, U.S. exports to and import from Nigeria totalled $4.4 billion and $4.6 billion respectively, giving Nigeria a surplus of $216 million.

It is not clear if the administration is concerned about the deficit, President Trump made no reference to it in his speech. What he did mention was U.S. aid to Nigeria.

"We give Nigeria well over one billion dollars in aid every year", he said. And in a tone that emphasises his 'America first' campaign promise, Mr. Trump seemed to suggest that the aid dollar entitles the United States to privileged trade status with Nigeria.

"We think we are owed that," he said, adding that dismantling the barriers will create a level playing field and make it easier for U.S. companies to invest "substantially in Nigeria."

But Peter Pham, Director of Africa Center at the Atlantic Council sees a bigger role for Nigeria under the Trump administration if Mr Buhari accepts Mr Trump's fair trade demands.

"Earlier this year, in January, US Trade representative, Ambassador Robert Lighthizer pointed out that the US is considering developing a model trade agreement with an African country - he didn't specify which one - to serve as a template for other trade agreements," said Mr Pham, "if you look at the 54 nations in Africa, the U.S. only has a free trade agreement with Morocco."

"Nigeria because of its size, its population, its role in ECOWAS, its geography and the already existing ties between the business sector in both countries, certainly is a major candidate for such an agreement."

The White House's invitation to Mr Buhari is indicative of the Trump administration's interest in forging a strategic partnership with Nigeria, says Mr Pham.

"It's a recognition of Nigeria's importance to the United States that the first sub-Saharan president to be received at the [Trump] White House is President Buhari who is not only democratically elected but also represents Africa's most populous country and its largest economy."

President Buhari did say he came to Washington "at the kind invitation of President Trump" but did not respond directly to Trump's demand for trade reform.

"Our aim is to diversify our economy by focusing on agriculture and food security, power and infrastructure," he added.

Like the other countries targeted for what the Trump administration calls unfair trade practices, Nigeria-U.S. trade relations links did not seem to need any reform until President Trump said so.

"Last year, Nigeria purchased a little over $2 billion in imports from the U.S. which makes the U.S. the third largest source of imports into Nigeria. During the strategic dialogue between the U.S. and Nigeria, a memorandum of understanding was signed to launch commercial and investment dialogue", said Mr Pham. On this trip, President Buhari was also scheduled to finish negotiation for Nigeria's $2 billion railway project, that would increase American investment in Nigeria led by General Electric even more.

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