Addis Ababa, 20 February 2019 (ECA) – According to the Economic Commission for Africa, the United States and other foreign investors potentially have a very important role to play in accelerating the emergence of regional value chains and in increasing volumes of intra-regional trade on the continent.
Andrew Mold, Acting Director of ECA in Eastern Africa, told the U.S.-Africa Trade and Investment Forum that the African Continental Free Trade Agreement (AfCFTA) could help strengthen regional production systems, and support the integration of Regional Economic Communities like the East African Community.
Mold stressed that this was a role that US firms played very well in the European Union, by integrating their operations across borders even in anticipation of the Single Market Programme in the 1990s. It is a role that they could also play in the African continent, he argued.
The U.S.-Africa Trade and Investment Forum was held in Addis Ababa on the sidelines of the February 2019 African Union summit. The forum brought together African and U.S. private sector officials to engage in conversations related to what is to succeed AGOA – the Africa Growth and Opportunity Act – which expires in 2025.
The suspension of Rwanda from certain provisions of the AGOA because of a disagreement over its policy designed to reduce imports of second-hand clothing was discussed at the forum. Participants stated the threat of suspension made it difficult to make long-term plans to invest in a beneficiary sector when it was uncertain whether preferential market access will still exist in the future or not.
Mold explained that the AfCFTA is different.
“It is fundamentally putting trading relations among African countries on a much firmer footing, especially during the time of increased trade protectionism in some developed countries” he said.
The AfCFTA, as an integrated continental market, could provide Africa with a strengthened voice of 1.2 billion people in future negotiations with other countries and regional blocks.
Economic Commission for Africa
PO Box 3001
Tel: +251 11 551 5826