U.S. Favors Bilateral Trade Deals With Africa Nations, Nagy Says
U.S. Favors Bilateral Trade Deals With Africa Nations, Nagy Says
(Bloomberg) --
The U.S. favors bilateral trade agreements and will use its first such deal with a country in sub-Saharan Africa as a model for others when the African Growth and Opportunity Act expires in 2025.
“Right now, of course with six years away, it may seem like a long time, but it’s not really a long time for this type of activity,” Tibor Nagy, U.S. assistant secretary of state for African affairs, said in an interview at the AGOA Forum in Abidjan, the commercial capital of Ivory Coast. “All options are on the table” for trade pacts after 2025.
The AGOA accord provides Sub-Saharan African countries duty-free access to the U.S. for more than 7,000 products, ranging from textiles to manufactured items. The U.S. currently only has one free trade agreement on the African continent -- with Morocco -- and while it has identified a number of potential partners in the sub-Saharan region it hasn’t yet announced the preferred candidate.
The value of trade between the U.S. and the region was $41.2 billion last year, making the U.S. its third-largest trading partner. Trade with China was worth 3.5 times more and deals with India were at $55.1 billion.
The recent signing of the African Continental Free-Trade Agreement, which aims to create the world’s largest free-trade area, “introduces yet another major consideration because the administration, as has been said many times, really favors bilateral agreements,” Nagy said.
The mechanics of the continent-wide trade deal will be negotiated in phases and should be fully in operation only by 2030. While these talks are happening and AGOA is still valid, the two accords can complement each other through the requirements of rules of origin, which govern how much of a product needs to be made in a region.
“If there’s trade done within the continent-wide free-trade agreement and it meets the rules of origin, then hopefully the African countries can benefit from that, from sourcing their material from within the continent instead of having it come from other places,” Nagy said.
--With assistance from Katarina Hoije.
To contact the reporter on this story: Leanne de Bassompierre in Abidjan at ldebassompie@bloomberg.net
To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Rene Vollgraaff, Hilton Shone
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