Between America and China? Hard choices facing Africa

Posted on August 16, 2014 11:38 am

Two weeks ago in Washington D.C., business leaders and policy makers from Africa attended the first ever U.S.-Africa Leaders Summit that has been considered by its proponents as an enormous success and its detractors as just ‘another US fire fighting’ publicity stunt. Before the start of the meeting, observers had raised repeated concerns about whether the American summit represents a challenge to the hugely popular Chinese foray in Africa hat have been ongoing since 2010 when it overtook United States as Africa’s largest trading partner. Some are concerned that African countries will have to choose between the two sets of partners who are fighting for the world’s next growth frontier, a mutually exclusive choice between a China-centric trade engagements and a US-centric trade agreements and engagements tagged with human rights and good governance. Others posit that Africa countries can make that choice based on tactical concerns and progress in negotiations. Having extensively traveled across sub saharan Africa, most of the concerns regarding competing and incompatible trade engagements are based on fundamental misunderstandings of both the breadth and depth of the two super powers. The specific rules contained in these trade agreements also vary significantly, such as the rules of origin which determine which goods qualify for preferential tariff rates. Furthermore, just as the China has provided an opportunity for African countries to harmonise their terms of trade with it, the United States of America also provides an opportunity for African countries trading partners to harmonise their terms of trade with Uncle Sam.

To put it more prosaically, the practicalities of trade negotiations mean that African countries will have to give priority to their developments issues before considering the United States as the main trading partner. African countries such as South Africa, Tanzania, Nigeria and Kenya, who have already done this, will find it easier to “walk and chew gum at the same time,” to use an American aphorism. Those that haven’t, like Cameroon, Angola, Ghana, Ethiopia will need to follow another American aphorism of “learning to crawl before they can walk.” The various Africa Free Trade Agreements are actually framework agreements for bilateral. Yet although the terms of such agreements may be consistent with the main framework agreement, their implementation by individual African members may not be consistent. Just as vexing is that implementation may be inconsistent not only with the African bilateral trade agreements, but with the intra-Africa agreements themselves, such as the AGOA with United States the continent stands to benefit more through retention of existing jobs in a continent with chronic job shortage. Thus the United States Summit was focused more on harmonisation of existing rules and their application within the various African countries trade agreements.

This is much more ambitious than the China’s agenda, which doesn’t cover many items covered by the Washington Summit, such as jobs, intellectual property rights, energy, environmental protection, labor, financial services, technical barriers and other regulatory issues. Yet given the inconsistencies that currently exist in the various African- US relations, even this harmonisation of existing obligations is no less important. In fact, the external influence provided by the African trading partners may even supply the discipline and rigour needed for Africa to implement the much needed economic reforms. The China- Africa relations are primarily focused on measures imposed at the national borders and how to harmonise those measures. The US-Africa relations on the other hand, is a much more ambitious negotiation in terms of scope because it covers a wide variety of barriers to trade and investment which occur beyond national borders. It also covers issues that African countries have not yet covered in their intra-African agreements, such as labor, environment and intellectual property. Hence the American option presents African countries with a different set of issues than the China does, meaning that the two negotiations are not conceptually incompatible. The negotiating dynamics and timing of the China-Africa and America-Africa also impact how African countries approach the two sets of talks and other engagements. How African member states approach United States and the Chinese therefore does not depend on political, economic or security matters with regard to China and the US in my opinion. Either way, the work necessary to square these circles has to begin now and if well managed, African stands to gain.

Contador Harrison