Increased trade is one of the drivers of Africa’s extraordinary average annual growth rate of 5.1 percent over the past decade. Growth driven by trade and accompanied by complementary policies and good governance creates good jobs and reduces poverty, and a growing, increasingly integrated Africa with strong trade and economic ties with the United States benefits all partners and citizens.

In July 2013 President Obama launched Trade Africa – a new whole-of-government partnership between the United States and sub-Saharan Africa that seeks to expand trade between the United States and African countries – including by better utilizing the benefits of AGOA – as well as among African countries. The United States is committed to strengthening its trade and economic ties with African partners, and AGOA continues to be a cornerstone of this partnership.

“Africa’s progress will depend on unleashing economic growth – not just for the few at the top, but for the many, because an essential element of dignity is being able to live a decent life. That begins with a job. And that requires trade and investment.” – President Obama at African Union Headquarters, Addis Ababa, Ethiopia, July 28, 2015

In its initial phase, Trade Africa focused on the Partner States of the East African Community (EAC) featuring an ambitious set of goals:

• Double intraregional trade in the EAC.

• Increase EAC exports to the United States by 40 percent.

• Reduce by 15 percent the average time to import or export a container from the ports of Mombasa in Kenya or Dar es Salaam in Tanzania to the land-locked interior.

• Decrease by 30 percent the average time a truck takes to transit selected borders.

To achieve these goals, U.S. assistance supports trade capacity building, value-added production, value chain development, regional trade, trade with U.S. and global markets, and investment. It also advances the goals of the Feed the Future initiative to expand regional access to, and availability of, staple foods grown in Africa, thus promoting food security. The initiative is closely linked to U.S. trade policy toward sub-Saharan Africa to promote reciprocal agreements and trade relations that benefit all partners.

U.S. Trade Representative Michael Froman and trade ministers from the EAC marked a milestone for Trade Africa in 2015 by signing a Cooperation Agreement to increase trade-related capacity in the region and deepen the economic ties between the United States and the EAC. During the ceremony, Ambassador Froman announced:

“Today’s agreement builds on our progress. It’s an important milestone for deepening what has already proven itself to be a promising and impactful partnership. By tackling tasks in important areas, this agreement will help us lift the burdens that trade barriers impose, unlocking opportunity on both our continents.”

The Cooperation Agreement builds capacity in three key areas: trade facilitation, sanitary and phytosanitary measures, and technical barriers to trade. Implementing critical customs reforms, harmonizing standards, and undertaking multilateral commitments will support greater EAC regional economic integration and strengthen its trade relationship with the United States and other global partners.

In addition, following the signing, the initiative was expanded to West and Southern Africa, with bilateral programs in Côte d’Ivoire, Ghana, Mozambique, Senegal, and Zambia to implement WTO and regional protocols. Trade Africa is also supporting the Economic Community of West African States (ECOWAS) in the areas of trade facilitation and sanitary and phytosanitary standards. The entire initiative now exceeds $150 million investment by the U.S. Government.

Program Impacts

The U.S. Government implements most of its Trade Africa programs through its three Trade and Investment Hubs, bilateral programs in the expansion countries, and interagency agreements. The Office of the U.S. Trade Representative, U.S. Department of State, USDA, U.S. Department of Commerce, OPIC, EXIM, MCC, USAID, USTDA, USDOT, CBP, and Small Business Administration all implement policies and programs that foster the goals of the initiative.

From July 2014 through 2016, the Trade and Investment Hubs facilitated more than $283 million in African exports and $140 million in investment under Trade Africa. In East Africa, the initial focus of the initiative, the results over the past three years have exceeded most of Trade Africa’s targets:

• EAC exports to the United States increased by about 36 percent between 2013 and 2015, and in the past five years, by 95 percent.

• The average time to trade goods across borders along the Northern Corridor, from Mombasa, Kenya, to Kampala, Uganda, decreased from 18 days in 2013 to four days in 2014 – a 77 percent reduction. From Mombasa to Kigali, Rwanda, it declined by 71 percent, from 21 days in 2013 to six days in 2014. And, on the Dar es Salaam, Tanzania, to Kigali route, it decreased by 80 percent, from 25 days in 2013 down to five in 2014.

• Since 2013, the East Africa Trade and Investment Hub helped generate about 29,000 new jobs through $27 million in new investments in targeted sectors and over $163 million in exports under AGOA.

Looking forward

In its initial phase, Trade Africa made significant gains in facilitating regional integration and improving economic linkages with U.S. and other global markets through trade and investment and trade facilitation. This includes targeted efforts to reduce the cost and time to trade, reduce the technical barriers to trade, improve trade competitiveness, promote an enabling environment for trade and investment, and improve access to credit by deepening the financial sector. Strong partnerships among the U.S. Government, sub-Saharan African trading partners, and the private sector made these gains possible.

AGOA has served as a foundation for U.S. trade policy toward sub-Saharan Africa since 2000. Going forward, the Trade Africa model can continue to play a vital role in advancing policies that enhance AGOA utilization and can promote building blocks in additional policy areas – and with additional partners – in order to deepen our trade and investment relationship further, perhaps beyond AGOA.

The initiative’s guiding principles:

1. Regional Integration, Creation of Regional Markets, and an Increase in Intraregional Trade. Regional integration and creation of regional markets are key to raising competitiveness, diversifying the economic base, and promoting food security – benefiting both African consumers and the United States. USAID is working with RECs and national governments to reduce the barriers to trade and investment flows across the continent. In particular, the U.S. Government continues to promote trade facilitation, customs modernization, and standards harmonization; support regulatory coherence and transparency; improve infrastructure that strengthens regional trade and access to global markets; and explore ways to remove impediments to the efficient operation of supply chains in the region.

2. Improvement of Trade and Investment Linkages with the United States. Building on AGOA and United States trade policy, Trade Africa is promoting trade and economic ties with the United States, using opportunities under AGOA and potential trade agreements with African partners.

3. Value Addition and Integration into Regional and Global Value Chains. USAID is promoting investment and value addition, particularly in agriculture, that can increase competitiveness, foster links to global and regional value chains, and create jobs.

4. Encouragement of Regulatory and Institutional Reforms that Improve the Business Climate and Enabling Environment for Trade and Investment. The initiative is working with governments, the private sector, advocacy groups and multilateral organizations to improve the business climate for investment, trade, and private sector development.

5. Diversification of the Export Mix. Commodity and oil exports now account for a major share of sub-Saharan African exports. Trade Africa is therefore helping African countries diversify their export base by investing in new value chains and/or products exploiting Africa’s comparative advantages. The newly developed mango value chain in West Africa is a case in point.

6. Improvement of Access to Finance. The U.S. Government continues to work to improve access to finance and financial sector deepening through various mechanisms, such as the Development Credit Authority. This includes facilitating improvement in host government policies to increase access to credit.