The United States Federal government has given business people and exporters in the East African Community (EAC) a first crack at imposing their will on the US market as part of Trade Africa Initiative.

This is a chance for the EAC to show off what it can do. After all, the US chose East Africa first, probably because compared to other regions in sub-Saharan Africa, it is making far faster progress towards economic integration. We should play this card constantly to drum up large investment from the US in the future.

As a key aspect of President Barack Obama’s Africa policy, the Trade Africa Initiative is supposed to be a partnership between the US and sub-Saharan Africa to increase internal and regional trade within Africa, and expand trade and economic ties among Africa, the United States, and other global markets.

A notable sentiment said by Michael Froman, during the formal siging of the agreement with EAC representatives in Washington, was that the deal will the streamline customs process. It will also help African exporters meet global standards on food protections and reduce other technical barriers to trade.

During its initial phase, Trade Africa aims to double intra-regional trade in the EAC, increase EAC exports to the US by 40%, reduce by 15% the average time needed to import or export a container from the ports of Mombasa or Dar es Salaam to land-locked Burundi and Rwanda in the EAC’s interior, and decrease by 30% the average time a truck takes to transit selected borders.

The EAC is already well advanced in achieving some of these objectives. For example, transit times for goods being moved between Mombasa and the hinterland states, are rapidly being scaled down. Secondly, duplication of paperwork and the bureaucracy at border points is substantially less. Electronic methodoly has also been a big help although the systems occasionally have breakdowns.

According to the Americans, Trade Africa will help mobilize resources to support increased US-EAC trade and investment, building upon the Trade and Investment Partnership announced in June 2012. Activities include exploring a US-EAC Investment Treaty to contribute to a more attractive investment environment.

• Establishing a new US–EAC Commercial Dialogue to bring the private sector together with policy makers and increase opportunities for trade and investment.
• Operating US–Africa Trade Hubs that provide information, advisory services, risk mitigation and financing to encourage linkages between U.S. and East African investors and exporters.
• Advancing the ‘Doing Business in Africa’ campaign to encourage US businesses to take advantage of growing trade and investment opportunities and to promote trade missions, reverse trade missions, trade shows, and business-to-business matchmaking in key sectors.

There is even provision for stimulating greater trade in goods under the African Growth and Opportunity Act (AGOA) and to:

• Build the capacity of private sector associations in Africa to provide sustainable business services and promote investment in key growth sectors in Africa, including agriculture, health, clean energy, environment and trade-related infrastructure
• Formalize partnerships between American and African associations to increase trade through collaboration on trade shows and business-to-business matchmaking
• Work with governments and National Export Associations to develop export strategies and establish export resource centers across the EAC to provide sustainable services for firms looking to export under AGOA.

Like most good intentions, the success of this new agreement lies in the details. But for East Africans, getting American partners would be the easiest route into the US market.

Source: Business Week

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.