U.S. and East African Community Join to Increase Trade Competitiveness and Deepen Economic Ties

Obama Administration to Expand Trade Africa Initiative

U.S. Trade Representative Michael Froman and trade ministers from the East African Community (EAC) marked a milestone for Trade Africa today; signing a Cooperation Agreement that will 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 that the United States will begin looking to expand Trade Africa beyond the EAC (Burundi, Kenya, Rwanda, Tanzania, and Uganda).

“Today’s agreement is an important milestone for deepening what has already proven itself to be a promising and impactful partnership,” said Ambassador Michael Froman. “This agreement will help us lift the burdens that trade barriers impose, unlocking opportunity on both our continents.”

The Cooperation Agreement will build capacity in three key areas: Trade Facilitation, Sanitary and Phytosanitary (SPS) Measures, and Technical Barriers to Trade (TBT).  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.

The Trade Africa initiative was announced by President Obama during a visit to Africa in 2013, aimed at supporting greater U.S.-Africa trade and investment, beginning initially with the EAC. 

Trade Africa has contributed to a number of successes in the region -- notably, improvements at the ports of Mombasa and Dar es Salaam, construction of one-stop border posts in East Africa, and more effectively linking the U.S. and EAC private sectors under the U.S.-EAC Commercial Dialogue.

The Obama Administration is now looking to expand Trade Africa beyond the EAC, laying the foundation for a more mature and comprehensive 21^st century U.S.-Africa trade and investment relationship over the medium to long term.

“We see this agreement and all our work with the EAC to date as an important steppingstone, not the final destination,” Ambassador Froman added. “The global economy is evolving and the U.S.-Africa economic relationship must evolve, too. Together, we can tackle more tasks, support more jobs, and unlock more opportunities for the American and African people alike.”

The Office of the USTR has also worked closely with the Commerce Department to ensure a strong and vibrant private sector voice to expanded U.S.-African trade.  Following the morning session, the Commerce Department will host the first U.S.-East Africa Commercial Dialogue, which will develop joint public-private sector initiatives to boost our trade and investment in the region by focusing on issues such as through customs modernization, electronic payments, cold chain development and access to capital, among others. 

During a series of meetings following this signing, the U.S. and the EAC governments, private sector, and other stakeholders also discussed the strategic way forward for the U.S.-EAC trade and investment relationship, including the need for a seamless renewal of AGOA; discussed a regional strategy to help the EAC countries to take better advantage of AGOA; and held the inaugural meeting of the U.S.-EAC Commercial Dialogue with the U.S. and EAC private sectors. 

The United States is committed to using all the tools at its disposal to help support greater African regional economic integration and U.S.-African trade and investment to help create jobs and opportunities for the American and African people alike.

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FACT SHEET: The United States – East African Community Cooperation Agreement

The East Africa Community (EAC), comprised of Burundi, Kenya, Rwanda, Tanzania, and Uganda, is one of the leading regional economic organizations in sub-Saharan Africa and has made great strides in recent years toward integrating the economies of its partner states. It has established a free trade area and a customs union, and is working toward a common market. 

THE U.S.-EAC COOPERATION AGREEMENT

The U.S.-EAC Cooperation Agreement on Trade Facilitation, SPS, and TBT commits both the EAC and the United States to three objectives:

IMPLEMENT THE WTO’s TRADE FACILITATION AGREEMENT

• The Agreement commits the parties to cooperate on customs issues, including the implementation of the World Trade Organization (WTO) Trade Facilitation Agreement, reducing red tape and unnecessary formalities at borders decreasing border release times, and implementing other positive reforms laid out in the WTO Trade Facilitation Agreement to help streamline and facilitate trade.    This will build on the EAC’s own work on customs reforms, which have resulted in substantial reductions in the time and costs of moving goods across borders within the EAC.  For instance, container transit times from Mombasa, Kenya, to Kigali, Rwanda have declined from 21 days several years ago to six days, while associated transport costs are down by over $1,700 per container. 

ENHANCING FOOD SAFETY, PLANT AND ANIMAL HEALTH

• The Agreement provides for U.S.-EAC cooperation and capacity building related to food safety and animal and plant health standards. While a majority of the region’s people are involved in agricultural production or processing, the export potential of these products is currently limited. The Cooperation Agreement will help the EAC meet international standards by bringing U.S. technological expertise to bear and fully implement the WTO Agreement on Sanitary and Phytosanitary Measures, which will help the EAC Partner States increase food security and create additional export opportunities for products produced in the region. 

• BUILD CAPACITY TO MEET GLOBAL STANDARDS

  • The Agreement provides for U.S.-EAC cooperation and capacity related to technical regulations, standards, testing, and certification – for example, by helping to train East African standards officials and developing electronic systems for engaging the public and interested stakeholders on new proposed technical regulations.  This will help increase the EAC partner States’ ability to meet international quality and safety standards by improving full implement of the WTO Agreement on Technical Barriers to Trade.  Both U.S. and African international competitiveness is enhanced when countries meet international standards and avoid unnecessary differences among technical regulations and standards developed independently and separately by each nation, national standards organization, or company. 

  PROGRESS RESULTING FROM TRADE AFRICA INITIATIVE

  • Enhanced U.S.-EAC private sector engagement under the Commercial Dialogue.  [The Department of Commerce will issue a separate press release outlining new private sector commitments under the Commercial Dialogue, not sure if we can have a link to their press release, or simply note that it is forthcoming.]
  • The establishment of a new five-year, $64 million Trade and Investment Hub in East Africa focused on: i) increasing exports under AGOA to the United States, to regional partners, and to the rest of the world, ii) facilitating investment and access to the newest technologies and expertise to priority development sectors, iii) expanding and diversifying regional agricultural trade and food security, and iv) supporting the implementation of regional integration policies adopted by the EAC. 

  The United States has $2.8 billion in total (two way) goods trade with the Eastern African Community (EAC) during 2014. Exports totaled $2.0 billion; Imports totaled $743 million.

  Total trade in goods grew by 52% in the last year and 103% in the last five.  U.S. goods exports to these countries grew by 66% in the last year, and 106% between 2009 and 2014. Exports of goods from Africa to the U.S. from EAC grew by 24% in 2014 from 2013 and 93% over the last 5 years. 

*Source USTR News