March 5, 2015

Trade ministers from the East African Community and U.S. Trade Representative Michael Froman signed a major trade cooperation agreement that would help advance President Obama’s trade initiative in the East African region and tighten U.S.-Africa economic relations across the continent.

“We see this agreement and all our work with the EAC to date as an important stepping stone, not the final destination,” Ambassador Froman said in a statement. “The global economy is evolving and the U.S.-Africa economic relationship must evolve, too.”

He added that the agreement, built on the Trade Africa Initiative, which was first announced during President Obama’s 2013 visit to Africa, will help lift trade barriers and unlock opportunity on both continents, opening ways for more trade-related capacity.

Ambassador Froman said the U.S. will begin to use the five-nation deal comprised of Burundi, Kenya, Rwanda, Tanzania and Uganda, known as the EAC Cooperation Agreement, to expand to other African nations.

Following the signing of the deal in the U.S. capital, EAC and U.S. negotiators, government officials, private sectors and other stakeholders held a marathon meeting session to discuss strategies on how to close the remaining trade gaps between the two continents, including making sure there’s a seamless renewal of AGOA, a critical step for the broader U.S.-Africa trade relationship, and concluded the inaugural meeting of the U.S.-EAC Commercial Dialogue.

“Today’s agreement is an important milestone for deepening what has already proven itself to be a promising and impactful partnership,” Ambassador Froman said. “An important part of upgrading our relationship is renewing and modernizing AGOA as quickly as possible.”

He added that “prompt renewal is critical because many businesses plan their orders six, even 12 months in advance, and waiting until the 11th hour to renew AGOA will result in jobs lost, factories closed and investment deferred—all of which undermine our goal for a stronger U.S.-Africa economic relationship.”

Ambassador Froman’s office and the Obama administration have been working closely with the U.S. Congress on AGOA renewal and how to extend it long term to make it more effective for maximum impact.

The AGOA renewal is a top priority in Ambassador Froman’s bid to restructure and build capacity on U.S.-Africa’s trade relationship. Its success is essential to future trade and investment strategy between the two continents.

Last year, the United States had $2.8 billion in total goods trade with the Eastern African Community. Exports totaled $2 billion; imports totaled $743 million. Total trade in goods grew by 52 percent in the last year and 103 percent in the last five year.  U.S. goods exports to these countries grew by 66 percent in the last year, and 106 percent between 2009 and 2014. Exports of goods from Africa to the U.S. from EAC grew by 24 percent in 2014 from 2013 and 93 percent over the last five years.

Ambassador Froman’s office, the U.S. Commerce Department and their African counterparts and private sectors have worked to make sure this new U.S.-EAC agreement allows for mutual, reciprocal trade relationships, benefits and dialogues.

Regarding the new agreement, on the table are Washington’s demands that EAC implement the World Trade Organization trade facilitation agreement by modernizing its customs, implementing electronic payment systems at its borders, and other reforms that will help eliminate or reduce unnecessary formalities at the borders, opening ways for time and cost efficacy in transiting goods across borders.

The new comprehensive agreement also include a establishment of a new five-year, $64 million Trade and Investment Hub in East Africa that will focus on: Increasing exports under AGOA to the U.S., African regional partners and to the rest of the world; Facilitating investment and access to the newest technologies and expertise to priority development sectors; Expanding and diversifying regional agricultural trade and food security, and Supporting the implementation of regional integration policies adopted by the EAC.

In return, the U.S. promises to offer technical expertise and to train farmers and agribusinesses in the region to help attain international standards that will in return boost food security and create added export potential of agricultural products from the region.

The two parties plan to build capacity to meet global standards that will help EAC partner nations meet international quality and safety standards.

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