During his campaign for presidency, Donald Trump centered his trade proposals on a myriad of policies aimed at fighting for one entity: the American worker.
The president-elect vowed to prevent American companies from taking manufacturing jobs overseas, impose a hefty 45% tax on Chinese goods, and to withdraw from the Trans-Pacific Partnership agreement, which boosts trade and economic ties between 12 countries, including the US, Canada, Japan, and Mexico.
Trump was egged on by a growing anti-globalization, populist movement in the US—not to mention many parts of Europe—which has now catapulted him to the presidency. Pundits and policymakers have called his policy suggestions as posing an existential threat to decades-long economic and political frameworks and scaring global firms that rely on free trade, from airlines to cars and IT outsourcing.
Yet, except for a handful of Twitter posts, Trump barely mentioned his trading policies with Africa during his campaign. The US does $37 billion worth of good trade with Africa, mainly through the Africa Growth and Opportunity Act. The agreement, renewed last year through 2025, allows for duty-free access for around 4,600 products from 38 Sub-Saharan countries. Under the AGOA, the president decides which countries receive duty-free and quota-free access to the US—a decision bound to worry African leaders concerned by Trump’s pledge to scrape any deal that hurts American manufacturers.
But since most African exports to the US are either natural resources or low-value goods, “lobby groups rarely argue that AGOA has hit American jobs,” says Ben Payton, head of Africa research at global risk consultancy, Verisk Maplecroft. “When such pressure does arise, Trump would be likely to take an aggressive stance on the legislation.”
But Trump’s commitment to reverse the TPP could also be a silver lining for African trade. A Brookings report from early this year shows that the agreement was most likely to shrink Africa’s share in global trade and diminish its attractiveness as a destination for investment. The major risk for the continent, which is heavily underrepresented in global trade negotiations, was that these kinds of free trade deals would make it difficult for African businesses to compete globally.
But Africa can successfully deter all this by trading with each other, and by encouraging regional integration policies. This fear of marginalization in international trade is a key driver behind the ambitious Continental Free Trade Area, spearheaded by the African Union, and aimed at creating a single market for goods and services.
With less than 2% in global trade, the continent registers dismally on the international trading system. Yet, regional trading blocs such as the East African Community (EAC), the Southern Africa Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS), have been the cause for optimism, encouraging bilateral trade and regional economic cooperation.
If Africa cannot benefit from regional integration, then it is certain to get pushed to the margins even further globally. The only way for the continent to benefit from a Trump trade policy, good or bad, is to trade with each other first.
source:Reuters/Thomas Mukoya
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