* Africa now home to many fast-growing economies
* China trade with Africa up more 1,400 percent since 2000
* US business feels left out of planning on African trade
By Doug Palmer
WASHINGTON, Aug 17 President Barack Obama's
administration, criticized for not doing enough to boost trade
with Africa in the face of rising competition from China, has
taken steps in recent months to address those concerns and plans
to do more.
After decades of poor performance, Africa is now home to
some of the world's fastest-growing economies and China has been
signing contracts to lock in long-term access to the continent's
"Trade and investment is a critical component of the
president's vision for the next five years of U.S. policy
towards sub-Saharan Africa," Deputy U.S. Trade Representative
Demetrios Marantis told Reuters in an interview.
Obama, in a tough race for re-election against Republican
Mitt Romney, in June laid out a "U.S. Strategy Toward
Sub-Saharan Africa," which touted the continent's potential "to
be the world's next major economic success story" and promised
to work with the region to free up trade and investment.
But Stephen Hayes, president of the Corporate Council on
Africa, a U.S. business group, said Obama has not done enough to
involve the private sector in planning on Africa.
The strategy paper was a positive step, but it contained few
new ideas and business was barely consulted, Hayes said.
The U.S. government must do more to help large U.S.
companies compete against big Chinese state-owned companies and
other foreign firms, he said.
Two-way trade between China and Africa totaled just $8.9
billion in 2000, but grew more than 1,400 percent over the next
decade to $127.3 billion in 2011, according to a U.S.
Congressional Research Service report.
Trade between the United States and the more than 40
countries that make up sub-Saharan Africa hit a record $104.1
billion in 2008, but fell sharply during the financial crisis
and totaled $94.3 billion last year.
New U.S. investment in the region ran about $3.2 billion in
2010, compared to about $36 billion flowing in from China and
the rest of the world, the CRS report said.
U.S. trade policy toward Africa has been guided since 2000
by the African Growth and Opportunity Act, which expires in
2015. AGOA waives import duties on a long list of goods made in
eligible sub-Saharan African countries.
Congress recently renewed an AGOA clothing provision, just
two months before it was set to expire and as Secretary of State
Hillary Clinton was arriving in Africa for a seven-nation tour.
The action allows AGOA countries to continue using fabric
from "third countries" such as China and Vietnam to make clothes
to sell in the United States duty-free. But the delay in
renewing the provision cost African producers many orders since
importers book shipments months in advance.
That experience illustrates why Congress should not wait
until 2015 to renew the entire AGOA, said Marantis, the deputy
U.S. trade representative.
"The closer you get to expiration, the more uncertainty
there is for investors and you really do run the risk of
investment drying up," Marantis said. "I think we need to start
very soon in terms of crafting the next AGOA bill."
Alarmed at the inroads being made by China, some lawmakers
have introduced legislation aimed at increasing U.S. exports to
Africa by 200 percent over the next ten years.
"Increasingly I am hearing: 'The U.S. has given up on Africa
as a market,'" Senator Dick Durbin, the Senate's No. 2 Democrat,
said. "While we're building institutions (in Africa), China and
others are building markets and we're being left behind."
Clinton's recent trip included a stop in South Africa where
she was joined by executives from big U.S. companies like
Boeing, Wal-Mart, Federal Express and General Electric, the
first time that has happened on a high-profile Obama
administration visit to the region.
But the effort, coming late in Obama's first term, seemed
symbolic and so does an expected visit in coming months by
acting U.S. Commerce Secretary Rebecca Blank, Hayes said.
Still, one idea that business did welcome in Obama's
strategy was a focus on promoting regional integration in Africa
by tearing down trade barriers between neighbors. That would
create larger markets and boost incentives for investment, Hayes
Along those lines, the United States is beginning talks with
the five countries in the East African Community - Kenya,
Tanzania, Uganda, Rwanda and Burundi - on an investment pact.
It is also close to concluding an investment treaty with
Mauritius and considering a similar pact with Ghana.
The U.S. Export-Import Bank announced recently it will help
finance as much as $2 billion in U.S. energy exports to South
Africa over the next seven or eight years.
South Africa plans to invest around $300 billion in
renewable and other energy projects over the next 20 years and
"we wanted to respond that we were clearly foursquare in support
of that agenda," Ex-Im Bank President Fred Hochberg said.
The bank's portfolio of loans in the sub-Saharan region now
tops $5 billion, including a record $1.5 billion so far in the
current budget year, he said.
Given the stiff competition from China, the Ex-Im Bank could
play an important role in boosting U.S. trade and investment in
Africa, Hayes said. But constraints imposed by Congress on the
bank limit its use for riskier projects, he said.