ECDPM | 1 Aug 2014
US-Africa Summit - Are we up for a new deal?
By Isabelle Ramdoo
Next week (4 – 6 August) the United States will host the first ever US-Africa Summit in Washington D.C. This Summit is a remarkable shift in the strategic and diplomatic repositioning of the US in Africa. Although both sides of the Atlantic have been building strong ties over the years, the relationship is not yet a true partnership.
When he was first sworn into office, expectations were high on President Obama’s engagement with African countries and regions. But soon, it was realised that his focus was essentially on “like-minded” countries. It was felt that the US administration paid too little attention to the continent, while others were multiplying summits, partnerships and financial deals. His new love affair with Africa really began in his second mandate, confirmed by an eight day tour around the continent in the summer 2013 and two landmark initiatives: the Power Africa Initiative and the Young African Leaders Initiative.
So are we witnessing the beginning of a true partnership or is the US just catching up?
Before President Obama embarked on his Africa Tour in 2013, Hilary Clinton, then Secretary of State, prepared the ground in 2012, with an 11 day journey stretching over nine countries. It was probably the longest State visit a US high official had ever made to Africa. She did not go there alone: she was accompanied by a big delegation of businessmen from leading companies with one clear message – America is ready to invest in Africa. This renewed US engagement in Africa clearly echoed the change in its approach towards the continent. It underscored the desire to deepen security, political and economic ties, at a time where economic forecasts on the continent are at their highest, but also where new security challenges may threaten prospects. What does that tell us about the US method to engage more with the African continent?
US Diplomacy: strategic engagement or political signalling?
The initiative to organise this first Summit must be underscored. After all, the US was the only one that did not have its Summit with African leaders. So it is a ‘must-have’, an important political signaling that hopefully will finally acknowledge that the African continent is now an indispensible geopolitical player. African votes are increasingly important at the UN Security Council. On the security front, the fight against terrorism and piracy – a core part of US diplomacy – is of key concern to many African states. So we expect the question of peace and security to be at the core of Summit discussions. What forms of engagement this will lead to, and how far the Africans will own the process, still remains to be seen.
The Summit, however, somewhat shakes up protocol and traditions around this Heads of States gathering. What is striking is that this is not a Joint Summit, understood as one which is prepared by two parties come together based on a commonly agreed agenda, preferably reflecting with converging interests and shared values. While the Agenda represents no major conflict of interest, African leaders were summoned to Washington. Leaders were opted in and out by the White House and President Obama has no intention to meet any of his African peers on a one-to-one basis, at least formally. The Summit will take the form of “interactive sessions”, whatever that means. No final documents are to be expected at the end of the meeting. It contrasts sharply with the April 2014 Joint Africa-EU Summit held in Brussels, where the question of leaders’ participation was quite an issue; with the 2013 Japan-Africa Summit, where Prime Minister Abe made it a point to give each of the 46 African leaders a 15 minutes audience, over 3 days, and with the 2012 China-Africa Summit, where all leaders were invited and met the Chinese president individually and left with increasing commitments from China to address infrastructure and other economic challenges on the continent.
Deepening trade and economic ties: what approach?
Next to peace and security, the Summit holds many promises to advance significant moves to foster trade and economic ties. The Africa Growth and Opportunity Act (AGOA) is set to expire in 2015. Besides the standard Generalised System of Preferences, a unilateral preference scheme available to all developing countries, AGOA has been the main preference scheme, providing eligible African countries with significant duty-free market access on a wide number of products to the US market. It is widely acknowledged as a key trade instrument; that has helped boost African exports to the US and created thousands of jobs in beneficiary countries. Although many feel that it could have done much better and that its utilisation remains far below expectations and capacity.
As the US repositions itself in Africa, the extension of AGOA will be high on the Agenda. Beyond that, we expect discussions on what form the future trade relationship with take and will the US seek to deepen its trade ties through reciprocal arrangements?
As African leaders are preparing to head to the Summit, debates and discussions have intensified among key stakeholders in the US to argue for continued deepening of trade ties. The US Trade Representative Michael Froman highlighted some of the key issues that might frame and shape the future US-Africa trade relationship in his testimony before the Senate Finance Committee on 30 July 2014. He argues for comprehensive trade and investment strategy – read possibly in the future, negotiate reciprocal trade agreements, à la EU-Africa Economic Partnership Agreements (EPAs) but with more binding investment clauses to protect the interests of US businessmen. But in the shorter term, as AGOA extension is sought after 2015, we might expect conditioning AGOA preferences on improved business climate and better trade facilitation (including through the implementation of the WTO Bali Package) and requests to start negotiations on bilateral investment treaties, which are much more legally binding in lieu of the current TIFAs.
While AGOA may be extended beyond 2015, all this augurs the end of unilateral preferences in the medium-to long term. And as the US engages increasingly in mega trade deals both with Europe and with Asian key economic actors, African counterparts would need to keep a close eye on the US approach to those trade deals.
Facing competition from the East
“When Uganda sought bids last month for an $8 billion contract to expand the East African nation’s rail network, it only invited Chinese companies to apply”, Bloomberg news revealed in a blog post last week. Furthermore, China is now Africa’s first investment and trading partner country and is expected to become the major bilateral financial partner as it materializes its $1 trillion worth of loans by 2015. As Chinese strategic diplomacy pays off in Africa, the US, as other major African partners, realise they need to keep up to speed with diplomatic ties to counterbalance the China effect in Africa if they want to remain relevant in Africa.
China has an important head start on trade and investment over the US and this is expected to widen. So the US will have to learn have to live with China and will have to be more strategic to find its place to remain attractive. While US and China don’t compete in the same areas of expertise.
“We build airplanes and the Chinese do road construction”, says CEO of the Centre for Global Development Todd Moss. Complementarities will have to be sought to keep up with the competition, notably by building on the Power Africa initiative and by stepping up efforts, notably of private actors, in other infrastructure investments.
While the Summit cannot address the question of partnership per se – after all African countries are free to choose their partners – the spectre of the China effect will hover on the choice of subjects to be addressed at the Summit. For instance, we might see the US keeping a low profile on traditional “moral” issues, such human (and other) rights, instead keeping a strong focus on business-related issues. Tactically, the US might also want to skip these discussions to mark a difference with the EU; that did address those issues at the April Africa-EU Summit.
So, should we expect a major shift in strategy?
From the outset, this is not clear. To start with, by breaking with protocol, the US is perhaps setting up new ways of political engagement – at least this is what is hoped. Too many formal meetings have often proven to be talking shops. So perhaps the setting will help the process.
Secondly, this is the first Summit and we should not expect too much of a two-day ‘interactive’ meeting and what it could achieve. All will depend on the level of preparedness to respond to strategic considerations from both sides and on the desire to have an implementation mechanism in place to deliver on promises.
On a more pessimistic note, the Agenda is driven by the US’s own security and economic interests. True AGOA is for the benefit of Africa, but although President Obama calls for a partnership “grounded in mutual responsibility and mutual respect”, it is not clear how this partnership will be sealed and what role African partners will actually play in shaping the agenda to reflect their own priorities and interests. This is what is expected in a major shift in strategy.
Isabelle Ramdoo is a Mauritian national and is the Deputy Head of the Economic Transformation and Trade Programme at the European Centre for Development Policy Management in Maastricht. The views expressed here are those of the author, and not necessarily those of ECDPM.