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Remarks by Ambassador Michael Froman at the Signing of the U.S.-EAC Cooperation Agreement
February 26, 2015
*As Prepared for Delivery*
Progress through Partnership
“Thank you all for coming. It’s great to be here with the trade ministers, ministers of East African Cooperation, and other ministers from the East African Community. We have the father of AGOA here, Congressman Rangel, we’re glad you could join us.
“A famous Kenyan writer once said that a task is a burden only when it has not been tackled. Today, we’ve come together to deepen a partnership that has already tackled many tasks and lifted many burdens.
“Let me say a few words about that partnership – the progress we’ve made together in recent years and its promise for the future.
“This administration has made our relations with Africa a priority like none before it. My first foreign trip as U.S. Trade Representative was to Africa with President Obama in the summer of 2013. And it was during that trip, in Tanzania, that President Obama launched two of his signature Africa initiatives: Power Africa and Trade Africa.
“These initiatives are two sides of the same coin. For any continent to realize its economic potential, it needs to develop its infrastructure, including its energy infrastructure. Growing industries need reliable power and successful citizens need affordable electricity. But even then, reliable energy is not enough. To truly raise living standards, and to promote growth that is not only strong but also sustainable and inclusive, nations need to address barriers that prevent their products from reaching regional and global markets.
“Through Power Africa and Trade Africa, we have been making major strides in these areas. During last summer’s historic U.S.-Africa Leaders Summit, President Obama announced a renewed commitment to Power Africa and pledged $300 million in assistance per year to expand the reach of Power Africa across the continent.
“With Trade Africa, we set about to build on the solid foundation that was formed by the U.S.-EAC Trade and Investment Partnership. Our work has been motivated by a truly transformational development in East Africa – a group of five countries working collaboratively to reduce regional barriers to trade, harmonize regulations, and link together their infrastructure to promote regional economic integration. The EAC initiated these reforms because its five member countries understood that trade is a powerful tool for generating economic growth and reducing poverty and that working in concert to promote trade is critical to the success of the region.
“You can already see the results of the EAC’s commitment to reducing trade costs and improving regional integration. For instance, container transit times from Mombasa, the biggest port in the region, to Kigali, Rwanda have declined from 21 days to six days, while associated transport costs are down by over $1,700 per container. Reducing these types of trade costs has contributed to a more than doubling of intra-EAC trade, from $2.3 billion in 2005 to $4.7 billion in 2013. Along with our international partners, including the multi-donor Trade Mark East Africa initiative, the United States has helped reduce the time and cost of moving goods across EAC borders by building one-stop border posts and making investments to upgrade ports.
“This makes a real difference for real people. People like Abdul Mohamed, a small business owner based in Dar es Salaam Tanzania, who has a business exporting chairs to neighboring Burundi. Abdul used to spend over 12 hours trying the clear the Tanzania-Burundi border, adding precious hours to an already grueling 1,200 km journey. Today, because of a new one-stop border post, crossing that same border takes only four hours. That’s a major improvement for Abdul, as well as the countless people that cross EAC borders every day.
An Important Stepping Stone
“Today’s agreement builds on this progress. It’s an important steppingstone for deepening what has already proven itself to be a promising and impactful partnership. By tackling tasks in three important areas, this agreement will help us lift the burdens that trade barriers impose, unlocking opportunity on both our continents.
“First, this agreement increases cooperation on customs-related efforts, including the implementation of the World Trade Organization (WTO) Trade Facilitation Agreement. In doing so, it will reduce red tape, decrease border release times, and implement other positive reforms to help streamline and facilitate trade. Implementing the Trade Facilitation Agreement will add hundreds of billions to the global economy, with developing countries benefitting even more than developed countries.
“Second, this agreement will increase cooperation and capacity building related to food safety and animal and plant health standards. Today, hundreds of millions of Africans have jobs related to agriculture, but the export potential of their products is greatly limited. Weak standards allow otherwise preventable plant and animal diseases to persist, effecting the health of Africans and preventing affected African agricultural products from being sold to consumers around the world. Tackling these problems and meeting international standards will help EAC partner states increase food security and expand their exports.
“Third, this agreement provides a framework for improving technical regulations, standards, testing, and certification. While very technical in nature, these standards are foundational for trade in many products. Just imagine, if Kenya has one standard, Uganda has another, and the United States has a third standard, our trading potential is greatly constrained. But if we all have a common understanding of the need to use international standards, trade can flow more freely between our countries, giving our consumers more options at lower prices and increasing our exports and the good jobs those exports support. Increasing our EAC partners’ ability to meet quality and safety standards will help more African workers and businesses meet international standards and sell their goods and services abroad, including under the African Growth and Opportunity Act (AGOA).
“Collectively, these three efforts reaffirm our joint commitment to deepening regional integration and strengthening the multilateral trading system to help create an environment that allows U.S.-EAC trade and investment to flourish.
“This agreement is an important achievement, and I’d like to thank the U.S. and EAC teams involved in making it possible, including Erland Herfindahl, Lisa Ahramjian, Christina Kopitopoulos and Jennifer Stradtman from USTR; Jillian DeLuna from the State Department; and Matt Rees from USAID.
Toward a More Comprehensive Partnership
“We see this agreement and all our work with the EAC to date as an important steppingstone, not the final destination. The global economy is evolving and the U.S.-Africa economic relationship must evolve, too.
“An important part of upgrading our relationship is renewing and modernizing AGOA as quickly as possible, which is exactly what we’re working with Congress to do. 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.
“At the same time, we are consulting with Congress about making AGOA more effective – including, for example, possible improved rules of origin and revised review processes. To have maximum impact, AGOA – and the third country fabric provisions – should be extended for as long as possible. And, as Africa’s trade relationships with the rest of the global economy evolve, we should begin a dialogue about moving toward more reciprocal trade relations over time. Of course, the specific parameters of AGOA are ultimately a prerogative of Congress, and we look forward to working with them to put in place a program that reflects the reality of Africa’s rise.
“We’re looking honestly at today’s challenges, and we’re putting together a trade and investment strategy to meet those challenges. We’re moving toward a more comprehensive partnership, with a renewed AGOA at its core, supported by the public and private sectors on both continents. That’s why we’re taking a number of additional steps that go beyond today’s agreement.
“First, we’re launching a new effort with the EAC to develop a regional EAC AGOA strategy. This will be a team effort that brings together U.S. government agencies, other donors, the U.S. and East African private sectors, and EAC governments to support greater utilization by the EAC countries of the market access they already enjoy under AGOA. This afternoon, in fact, we’ll be bringing together private sectors under our U.S.-EAC Commercial Dialogue to enhance our public-private partnership and encourage discussion around business-driven solutions to increase trade and investment.
“I’m also pleased to announce that as we deepen our engagement with the EAC under Trade Africa, we are also looking to expand our Trade Africa initiative to other African partners. In doing so, we’ll build on AGOA in the short-term while establishing new building blocks for a more mature and comprehensive 21st century U.S.-Africa trade and investment relationship over the medium to long term.
“We’ve accomplished a lot together in recent years. I’m looking forward to continuing that work together as we chart a new course for the U.S.-EAC trade and investment relationship. As we move forward, the United States remains committed to using all the tools at our disposal to help support greater African regional economic integration and U.S.-African trade and investment. Together, we can tackle more tasks, support more jobs, and unlock more opportunities for the American and African people alike.