Economic relations between Africa and China have improved significantly over the past 25 years in the form of trade projects, investments, credit financing and public infrastructure. For more than a decade, China has been considered Africa`s largest or second-largest trading partner, with Sino-African trade reaching $190 billion in 2019.16 As a country with more than 1.3 billion people, China interacts with each of the 55 African Union member states, which cumulatively have populations of the same size. The Office oversees the implementation of the African Growth and Opportunity Act (AGOA), a trade preference program adopted in 2000 that has been at the heart of the U.S.-Africa commitment to trade and investment. By offering duty-free entry to the United States for almost all African products, AGOA has helped expand and diversify African exports to the United States while fostering a better business environment in many African countries through the application of eligibility requirements. In 2015, the U.S. Congress extended AGOA until 2025. The Bureau for Africa is working closely with other U.S. agencies to support capacity building to increase the use of the AGOA program. More information about the AGOA program is available here. Historically, the United States has viewed its trade with African countries either as economic aid or as a source of resources. Trade as part of development assistance has been a predominant U.S. problem in recent decades. Although Mexico is not an important market or source of commercial or investment capital for African countries, it is an interesting example of a country that has adopted a unique approach to regional integration while remaining an active member of the multilateral system.
Mexico has used its regional and multilateral trade negotiations to reaffirm its national objectives of opening up its economy, attracting investment and raising wages and living standards. African countries also participate in trade agreements and trade programmes with trading partners outside the continent, including: Economic Partnership Agreements (EPAs) with the European Union (EU); Generalised System of Preferences (GSP) with Japan and the United States; the African Growth and Opportunity Act (AGOA) with the United States; and several regimes granting tariff exemption to least developed countries. At the same time, investment protection across the African continent is carried out under complex and diverse legislation, including investment protocols in bilateral investment treaties (BITs), 7 national investment laws and regulations, and regional investment frameworks, including the non-binding Pan-African Investment Code (PAIC)8, which is supported by the African Union.9 Second, columns two to five show the price of the best-selling brand in US dollars with purchasing power parity for four years: 2008, 2010, 2012 and 2014 received from Euromonitor. On average, there have been price increases in each regional agreement, although some regional agreements have recorded price decreases in some years. In ECOWAS, for example, there was a 2% drop in prices between 2008 and 2010 and between 2010 and 2012; however, between 2012 and 2014, there was an average price increase of 18%. This is also reflected in WAEMU, which is not surprising given the overlap of members with ECOWAS. It should be noted that there is currently a tax cap on tobacco products in both agreements, which may keep prices lower than in other regions. Comesa recorded a price drop of 1.8% between 2008 and 2010. The EAC recorded a price decrease of 8.18% between 2010 and 2012. It is important to note that of the 46 countries included in this analysis, prices for 10 countries did not change significantly.
Kenya`s tobacco leaf exports (Supplementary File 2: Figure S2) represent a more complex scenario. As in Malawi, Kenya`s tobacco leaf exports to Europe have been steadily increasing since the mid-1990s. But since the consolidation of BAT in Kenya`s regional tobacco manufacturing centre, leaf exports have generally declined to the three traditional regional destinations of Africa, Asia and the Americas as a whole. For example, while leaf exports to neighboring African countries increased sharply in 2011, regional exports declined sharply at the time. Similarly, exports of leaves to Asia grew rapidly until 2009, but then declined significantly. Trade to the Americas was uneven, though generally insignificant, with anomalies most likely reflecting short-lived global demand for tobacco leaf species produced by Kenya in a given year. It appears that Kenya retains a large portion of its tobacco leaves for domestic manufacture (Supplementary File 3: Figure S3). In 2018, the United States took an important first step toward mutual trade relations with Africa by announcing its intention to negotiate a free trade agreement with Kenya.
The Trump administration had hoped that a free trade agreement between the United States and Kenya could serve as a “model agreement” for free trade agreements with other African countries. In March 2020, then-U.S. Trade Representative Robert Lighthizer sent the required notice to Congress on the U.S. intention to negotiate a free trade agreement with Kenya, potentially allowing Congress to consider a free trade agreement, if concluded, by Congress as part of an “expedited” legislative process that would lead to a vote on the negotiated agreement. However, the window of opportunity for this is closing quickly, as the Trade Promotion Authority (TPA), under which the accelerated procedure takes place, expires at the end of June 2021. If the U.S. Congress decides to extend or renew the APT, the likelihood of a successful conclusion of a free trade agreement between the U.S. and Kenya increases. In early 2021, the fact that almost the entire African continent created a free trade area attracted media attention: the African Continental Free Trade Area (AfCFTA). .