The East African Community (EAC) business conglomerates are anxiously awaiting the Joe Biden administration to come into power. It is hoped that a Biden administration will revive negotiations and implementations of the already signed EAC-US Trade and Investment Partnership.
While Trump continues to taint his administration’s short rule with prompting rioters to even invade Capitol Hill the ‘law body’ of the country, leaders from the EAC have gone ahead to congratulate Joe Biden for his election win.
It is clear that businesses in Africa see Biden as a beacon of hope that will reignite the Trump dampened US trade ties with the regional bloc.
Consider the Trade and Investment Framework Agreement (TIFA), a trade pact that covers and governs ‘the framework for expanding trade and resolving outstanding disputes between countries, was agreed between US and EAC partner states in June 2012 but was never implemented.’
However, since 2016, the negotiations for the regional investment treaty stalled due to lack of consensus on the approach for discussions on the regional investment treaty.
East Africa feels left out and it will be up to Joe Biden’s administration to bridge the gap as CEO of the East African Business Council Dr. Peter Mathuki put it;
“The US has TIFAs with countries at different levels of development and trade and investment interests but little has been done with the EAC…”
“As the private sector, we are expecting the revival of an up-scaled US-EAC Trade and Investment Partnership under Biden.”
TIFA was signed on July 16 2008, as a framework for expanding trade and investment between the US and EAC yet as soon as outgoing US President Trump took office in 2016, TIFA became almost none existing, tramping away all that the Barack administration had worked hard to achieve.
Under the US-EAC-TIFA, partners consult on a wide range of issues related to trade and investment, including market access, labour, environment care, protection and enforcement of intellectual property rights as well as capacity building to mention but a few areas.
Further still, just before Barack’s well set course was disrupted, in April 2016, Ministers from EAC and US inked the EAC-US Co-operation Agreement on Trade Facilitation, Sanitary and Phytosanitary (SPS) Agreement and Technical Barriers to Trade (TBT).
Just as it was with TIFA, the SPS did not take off under the Trump administration, it was very much ignored so to speak this despite the existence of agreed work plans.
What Trump seemed not to see, well not until it was too late, is that by killing off US-Africa trade he was in effect leaving room for increased Sino-Africa development ties take even deeper roots. It is not farfetched to say, the Trump administration undermined US influence and interests in Africa and more so in the East African Community.
New hope for US-EAC trade under Biden
It is now all eyes on Biden to rebuild the broken bridges and no one puts it better than Prof Manasseh Nshuti, EAC Chairperson of the Council of Ministers and Rwanda’s Minister of State in charge of the East African Community.
“We all look forward to working with the new US administration and of course hope that America’s trade and investment policies will also advance the interests of East Africa. Reviving TIFA is one of them.”
This time around, the US will be better off looking at Africa as a trade partner rather than a sick patient in need of aid. It is also not enough for the US to single out countries to make individual trade pact but rather deal with regional bodies.
As Prof Nshuti put it, “EAC is better negotiating multilateral trade rather than bilaterally. This is because at the end of the day, what happens in Kenya affects Rwanda, Uganda, and Tanzania, in terms of trade and investments.”
Seconding the opinion is EAC’s Director-General of Customs and Trade Kenneth Bagamuhunda who points out hopeful sentiment for EAC-US trade under Biden.
“We look forward to a return to a multilateral trading system where the trade rules will prevail over unilateralism”.
He was keen to emphasize engagement with the US as a bloc at the EAC and other regional and continental trade areas.
The Biden administration has a great chance of rebuilding trade pacts with EAC and regaining US influence in the region. The EAC offers a large market area of millions of people and also is a great source for raw material for the US.
Countries in the EAC are leading the continent and the world at large in the rate of economic growth.
Cities like Dar es Salaam are set to become the world’s next mega cities and the us has much to gain in terms of trade. Investing in the region’s tourism and hospitality sectors hold huge potential for US investors.
East Africa is one of the World’s most revered tourist destinations with the likes of the Serengeti in Tanzania and spice islands of Zanzibar as well as Kenya Tsavo and the source of the Nile in Uganda.
The US has the financial muscle to set up five star hotels and resorts that will attract high end clientele to the region.
As the region seeks to industrialize, the US has room to invest in mechanization of the agriculture sector as well. It is up to Biden’s administration to review trade pacts that have already been signed and start their implementation.
Needless to say, the EAC looks forward to January 20th when Biden will be sworn in and officially take office. It is hoped that this will mark a turning point for US-EAC relations and be the start of a great new business relationship.
