The United States has proposed a new trade deal with the East African Community (EAC) common market, underscoring the growing interest of American businesses in investing in Africa, said a senior adviser to President Barack Obama.
The five-nation African bloc of 130 million people has doubled intra-regional trade in the five years after it introduced a customs union in 2005.
Trade between the EAC – which includes Kenya, Tanzania, Uganda, Rwanda and Burundi – and the United States rose 34 percent in 2011 from the previous year, said Michael Froman, assistant to Obama and deputy national security adviser for international economic affairs, Reuters reports.
“The trends are all headed in the right direction, and increasingly U.S. and international companies and investors are making Sub-Saharan Africa, and East Africa in particular, a priority,” Froman told a luncheon held by the American Chamber of Commerce in Kenya.
Froman said the proposal by Obama for a new trade deal was meant to encourage this trend and support further EAC integration. The deal would seek to guarantee American investors that they would be treated fairly and that their investments would be secure.
“It calls for a focus on trade facilitation to reduce the bottlenecks at the border, such as moving to a single border clearance and harmonising customs documentation, to reduce delays and unnecessary costs,” he said.
American firms that have chosen to base their Africa operations in Nairobi in recent years include Coca-Cola Co., Google Inc. and General Electric.
Froman is on a tour of Africa that included stops in Tanzania and Ethiopia and will end in Nigeria this week; he has been meeting with government officials and private-sector business leaders.
Although east African economies are growing faster than others on the continent, border delays and the harassment of small traders by police have drawn criticism and held back further economic growth.
EAC officials have been holding up the doubling of trade in the region over half a decade as a sign of clear progress.
Next year’s general election in Kenya, the region’s largest economy, has also raised concern after the last vote in 2007 was marred by deadly violence.
“The eyes of the region, the continent and the world are on Kenya as it prepares for elections next year,” Froman said, adding that the U.S. would work in the country to promote a free and fair vote.