A Trade-off in Trade and Development: How Trade Negotiations Can Help Africa’s Economic Growth

By Aneesh Bhatt,ReutersThe economic power of Africa’s largest economy has long been undervalued, but a growing chorus of voices in Washington is calling for it to be valued more widely.

African leaders have been reluctant to use trade and investment as a tool to boost their economies.

Africa’s current trade balance is less than 3 percent of GDP, and its leaders say that’s not enough to sustain its development, much less prosperity.

The United States and other nations have been pressuring African countries to do more to diversify their economies, and to make trade deals more favorable for African businesses.

In the latest effort to boost African trade, the United States is pushing African leaders to negotiate a free-trade agreement with the European Union.

The goal is to bring the continent closer to its goal of being a full-fledged, fully integrated trading bloc.

While many African countries say they don’t want to enter into such a pact, they are pushing for a deal that would create a more open, multilateral trading zone.

The EU and the United Nations have said that the best way to promote peace and stability in Africa is for African countries not to participate in a trade agreement that would be based on a WTO or similar trade agreement.

“It’s not a zero-sum game,” said Zephyr Teachout, a senior adviser to the President of the United Kingdom, who has led efforts to promote African economic growth and a more inclusive world.

“The more African countries that want to be part of that, then the better off we are.”

Teachout, who chairs the Center for American Progress think tank, said the best-case scenario for Africa would be for the continent to become a free trade zone.

“That’s the only way to have a trade-off that creates growth and growth creates jobs, that’s the best possible outcome for the entire continent,” she said.

Teachouts views of Africa as a zero sum game reflect a changing understanding of how trade works in the region.

The last trade agreement signed between the U.S. and the EU in 1994, known as the African Regional Economic Development (ARED) Agreement, allowed for some regional integration and trade.

But many economists say that it did little to address economic challenges facing Africa.

The EU’s trade surplus with Africa was $5.3 billion in 2016, according to data from the World Bank, and the gap between the two countries was growing rapidly, with the EU’s surplus reaching a record $3.3 trillion in 2016.

Teacherout said that while she supports a free market approach to trade, it is important for African leaders that they also take the time to understand what trade is for them and what the benefits and costs are.

“I think a lot of them are trying to be a little bit more inclusive than they are in their understanding of trade,” she told Reuters.

“They’re trying to understand how they’re being traded.”

Teacherouts view of Africa has shifted to an understanding that economic growth is key to its prosperity.

She said that African leaders have begun to view economic growth as a way to counter economic challenges that have become more pressing in recent years, such as a rising middle class and rising inequality.

Teachers said that when African leaders talk about their desire to develop Africa into a more developed, multibillion-dollar economy, they do so in a way that recognizes the economic power they hold.

“They’re acknowledging that Africa has the potential to be very, very successful,” she explained.

“That doesn’t mean we should just take their word for it.”

Teachers also said that even if the United State and other countries continue to push African countries toward a free trading zone, the African governments must make their trade agreements more favorable.

“What’s really important is to be clear with the African countries, that we’re not advocating for a free exchange of goods,” she added.

“The best way for them to be successful is to have trade deals that work for them.”(Reporting by Aneesha Datta in Johannesburg, and Agence France-Presse/Getty Images; Editing by Nick Macfie)


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