As the rest of the world is gripped by tariffs and trade wars, Africa has quietly taken a leadership position in free trade with the adoption of a continental free trade agreement – by 52 countries, no less – that promises to boost commerce and productivity across the world’s poorest region. It’s also good news for the U.S. according to Alexander Hammond in the National Interest, arguing that the agreement to create the African Continental Free Trade Area (AfCFTA), which came into effect on May 30, paves the way for a free trade pact with the U.S. (as well as other big economic players like China and the EU).
- According to U.N. figures cited by Hammond, the AfCFTA removes tariffs on 90% of goods traded within Africa.
- The agreement is expected to raise consumer spending by increase continental trade by $35 billion per year, or 52% higher than the baseline scenario (without free trade) by 2022.
- AfCFTA also offers a mechanism to coordinate African commerce with other free trade agreements, including the U.S.
- President Donald Trump is cutting aid to Africa, in favor of boosting economic relations through trade.
- Now, instead of negotiating with 55 separate countries the U.S. can negotiate with one set of rules and standards.
- According to Hammond previously, the African Union organized the African Continental Free Trade Area under the leadership of Rwandan president Paul Kagame, a powerful regional player who is an ardent supporter of free trade and admirer of Lee Kuan Yew, the founding prime minister of Singapore