As a result of the initiatives put into place over the last two decades, the United States has positioned itself to take advantage of Africa’s economic resurgence, suggests a report issued by the Office of U.S. Trade Representative (USTR) in September. However, as various countries on the Continent become more attractive to foreign investors, it will become increasingly important that the United States builds on its solid foundation to ensure its private sector is able to be a part of a growth story that has larger trends, such as demographics, underdevelopment, and geo-political pressures, on its side.

The centerpiece of U.S.-Africa trade relations, which we have reported on throughout the years (see coverage from January 2014, September 2014, July 2015, and August 2015), is the African Growth and Opportunity Act (AGOA). In 2015, AGOA was renewed for a ten-year period ending in 2025. Just last month, the House of Representatives passed a bill to enable advocates to push AGOA-related benefits more aggressively and to increase access those benefits. There is a decent chance that the bill will pass into law, reports suggest.

USTR, however, admits that, given various economic changes, both in the United States and within the continent of Africa, over the last 15 years, AGOA is no longer sufficient as the primary tool of U.S.-Africa relations. The USTR has suggested a structural shift with respect to the United States’ efforts to develop its relationship with Africa.

USTR outlined a spectrum of alternative, updated approaches, some of which are listed below.

• Traditional Trade Agreements – Traditional Trade Agreements may include bilateral agreements drafted from scratch to address current issues, “mega-regional” free trade agreement which would build upon existing African free trade agreements, or inviting sub-Saharan African countries to “dock” upon existing or renegotiated U.S. agreements.

• Alternative Reciprocal Agreements – Alternative Reciprocal Agreements, following a European model of engagement, would be more narrowly tailored to address specific trade matters, such as tariff commitments.

• Collaborative Arrangements – Collaborative Arrangements, which the United States already has in place with several countries, can be used to internationalize local African rules with the Western formulations as an intermediary step towards more traditional trade agreements.

• Unilateral Preferences – Unilateral Preferences, such as AGOA, could be expanded moving forward.

Regardless of what specific plan is undertaken, USTR believes that the guiding principles to the United States’ approach towards developing a more sustained relationship with the continent should be to: (i) support African regional economic integration, (ii) move towards greater reciprocity, (iii) promote value-added production in Africa and promote diversification of exports from Africa, (iv) help develop an enabling policy environment, (v) promote further African integration into the global trading system, and (vi) take into account the diversity of the continent.

Those companies with current or anticipated trade with Africa should remain abreast of potential developments which may provide opportunities.