It is improving. Until Africa is prosperous, the world as a whole cannot be prosperous. Recently, Assistant U.S. Trade Representative for African Affairs Florie Liser sat down with America.gov writer Charles Corey to talk about how trade is helping countries in sub-Saharan Africa. Now is the time for us to strengthen our resolve and redouble our efforts to boost economic growth in Africa”. Free trade is about rejecting favoritism and expanding economic opportunity for all. Why Africa Is Essential to America's Future The opportunities for investment, trade and economic development are almost limitless on the continent of 54 different nations. There are several reasons behind regional under-trading: the low development level of African economies and their excessive dependenc… Trade has always required, and always will require, capital, which is why the Dutch were able to control it for much of the seventeenth and eighteenth centuries, and why global trade volume has suffered a steep decline in the past year. Why do countries trade?Countries trade with each other when, on their own, they do not have the resources, or capacity to satisfy their own needs and wants. And Africans must begin trading more with each other. Trade unions played an important role in South Africa’s transition from apartheid in 1994 and keep on a very public role in the South African economy. | Acknowledging that there is confusion, Liser said it is important to understand what AGOA really is. Because of very limited diversity of products, the same primary products also tend to dominate Africa's trade with the rest of the world, notes the author of the World Bank study, Mr. Alexander Yeats. International Trade is also concerned with allocation of economic resources among countries. This is not so, and punishments meted out could be very harsh. Accept cookiesCookie settings, May 8 2015 Coffee is not the second most important commercial product in the world after petroleum, but it is the second most important commercial product that is exported by developing countries. The United States is the world's largest economy and the largest exporter and importer of goods and services. "Trade is critically important to economic development. The United States supports heroic work to combat HIV-AIDS, malaria, hunger and poverty around the world, and this assistance will remain necessary for some time. The Niger is an important river in Africa because it is the principal river in Western Africa and provides an invaluable water source in the Sahara Desert. But again," she acknowledged, Africa is "starting from a very small base. At the 2018 China-Africa Cooperation Forum, China announced it would be providing $60 billion in financial support to Africa. African countries don’t trade with each other much. Tom Hart, the U.S. Executive Director at ONE had the opportunity to testify before the Senate Foreign Relations Subcommittee on Africa and Health Policy last month on the reauthorization of AGOA. Trade and export-oriented growth were two key elements in South Korea’s remarkable transformation. "You look at the products you have, and you determine the three or four particular products or sectors [where] you have a comparative advantage,"she explained. Thus International Trade is very important for all the countries in the world. The central function of a trade union is to represent people at work. Benefit from the economies of scale that the export of your goods can bring – … Many countries in Asia and Latin America, she said, "don't have even one smidgen of Africa's natural resources - a country like South Korea, for example - yet they are huge players in the global trading system. By: Involved in Exporting? Why taxes matter in Africa. We are seeing a greater increase in intra-African trade, but," she emphasized, "the reason that that is important is that you are unlikely to be competitive globally if you are not competitive regionally. South Africa . Islamic traders entered the region and began to trade for gold and slaves from Western Africa. South Korea was one of the poorest countries in the world with an annual per capita income of only $64 just after the Korean War. Some countries are employing this strategy and bringing together their trade, finance, transport and energy ministers and investment promotion experts. Tanzania produces the cotton for the Venus Williams line of tennis shirts, which also is manufactured at a plant in Tanzania. Thanks to continuous struggle for rights of black workers which was also part of the anti apartheid movement, union registration and membership rights were established for … The United States trade relationship with sub-Saharan Africa remains underdeveloped. This is why having AGOA as one initiative aimed at expanding the U.S. aspect of our economic relationship with the Africans" is so important. Do you want to stay informed about how you can help fight against extreme poverty? Right now, Africa has about 2 percent of all world trade, which is hard to believe when you think about all of the tremendous resources that they have - oil, diamonds, gold ... not to mention all the agricultural products such as coffee, tea, cocoa - and to think that Africa still only has 2 percent of world trade is really incredible. In fact, U.S. trade with Africa has been declining since 2011. You can unsubscribe at any time. You agree to receive occasional updates about ONE’s campaigns. There is a lot of talk around Washington these days about trade. Why Trade Facilitation is Important for Africa Barbara Rippel * November, 2011 Trade facilitation can provide important opportunities for Africa by increasing the benefits from open trade, and contributing to economic growth and poverty reduction. When trade takes place across the country, it's international trade. At the same time, economic growth in Africa from 2004 to 2014 averaged 5.8 percent, though in 2015 growth was only 3.75 percent, in large part reflecting the decline in commodity prices—a key export for many … Today, salt is most commonly used to make food salty. This is very low; in Europe trade within … Tom Hart testifying before Senate Foreign Relations Subcommittee Photo credit: David Kortava. The essence of free trade is the very absence of regulation. 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Through the Africa Growth and Opportunity Act, the United States has been providing duty-free quota-free access to U.S. markets for eligible African countries since 2000. If you select 'Yes' we can let you know how you can make a difference. Liser said the United States needs to work with the countries of sub-Saharan Africa in many areas so they can take full advantage of both AGOA and worldwide trading opportunities and send exports to emerging markets such as China, India and Brazil. Even though the intra-African exports in total merchandise exports in the continent rose to 17.7% in 2015 from 12.4% in 1995, it was still low compared with 58% in developing nations, 60% in Asia, 61.6% in the EU (28), and 51% in America ( Table 10 ). February 26, 2016 ... but from international trade taxes like import duties. Read the article below. The United States trade relationship with Africa is an important factor in its economic growth. For that reason, the United States strongly encourages all African countries to develop an "AGOA strategy" based on export promotion and competiveness, she said. For some countries like East Timor, this … We are getting a greater number of value-added nontraditional products entering the U.S. under AGOA. The most obvious consequence of low levels of tax collection is that there are simply not enough domestic revenues to pay for health care, roads, schooling, police and civil defense, water systems, energy grids . Trade in Ancient West Africa The civilizations that flourished in ancient West Africa were mainly based on trade, so successful West African leaders tended to be peacemakers rather than warriors. Under AGOA, U.S. imports from sub-Saharan Africa have increased more than three times, and reached $26.7 billion in 2014. The apparel industry, she added, is a "gateway to industrialization.". In the south were cities such as Timbuktu and Gao; in the north, cities such as Ghadames (in present-day Libya). Trade is critical to America's prosperity - fueling economic growth, supporting good jobs at home, raising living standards and helping Americans provide for … why is international trade important to south africa?can south africa afford to have totally free trade with the rest of the world?with specific reference to the last point above,is china a threat or an advantage to our economy?what is the SA government's standpoint on trade and protectionism?what trade policies are in place to manage our trade with the rest of the world ONE strongly supports the quick reauthorization of the African Growth and Opportunity Act (AGOA), but does not have a position on the other bills up for consideration. Africa - Africa - Trade: Intra-African trade records frequently understate the amount of trade—partly because of the lack of adequate statistics and partly because of the high rate of smuggling, which allows a substantial amount of traditional border trade to continue unrecorded. Because trade is vital to sub-Saharan Africa's economic future and to improving lives and livelihoods, the 8th Annual African Growth and Opportunity Act (AGOA) Forum, to be held in Nairobi, Kenya, August 4-6, is an important venue for cultivation of trade opportunities, Liser said … They provide the advice and support to ensure that the differences of opinion do not turn into major conflicts. African economies trade relatively little between themselves. With AGOA set to expire in September, Congress has recently begun consideration of legislation that, when passed, will reauthorize AGOA through 2025. Trade is the key to long-term, sustainable economic growth and development in sub-Saharan Africa, says Florizelle Liser, assistant U.S. trade representative for Africa. Africa is the world's second-largest and second-most populous continent, after Asia in both cases. So even though we have seen growth, we have not gotten anywhere near the potential. "The problem is that, as is true with most of the AGOA countries, you have huge potential but you don't have the investment and the focus on how to take that and duplicate and multiply that." Photo credit: Morgana Wingard. You have cotton farmers who would benefit if you could create more of these factories," which in turn could employ many more people. The importance of salt may be seen during the Roman period , when soldiers were paid in salarium argentum, … Trade unions play an important role and are helpful in effective communication between the workers and the management. ", Often, she added, people think AGOA is just about textiles and apparel. Currently, only approximately 1.5 percent of U.S. exports are to sub-Saharan Africa. It is not. In fact, while almost two-thirds of African countries’ exports go to Europe, only 17% of exports go to other African countries. "You sit all of these people around the table and you have them ... determine, step by step, what they have to do to advance the competitiveness of those three or four products or sectors. I said you only have one plant. Another issue, she said, is the need for much more domestic and foreign investment on the continent: "Without that investment, these factories that we are talking about building simply will not be built." She added that "it is not just about foreign direct investment, but also about domestic investment and government investment in the infrastructure that supports trade.". "Africans trade the least with each other than all the other continents. You can unsubscribe at any time. As seen in Figures 1 and 2, less than 20% of total exports and imports of Sub-Saharan Africa (SSA) and the Middle East and North Africa (MENA) goes to and comes from these two regions, though this share has grown slowly over the last decade. Removing trade barriers has contributed to the We believe that this type of transformative economic development is possible throughout the developing world. U.S. imports under AGOA in 2008 totaled $66.3 billion, with $5.1 billion in nonoil trade, a sector that Liser says the United States wants to further expand. In 2016, global coffee exports were $ 19.4 billion. Here are some Importance of International Trade : 1) International Trade enables the fuller utilization of resources. By comparison, she said, depending on the product, Bangladesh exports to the United States three to five times the amount of apparel that is exported to the United States by all sub-Saharan African countries combined. The reason why the triangular trade was so important is beacause of what happend during the time of what was going on. ", Recently, Liser talked to the Tanzanians about the AGOA strategy they are developing. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply, Are you sure? In South Africa trade unions were stared towards the dusk of 19th century but the early trade unions were formed for racially white workers. At about 30.3 million km 2 (11.7 million square miles) including adjacent islands, it covers 6% of Earth's total surface area and 20% of its land area. It is a popular misconception that enslavement in South Africa was mild compared to that in America and the European colonies in the Far East. But the power of trade is that if the Africans were able to increase their share of world trade from 2 to 3 percent, that 1 percentage increase would actually generate about $70 billion of additional income annually for Africa," or about three times the total development assistance Africa gets from the entire world, Liser said. Africa’s total land area is approximately 11,724,000 square miles (30,365,000 square km), and the continent measures about 5,000 miles (8,000 km) from north to south and about 4,600 miles (7,400 km) from east to west. So until they open their borders with each other and trade with each other, you are not going to get the level of competition that will allow them to be major providers of any product globally.". The share of SSA is even smaller (below 10%) and largely stagnant. The Administration has also chosen to focus on trade deficits as a measure of the success of U.S. trade policy. Increased efficiency. Trade unions have created positive effect on members’ wages, even though it seems that this increase has resulted in part from changes in the composition of union membership. In 2015, sub-Saharan Africa’s GDP is expected to grow at 4.5 percent, making it the fastest growing economic zone in the world, outpacing even Asia. So AGOA is important because it is one of the major ways that we have to help encourage greater value addition to Africa's production of agricultural and manufactured products. ONE.org uses cookies to give you the best experience. Meaning Prior to the advent of refrigeration, meat and vegetableswere salted so that they could be eaten at a later date. The quick passage of AGOA is essential, and we hope that Congress will move quickly to do so. Emily Huie. The trade routes remained an important part of the African economy throughout the Middle Ages until the 1500s. In just 50 years South Korea moved from one of the poorest countries in the world to a country that has its own foreign aid program and is providing assistance to developing countries. But that time will be shorter when trade, not aid, defines our relationship with Africa. African trade reached its height, however, after the Arabs had conquered North Africa. The importance of International Trade: Economics deals with the proper allocation and efficient use of scarce resources. The sands of the Sahara Desert could've been a major obstacle to trade between Africa, Europe, and the East, but it was more like a sandy sea with ports of trade on either side. By developing and exploiting their domestic scarce resources, countries can produce a surplus, and trade this for the resources they need.Clear evidence of trading over long distances With the end of apartheid in the early 1990s, international trade has expanded dramatically so that in 2000 international trade constituted 16 percent of the GDP. "Then you look carefully at what are the challenges that face those three or four products or sectors and what would the country have to do to make them more competitive." When you submit your details, you accept ONE's privacy policy and will receive occasional updates about ONE's campaigns. You can. "So ... the first thing we need to understand is what it does, and that it is working. Congress is considering several bills on trade; much of it is highly technical and difficult for non-trade experts to understand, and it’s not always clear why trade is important to development. . Through the Africa Growth and Opportunity Act, the United States has been providing duty-free quota-free access to U.S. markets for eligible African countries since 2000. "That shows you that they [the Africans] have huge potential but somehow that is not being advanced." Successful trade provides for developing/emerging nations: A source of foreign currency to help a nation’s balance of payments (trade surplus countries build up US$ reserves) An important way of financing imports of essential imports of capital equipment / technologies and energy supplies By signing you agree to ONE's privacy policy, including to the transfer of your information to ONE.org's servers in the United States. Find Tariff Information at the WTO. You have all this cotton. Salt has many uses, though it is primarily associated with food. The term 'trade' refer to exchange of goods and services. In the past, salt had another important culinary function – the preservation of food . Even though Africa’s trade with the world has improved, trade within African remains low. . Caravans of camel riding merchants from North Africa crossed the Sahara beginning in the seventh century of the Common Era. While we strongly support AGOA, we think that more needs to be done in order to fully capitalize on the opportunities for economic growth. Why is a free-trade area necessary? the country by most developed countries as a punishment for South Africa's commitment to apartheid. Living in the US, you get the impression that the world's big problems are the US and European economy and military security, but the suffering and poverty of ordinary people in developing countries will have a more important long-term impact on the world's future. Around 1650, the trade moved to west-central Africa (the Kingdom of the Kongo and neighboring Angola). It’s two fertile deltas provide critical water sources and wetlands to an otherwise very dry region. Africa, the second largest continent, covering about one-fifth of the total land surface of Earth. Here is a little bit about ONE believes that trade is an important aspect to supporting development and poverty reduction: Giving African countries the opportunity to participate in the global economy through trade helps grow their economies, creates jobs, and reduces poverty. "AGOA is essentially a trade preference program which adds about 1,800 products to the list of about 4,600 products that are already eligible to enter the United States duty free under the Generalized System of Preferences. 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The purpose of AGOA in adding those 1,800 products was to give the Africans a competitive advantage in the U.S. market for additional value-added products. Because trade is vital to sub-Saharan Africa's economic future and to improving lives and livelihoods, the 8th Annual African Growth and Opportunity Act (AGOA) Forum, to be held in Nairobi, Kenya, August 4-6, is an important venue for cultivation of trade opportunities, Liser said in a July 21 interview with America.gov. His concluding statement is the perfect summation of why we believe that trade plays an important role in development: “Of course, at ONE, we continue to believe our foreign assistance programs remain critical. Over the last 50 years, South Korea has achieved an average growth rate of seven percent and today per capita income is over $23,000, making it richer than both Spain and New Zealand. Amani ya Juu, peace from above, is a self-sustaining sewing and reconciliation project for marginalized women based in East Africa. Africa's share of the U.S. import apparel market is less than 2 percent. The United States trade relationship with Africa is an important factor in its economic growth. "I challenged them. By Ruth Levine. Other natural resources contribute to the movement of international trade, but none to the extent of the oil trade. At work 2018 China-Africa Cooperation Forum, China announced it would be providing $ 60 billion in financial to... Advice and support to ensure that the differences of opinion do not turn into major conflicts you know you! Market is less than 2 percent receive occasional updates about ONE 's campaigns that this type of transformative economic is. Transformative economic development is possible throughout the Middle Ages until the 1500s routes remained an important factor in economic. Submit your details, you accept ONE 's campaigns in 2014 after Asia in both cases approximately 1.5 of... Gold and slaves from Western Africa is possible throughout the developing world of talk around Washington these days trade! 26.7 billion in 2014 the AGOA strategy they are developing shows you that [... One ’ s remarkable transformation first thing we need to understand what really. Around 1650, the trade moved to west-central Africa ( the Kingdom of the African economy the. The proper allocation and efficient use of scarce resources we can let you know how you help... A self-sustaining sewing and reconciliation project for marginalized women based in East Africa U.S. exports are to sub-Saharan Africa select!: Emily Huie to west-central Africa ( the Kingdom of the success of U.S. trade with the 's. Important is beacause of what was going on used to make food salty Africa’s trade with the proper and. 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By: Emily Huie moved to west-central Africa ( the Kingdom of the Common Era also concerned with allocation economic.