Can We Upend the Status Quo? Plans for the US-Africa Summit

Hilary Hurd

“I’ll love you, dear, I’ll love you till China and Africa meet…and the Salmon sing in the street” Writing in 1937, British poet W. H. Auden’s “As I Walked Out One Evening,” craftily celebrated the immortal strength and near boundless potential of love: a potential only the impossible, the unthinkable, could constrain. In 1937, who could envision a world where China – divided by regional factions and plagued by Japan’s imperial manipulations would not only meet, but slowly transform, the world’s second largest continent?  Who could imagine that less than 80 years later, China would rob Auden of his metaphor? And yet…in the past thirteen years, China’s trade with Africa has doubled: again, again…and again. Moving from $10 billion in 2000 to over $170 billion today, China has not only surpassed, but effectively dwarfed, the United States in Africa by a factor of 3. While US-Africa trade levels hovered around $80 billion in 2011, in 2013 the real value of trade had dropped to $60 billion.

From American academics like Stephan Halper to American diplomats like Johnnie Carson, many have lambasted the Chinese model of authoritarian state capitalism and criticized China’s efforts to ingratiate itself with the corrupt for cheaper access to natural resources. On her 2011 trip to Zambia, Secretary of State Hillary Clinton went so far as to condemn China’s “new colonialism” on the continent. Speaking before the U.S. Senate Foreign Relations Committee in a similar vein, Clinton warned: “We are in a competition for influence with China; let’s put aside the moral, humanitarian, do-good side of what we believe in, and let’s just talk straight realpolitik… Take Papua New Guinea: huge energy find … ExxonMobil is producing it. China is in there every day in every way, trying to figure out how it’s going to come in behind us, come under us.” Aware, and increasingly concerned, that the one-time lethargic dragon might just now be “eating the Eagle’s lunch in Africa,” President Obama has invited leaders from across the entire continent for a three-day “US-African Leaders Summit” in Washington: the largest event any U.S. President has ever held with African heads of state and government. Co-hosted by the US Department of Commerce and Bloomberg Philanthropies, the Summit will focus on strengthening trade and financial ties between the US and Africa and will further Obama’s previous three Africa initiatives: 1) Feed the Future 2) Power Africa and 3) Young African Leaders Initiative. Estimating that the Summit will generate over $900 million in trade deals, U.S. Commerce Secretary Penny Pitzker met with the Wall Street Journal early last week to discuss the Summit’s underlying rationale and what the U.S. hoped to achieve. While Pitzker elaborated on the vast opportunity for US investment in Africa, she intentionally side skirted all questions related to Chinese competition on the continent. Not only is Africa home to some of the fastest growing economies in the world, she reasoned, its GDP growth is expected to exceed 6% for the next decade. Furthermore, its collective workforce will exceed that of China and India by 2040, making Africa an important market not only US consumer goods but also American construction, infrastructure, energy, healthcare, and transportation sectors. For this reason, US engagement with Africa should not necessarily be understood in relative terms as a competition with Chinese firms, but rather, as an absolute opportunity for American companies.

Photo source: The Economist

While her diplomatic language was perhaps unavoidable, it’s near impossible to imagine US-trade interests in Africa absent of a real-politik calculus. Chief on the agenda at the US-Africa Summit will be finding ways to make US-money more attractive to African leaders relative to Chinese investment. At the moment, China not only has fewer restrictions on its loans and assistance strategies than the US, it has managed to engage all over the continent. For example, a report by Brookings Institute indicated that China allegedly has over 150 commercial attaches located on the continent marking and identifying “opportunities, partnerships, and markets.”  By comparison, the US Department of Commerce has offices in only four countries doing similar kinds of work.  While the US has engineered a variety of strategies to increase commercial ties with Africa in the past decade — most notably the 2000 Africa Growth Opportunity Act (AGOA) which allows for duty-free export access to the US market for an estimated 6,000 products in key sub-Saharan countries – few African countries have enjoyed the benefits of AGOA. What is more, the USAID trade hub which is designed to promote AGOA has offices in only three Africa countries. Business leaders expect the US-Africa trade summit will not extend AGOA – due to expire this year – but lead to a series of new programs and initiatives to deepen America’s trade relationship. As US Trade Representative Michael Frohman explained yesterday: “Perhaps the clearest lesson learned from AGOA over the past 14 years is that market access — while important for spurring trade and development — simply isn’t enough…For the United States, this requires a comprehensive, whole-of-government trade and investment strategy with a renewed AGOA at its core and the support of both the public and private sectors on both continents — an AGOA ‘compact’ that brings together our collective resources and puts us on a common course to trade-led growth and development.” As President Obama articulated in his June 2013 trip to Cape Town, South Africa, “America has been involved in Africa for decades.” However, as epitomized by the Summit and precipitated by the Chinese, the US wants to move “beyond the simple provision of assistance, foreign aid, to a new model of partnership”. While it’s difficult imagine the US will be making any Salmon sing in the streets of Beijing – to borrow another line from Auden – it’s fair to say US leaders are ready for some magic.

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