Thursday, June 21, 2018

US-China Trade War Reinforces The Necessity Of AfCFTA

The current trade war that is gathering momentum between the United State and China should be a great lesson for all forward thinking African leaders that are yet to sign the African Continental Free Trade Agreement (AfCFTA). If African leaders think that the developed nations wants us to really develop like them then they must be very naive. Every nation will always want to protect its own interest even if that interest is going to hurt other nations. The slogan America first has taken a centre stage but it seems that some Africans and their leaders are not thinking of Africa first. 

The reality of our world today is that, most developed nations are threatened by the growth and development of the developing and underdeveloped nations. The reasons for this is very obvious to any discerning observers. If Africa become developed, that means we will be producing most of what we consume and consuming most of what we are producing. The implication of this is that, the volume and value of export from developed nations to Africa will be reduced. This will consequently means that their factories will begin to shut down, their income will begin to reduce, their unemployment rate will increase and their government will loose their popularity with the people and so also the next election.

Therefore, in order to keep the developing and underdeveloped nations small they use a lot of strategies which include a Visa lottery and permanent resident programme to cause brain drain and keep African nations small. They use foreign aids to keep the Africans lazy and always look up to them for help. They attach terms and conditions to the foreign aids to hinder growth and development of the African nations. They come up with trade agreement like Economic Partnership Agreement (EPA) from the EU, African Growth Opportunity Act (AGOA) from the US with stringent terms and conditions to keep the African nations small. 

When all these strategies does not work especially for African nations that have leaders that have been liberated in their soul from the destructive effects of slavery and colonization they will start fighting you. They fight you with propaganda, they fight you with tariff and non tariff barriers, sometimes they instigate civil war to fight you. They set standards they know is unrealistic for developing nations to hinder their export like fair trade, organic certification, licensing for marine products and make the processes difficult knowing fully well that most businesses in Africa cannot meet up (this is not to say that African should not upgrade its product quality but the truth is that some of the requirements from the developed nations are not necessary). All these have affected our steel production, wheat production etc in Nigeria. It has caused Rwanda to be banned under AGOA and tariff imposed on their products by the United State because they banned the importation of used cloths and shoes from the US.

So clearly, you can see that the US gave Africa AGOA to ensure that they retain their market in Africa. The developed nations does not give you nothing for something. This is necessitating the speedy implementation of the AfCFTA so we can begin to do more trade among ourselves and thus stimulate growth and development on the African continent. Africans should not expect that trade with developed nations will increase, they should expect to see similar replay of the Rwanda-US trade isues with other African nations that are waking up from their slumber very soon. We need to grow the current export within Africa from the current level of about 18% to an enviable height. It will also grow the African share of world trade from the current level of less than 2% to a reasonable level like the European Union (EU) that contributed about 33% of world trade, North American Free Trade Agreement (NAFTA) contributed about 15%, Association of Southeast Asian Nations (ASEAN) contributed about 7% and the Gulf Cooperation Council (GCC) contributed about 6% in the year 2014. 

Finally, I will like to repeat that the US-China Trade War has reinforced the necessity of speedy implementation of AfCFTA. I will therefore like to plead with the African leaders yet to sign to go ahead and do so and those that have signed should speed up the ratification processes in their various countries. 

Bamidele Ayemibo

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