A closer look at the North American Free Trade Agreement (NAFTA) and The African Growth and Opportunity Act (AGOA). Trump’s foreign policy has been received by the world with mixed feeling with others calling him a nationalist, populist and isolationist while others saw him as a messiah who came to make America great again through his America First mantra.
By Tanatsiwa Dambuza
However, his nemesis Joe Biden who went on to defeat Trump in the recently held US election seems to be more liberal and is seeking to revise most of Trump’s foreign policy decisions to align them with his goals. Some of the Trump’s foreign policy decisions that awed the world include; his withdrawal from the Joint Comprehensive Plan of Action (JCPOA) or Iranian nuclear deal which he labeled as a “horrible one-sided deal”, withdrawal from the the Trans-Pacific Partnership (TPP), and the Paris Agreement which he cited as a “onerous energy restriction”.
Besides, that he also threatened to withdraw from NATO, WHO and WTO which clearly shows his negative feelings towards the multilateral system and his addiction for bilateralism and at times unilateralism. During his tenure, Trump also sought after renegotiating trade deals especially the North American Free Trade Agreement (NAFTA) which he viewed as “a deal that carried bad connotations”. This paper however, will focus on the stance of Trump and Biden’s administrations on NAFTA and AGOA.
What is North American Free Trade Agreement (NAFTA)?
NAFTA is Free Trade Agreement (FTA) is a treaty that was signed under the presidency of George H. W Bush between US, Mexico and Canada in 1994 in order to remove trade barriers between these countries. Key features of this include the elimination of tariffs on imports and exports between the US, Mexico and Canada. Since, its commencement, NAFTA, according to Donald Trump the trade deal has unfair to the US trade deficit that is why in 2018 with full support of both Democrats and Republicans, his government repealed it and replaced it with the US-Mexico-Canada Agreement (US-M-CA). The US-M-CA deal began to operate in 2020 and is set to expire in 2036 if its member states fail to renew it.
What is The African Growth and Opportunity Act (AGOA)?
According to AGOA.Info, the AGOA is the United States Trade Act, enacted on 18 May 2000 as Public Law 106 of the 200th Congress which seeks to Â enhance market access to the US for qualifying Sub-Saharan African (SSA) countries. For one country to be eligible of the AGOA preference, it has to meet eligibility requirements that are stipulated in section 104 of the Act. These requirements include that; a country has to liberalize its economy, respect the rule of law, eliminate trade barriers, provision of social services and protection of workers rights among other requirements. It is also important to note that, the US has the power to unilaterally suspend a country from AGOA if it disrespect the terms and conditions of the agreement. Since, the ACT was passed some countries such as Zimbabwe have never been approved to be part of AGOA whilst other states like Rwanda, Madagascar, and Swaziland have been suspended as the beneficiaries of the act. Initially, the AGOA was supposed to expire in 2015 but the Obama administration extended the legislation to 2025.
Trump-Biden and NAFTA
It is well known that Biden is one of the Senators who supported the enactment of what came to be known as one of the most controversial free trade agreements whilst Trump is the president who reviewed it with mountainous support from both democrats and republicans. Besides that, Biden seems to be in support of the USMCA and from the looks of it, it is one of the few trade agreements that were introduced by Trump that he is not seeking to review at least in the near future. Of course Trump is criticized for many of his protectionist anti-multilateralism decisions but, his review of NAFTA is one of the wins that US experienced under his leadership. This is because it is a huge win for American workers, farmers and businesses and the deal is backed by labor unions, and the generality of US citizens.
Despite the fact that the agreement was opposed by the environmentalists such as Sierra Club, the League of Conservation Voters, and the Natural Resources Defense Council, Biden himself testified that he supported the USMCA especially because the vast majority of the labor movement supported it unlike when NAFTA was enacted in 1993. Also in one of the interviews, Biden admitted that USMCA was better than NAFTA because it was a victory for workers. Biden also appointed Kathrine Tai as the U.S. Trade Representative (USTR) and Nora Todd as chief of staff for the USTR’s office who were key in the ratification of the USMCA shows his will to protect and implement USMCA.
This modernized NAFTA is praised by both Republicans and Democrats as a gold standard for trade agreements in terms of its labor and environmental provisions. Therefore, despite the fact that the Trump and Biden administrations have differences in their view towards international trade and diplomacy, it is clear that there is a consensus when it comes to the ratification and operation of NAFTA 2.0 or USMCA.
Trump-Biden and AGOA
As elaborated above the AGOA is a US Trade Act seeks to Â enhance market access to the US for qualifying Sub-Saharan African (SSA) countries. Over the years generally ranked near the bottom of US foreign policy priorities and up to date Besides Morocco, there is no other African state that has signed a Free Trade Agreement with the US. This trend defies the goal of the AGOA to bring African states up to the high standards necessary to achieve a formal FTA with the United States. However, the Trump administration showed interest in venturing into real trade agreements with African states when the US entered negotiations with Kenya for a FTA in 2020. This is one sign of Trump’s addiction to bilateral agreements over multilateralism. This initiative was a blueprint to replace AGOA on its expiry in 2025.
Additionally, during his tenure, Trump suspended some SSA states such as Rwanda, Cameroon, Mauritania were either suspended or lost their AGOA preferences in certain trading sectors were withdrawn due to different reasons such as human rights abuse and protectionism among other factors. The administration in December 2020 reinstated DRC, a country which was suspended in 2010 for its failure to make continual progress in meeting the requirements described in section 111(a) of the AGOA. DRC was also declared an eligible lesser developed beneficiary SSA country for the purposes of textile preferences under the favourable third country fabric rules of origin.
In this respect, Biden inherited some of the trade policies that were harmful and also favorable to US-Africa trade relations. This explains the reasons why his USTR, Tai, announced the need to review all trade agreements and policies that were put in place during the tenure of Donald Trump. In April 2021, the administration confirmed that the FTA talks with Kenya will continue despite their harm to the integration of African economies through the AfCFTA under Agenda 2063. With the Biden’s continuity of such agreements, it is difficult to predict whether his administration will renew the AGOA or not. But if it does, the deal must be based reciprocity not on zero sum game. Therefore, it is clear that at the moment Biden’s administration does not have a clear stance on how to deal with Africa through AGOA but, surely as time goes by clarity will manifest through policy documents, speeches and other means possible.
In summation, Donald Trump and Joe Biden’s administrations have proven to be opposed in most of their trade policy initiatives and agreements but, when it comes to the review of NAFTA and the way they deal with Africa, it seems like they are consensual so far. However, since is just the beginning of Biden’s rule, time will tell whether he is genuinely in support of NAFTA 2.0 and trade talks with Kenya or not. Thus, it is important for those interested in International trade and diplomacy to keep a close eye on the Biden administration moves in North America, Africa and beyond.
Tanatsiwa Dambuza is Political Science graduate at the University of Zimbabwe and is currently studying MSc in International Trade and Diplomacy.Feedback: email@example.com/ +263785070618