On 20 January 2017, Donald J. Trump will officially become the 45th President of the United States of America. How will his presidency affect Africa in general (especially the African economy), and what will be the impact on mining in Africa? So far, Mr Trump did not address Africa in general. On his campaign website (https://www.donaldjtrump.com/policies/), his policies are divided into 15 groups. 4 of these policy groups can be identified to have a (potential) impact on the U.S.-Africa relations, namely ‘Economy’, ‘Energy’, ‘Foreign Policy and Defeating ISIS’, and ‘Trade’.
I. Trump’s Policy on Economy, Foreign Affairs and Trade
Mr. Trump’s campaign claim was to ‘Make America great again’. Consequently, his economy policy (as described on https://www.donaldjtrump.com/policies/economy/) is focused only on the domestic economy of the United States. It can be summarized that he plans to put more U.S. citizens (back) into labor force, mainly by creating 25 million new jobs over the next decade. In a fact sheet made available online at https://www.donaldjtrump.com/press-releases/fact-sheet-donald-j.-trumps-pro-growth-economic-policy-will-create-25-milli, Mr Trump gives further details about this aim. According to this fact sheet, he intents to do a tax reform and overhaul the regulatory framework for the economy. So far, Mr Trump has not made any statements regarding raw materials scarcity (except in the context of energy resources, which will be addressed below), or on mining/raw materials in general.
Regarding the future U.S. foreign economy policy, the fact sheet states that every free trade agreement the United States are party to will be scrutinized.Given this fact sheet and many commentators (just see Reuters, “Trump victory could spell defeat for EU-U.S. trade deal”, available at http://www.reuters.com/article/us-usa-election-trade-eu-idUSKBN1342TF), it is likely that the U.S. will withdraw from the North Atlantic Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP). In addition, the envisaged Trans-Atlantic Trade and Investment Partnership (TTIP) might be even dead before its negotiations produced a final draft for this mega-regional free trade agreement.
On the one hand, from an African perspective, the ‘death of TTIP and TPP’ is not unwelcomed, as mega-regional trade agreements are considered to cause various spillovers for the countries not included in these agreements (such as all African countries), like preference erosion in global export markets, or the rise of standards making it either mandatory for African economies to meet these standards (with harsh impacts on African companies), or to risk reduced access to markets being part of the mega-regional agreements. (cf. Ciuriak, Dan and Xiao, Jingliang, “Quantifying Mega-Regional Spillovers into Excluded Countries: Impacts on East Africa”, in: Harsha V. Singh (ed.), TPP and India: Implications of Mega-regionals for Developing Economies (New Delhi: Wisdom Tree, 2016), pp. 149-197; available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2620799).
On the other hand, although with Morocco, only one African country has conluded a classical free trade agreement (which aim at abolishing custom duties and similiar barriers to trade between the parties) with the United States.(see Office of the United States Trade Representative, “Free Trade Agreements”, available at https://ustr.gov/trade-agreements/free-trade-agreements), the U.S. has concluded 9 classical bilateral investment treaties (aiming at promoting and protecting foreign investment by investors from one contracting party within the territoriy of the other contracting party) (see United Nations Conference on Trade and Development, “IIAs by Economy: United States of America”, available at http://investmentpolicyhub.unctad.org/IIA/CountryBits/223#iiaInnerMenu), and 18 so-called Trade & Investment Framework Agreements (see Office of the United States Trade Representative, “Trade & Investment Framework Agreements”, available at https://ustr.gov/trade-agreements/trade-investment-framework-agreements) with African countries and regional economic organizations. These agreements will be scrutinized – meaning that the future of these agreements is currently unclear, causing uncertainty for U.S. investors in Africa, resulting in a negative impact on the investment climate, thus a negative impact on the African economy.
II. Trump’s Energy Policy
Mr Trump intents to make the United States energy independent by exploiting deposits vested within the United States, including shale oil and gas resources. In addition, Mr Trump wants to become independent from the Organization of Petroleum Exporting Countries (OPEC). Further, Mr Trump points out that the new dominance of the United States on the energy sector should become a strategic economic and foreign policy goal of the United States (see https://www.donaldjtrump.com/policies/energy/).
However, neither Mr Trump’s speech at the ‘Shale Insight Event’ on 22 September 2016 (available at https://www.donaldjtrump.com/press-releases/trump-outlines-plan-for-american-energy-renaissance), nor his ‘First Energy Plan’ presented at the Williston Basin Petroleum Conference on 26 May 2016 (available at https://www.donaldjtrump.com/press-releases/an-america-first-energy-plan), nor his 100 Day Action Plan contain any more details on the envisaged foreign energy policy under the Trump administration (except for a ‘coalition’ with U.S.-friendly Gulf countries, but which is also not further explained), making it impossible to predict how Mr Trump’s energy policy will impact on mining in Africa.
III. Conclusion: A Rather Unpredictable Future for U.S.-Africa Relations, But A Chance for Africa?
As information on the future policy of the United States are vague, the future of the relations between the United States on the one side and African countries and regional economic organizations on the other side is rather unpredictable. Mr Tump made clear that he would put much effort into the fight against the terrorist organization Islamic State which is also active within Africa (cf. https://www.donaldjtrump.com/policies/foreign-policy-and-defeating-isis/). On the other hand, Mr Trump made clear at various occassions that the United States will not get involved into conflicts. With the lack of the United States as global military power, the likeliness of internal armed conflicts within single African countries or regions might increase. In addition, a possible re-negotiation or even termination of economic agreements between the U.S. and African countries/regions would contradict efforts to reduce poverty in Africa significantly.
Newsweek has identified these risks as well – and addresses three top priorities for Mr Trump, available at http://europe.newsweek.com/three-priorities-donald-trump-africa-521375?rm=eu.
Nevertheless, there is also a chance for Africa: as mega-regional trade agreements will be dead quite likely in the next years, bilateral trade and investment agreements will play a big role again. For African countries and economies, this might be advantageous and even contribute to economic growth – and the creation of more jobs!
(Note: All URLs were last retrieved on 1 January 2017)