Nairobi. The latest bid by China and the United States to resolve their trade issue signals better times for global trade, from which Africa is set to benefit immensely, analysts have recently told Xinhua.
Chinese President Xi Jinping and US President Donald Trump agreed on June 29 to restart economic and trade consultations between their countries on the basis of equality and mutual respect.
This marked an important consensus after Washington’s protectionist measures and repeated backtracking had triggered a new flare-up of trade tensions between the world’s two largest economies.
Cavince Adhere, a Nairobi-based scholar on China-Africa relations, said the move was a welcome relief to the global economy.
“The trade dispute had put a strain on the global economy for far too long. The World Trade Organization (WTO) is among institutions that recently said the global economy would in 2019 and 2020 continue to face headwinds due to the trade spat,” said Adhere, adding that the truce was therefore greatly welcome.
Eric Mang’unyi, a researcher at Walter Sisulu University in South Africa, said the announcement demonstrated progress and commitment after months of difficulties.
The analysts observed that the U.S.-initiated trade dispute has had a negative impact on global trade and the economy.
“There have been shockwaves in global trade,” said Mang’unyi, noting that the United States has also locked horns with other trading partners.
In the past months, global institutions like the International Monetary Fund and the World Bank have lowered growth projections for the African continent citing the prolonged U.S.-China trade war, and it is not in the interest of anyone if this dispute continues, the researcher said.
“Protectionism does not foster competition. It leads to market instability. Some nations may lose their competitive advantage due to the dispute,” said Mang’unyi.
Adhere said Africa as a continent and its individual countries are set to benefit from the truce in many aspects, including experiencing a rise in capital inflow.
“Africa relies heavily on capital inflow, trade and investment. This cannot come if the two countries are in a tussle,” said Adhere.
He said that the truce provides a boost to Africa as the continent prepares to set up a free trade area, which is expected to increase trade and investment.