Africa Policy E-Journal

USA: Africa Trade Documents, 1
Date distributed (ymd): 990307
Document reposted by APIC

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Region: Continent-Wide
Issue Areas: +economy/development+ +US policy focus+ Summary Contents:
This posting contains two documents on current bills before Congress concerning U.S. economic relations with Africa: (1)a press release (Feb. 4) from the Subcommittee on Trade of the House Committee on Ways and Means on H.R. 434, the "African Growth and Opportunty Act," (2) testimony presented on Feb. 9 by the Washington Office on Africa on behalf of the Africa Trade Policy Working Group and (3) a press release from Rep. Jesse Jackson Jr. (Feb. 23, 1999) introducing H.R. 772, the "Hope for Africa Act of 1999."

The full text of the bills, as of the end of February, is available by sending a blank e-mail message to hr434@africapolicy.org (HR434, 57K) or to hr772@africapolicy.org (HR772, 73K). A commentary from the Washington Office on Africa is in the next posting, as well as links to sites for additional background, commentary, and action alerts for groups mobilizing in favor of the Hope for Africa Act.

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FROM THE COMMITTEE ON WAYS AND MEANS Subcommittee on Trade

http://www.house.gov/ways_means/trade/106cong/tr-1.htm

February 4, 1999 No. TR 1-A

Crane Announces Subcommittee Action on H.R. 434, the "African Growth and Opportunity Act"

Congressman Philip M. Crane (R-IL), Chairman of the Subcommittee on Trade of the Committee on Ways and Means, today announced that on Wednesday, February 3, 1999, the Subcommittee ordered favorably reported to the full Committee, without amendment, H.R. 434, the "African Growth and Opportunity Act," by a recorded vote of 14-0.

DESCRIPTION OF H.R. 434 AS APPROVED:

H.R. 434, the "African Growth and Opportunity Act," would authorize a new trade and investment policy toward the countries of sub-Saharan Africa.

The bill states that the United States would seek to facilitate market-led economic growth in the countries in sub-Saharan Africa. To this end, H.R. 434 contains a statement of policy that Congress would support economic self-reliance for sub-Saharan African countries, particularly those committed to economic and political reform; market incentives and private sector growth; the eradication of poverty; and the importance of women to economic growth and development.

The bill would require the President to identify individual countries in sub-Saharan Africa that have established, or are making continual progress toward establishing, a market-based economy consistent with the criteria outlined. After consulting with the governments of eligible countries, H.R. 434 would require the President to establish a United States-sub-Saharan Africa Trade and Economic Cooperation Forum, not later than 12 months after the date of enactment, for the purpose of convening annual high-level meetings between U.S. Government officials and officials of participating sub-Saharan African countries.

H.R. 434 would also declare that a United States-sub-Saharan Africa Free Trade Area should be established, or free trade agreements entered into, to serve as the catalyst for increasing trade between the United States and sub-Saharan Africa and for increasing private sector development in the region. To this end, the bill would require the President to develop a plan for entering into one or more trade agreements with eligible sub-Saharan African countries, and report to Congress within 12 months of enactment.

The bill would also require the United States to eliminate the existing quotas on textile and apparel exports to the United States from Kenya and Mauritius within 30 days of those countries adopting visa systems to guard against unlawful transshipments of textile and apparel goods and the use of counterfeit documents. In addition, the provision would require the President to continue the existing policy of not imposing quotas on textile and apparel exports to the United States from other sub-Saharan African countries. The bill would also impose several provisions to guard against unlawful transshipment.

The bill would extend duty-free treatment under the Generalized System of Preferences (GSP) for beneficiary countries in sub-Saharan Africa that are eligible to participate in the Act until June 30, 2009. In addition, the bill would authorize the President to grant duty-free treatment to products from eligible sub-Saharan African countries that are currently excluded from the GSP program, if he receives advice from the U.S. International Trade Commission that imports of those products are not import sensitive in the context of imports from sub-Saharan Africa. The bill would also provide that the competitive need limits in the GSP program do not apply to imports from sub-Saharan African countries and would allow up to 15 percentage U.S. content of an article to count toward the 35 percent local content requirement of the GSP program. Moreover, the bill would allow imports from eligible sub-Saharan African countries to qualify for duty-free treatment under the GSP program if 35 percent of the value of the product is added in any eligible sub-Saharan African country.

H.R. 434 would direct the President to maintain a position of Assistant United States Trade Representative for Africa within the Office of the United States Trade Representative to focus on trade issues relating to sub-Saharan Africa.

Finally, the bill would require the President to submit to Congress a report on the comprehensive trade and investment policy of the United States for sub-Saharan Africa and on the implementation of the Act, not later than one year after the date of enactment, and not later than the end of each of the next six one-year periods thereafter.

The Africa Trade Policy Working Group
c/o The Washington Office on Africa
212 East Capitol Street
Washington, D.C. 20003, U.S.A.
Phone: 202/547-7503; Fax: 202/547-7505
E-Mail: woa@igc.org;
Web: www.woaafrica.org

The U.S. Stake in Trade and Investment in Africa

Written testimony submitted to the Subcommittee on Africa of the Committee on International Relations of the U.S. House of Representatives on behalf of the Africa Trade Policy Working Group by Leon P. Spencer, Executive Director, Washington Office on Africa Tuesday, February 9th, 1999

As a coalition of religious and non-profit organizations, the Africa Trade Policy Working Group has been engaged in advocating a just and mutually-beneficial American trade policy toward Africa since 1996. We welcome this opportunity to share our hopes and concerns for Africa trade legislation in this Congress.

We consider that there are certain values that are crucial to the meaningfulness and effectiveness of any U.S. trade policy toward Africa. Legislation needs to meet these touchstones:

• being mutually-beneficial - any policy that seeks only a U.S. advantage and neglects the concerns and aspirations of Africa is a flawed and ultimately counter-productive policy;
• respecting the integrity of Africa to discern and implement economic policies appropriate to the needs of their people, such discernment including the active participation of African civil society;
• recognizing that international trade must be juxtaposed with continuing development aid and with international debt relief if the social and economic hopes of Africa are to be realized; and
• affirming the need for benefits to accrue not merely to those functioning as a business elite but also to those in Africa living in poverty - trade policy demonstrating a concern in particular for the role of women and labor and for environmental integrity.

We affirm the potential for both the African Growth and Opportunity Act (H.R. 434) and the Human Rights, Opportunity, Partnership and Empowerment for Africa Act [later introduced as H.R. 772] to address these values. We have not yet had an opportunity to examine the latter, but in any Africa trade bill, we would hope that the following specific matters would be addressed:

• Any eligibility criteria to gain access to the benefits of trade legislation should avoid specific proscriptions. Given African economic realities, any Africa trade bill is necessarily a developmental trade bill. We need to acknowledge the tremendous inequities in U.S.-Africa economic capacities and the potential negative impacts of both International Monetary Fund policies and World Trade Organization proceedings upon developing nations. Demands that African nations open their doors to uncontrolled foreign investment, for example, simply make a very unequal partnership worse. For the U.S. to encourage economic reform that will strengthen and sustain Africa economically (thereby serving U.S. interests as well) is one thing; to require the adoption by African nations of policies detrimental to the social needs of Africa's peoples is quite another.
• The affirmation of development assistance as critical to economic growth is an important one to make in any Africa trade bill, and this H.R. 1432 at least attempted to do. We are puzzled by the removal of Sec. 5 of H.R. 1432, dealing with assistance under the Development Fund for Africa (DFA), in H.R. 434. That is not to say, however, that we were satisfied with that section in H.R. 1432. We believe that emphasis should be placed upon the development of an increased capacity to engage in international trade, and that would involve investments in human resources, including women social economic and political development, and implementation of fair market policies, including policies to improve food security and health care. Specifically, we call for (1) the DFA earmark for Africa to be reinstated and to be funded at an annual level not less than 1994; and (2) increased assistance through the African Development Foundation, which represents an important support for grassroots African civil society initiatives.
• The need for immediate international debt relief for Africa is as important as development assistance in an Africa trade bill. The sense of Congress is useful in H.R. 434, but specific legislation governing debt remission not bound by the Heavily Indebted Poor Countries (HIPC) initiative is essential if this stunning burden upon African economies is to be removed.
• We believe there needs to be an ongoing structure by which U.S. trade officials can hear African finance and trade officials and by which African civil society can participate in determining African economic policy. We therefore appreciate the intent of Sec. 5 in H.R. 434, both for a Forum and for annual meetings of NGOs parallel to the Forum. This opportunity for African civil society to be engaged in the discussion will not happen, however, unless (1) African NGOs are identified by other than governmental entities; (2) funding for African NGOs is provided; and (3) structures are established ensuring an active inter-relationship between the NGO meetings and the Forum. We are similarly concerned that the advisory committees of the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank include representatives from African civil society, and that there be a similar oversight committee of OPIC to administer equity and infrastructure funds.
• Expansion of U.S.-Africa trade must be mutually-beneficial, and therefore goods and services must be exchanged. We are uneasy about the provisions in section 14 of H.R. 434, dealing with the U.S. and Foreign Commercial Service. Section 14(c) is regrettably entirely one-directional, calling for an identification of U.S. goods and services for export to Africa and speaking only of the entrance by U.S. businesses into Africa. If there is a genuine commitment to mutuality in this or any Africa trade bill, then we urge that a similar effort be undertaken, perhaps by the Asst. U.S. Trade Representative for African Affairs, to identify African manufactured goods already being produced that have the potential to become a meaningful export industry, and to identify complementary small and minority business in the United States and Africa for private sector and trade development. We also appreciate the negative impact upon Africa of claims of intellectual property rights and regret the presence of that reference in section 14(c)(2).
• We need for attention to be directed more broadly upon the varied goods and services that now or in the near future will define U.S.-Africa trade. The preoccupation with textiles in H.R. 434, especially given the end, five years from now, of international textile quotas, lessens attention to oil exploration and extraction in Africa, for example, which at this moment is causing serious environmental and social consequences, especially in Nigeria. Mining also raises difficult economic, political and social questions. Rather than move forward with plans for a Free Trade Area, as H.R. 434 does, we urge legislation to replace the specifics of a Free Trade Area with a process toward increased trade that acknowledges the asymmetries of economic power between developed and developing nations. We need a process which calls for fair labor standards and environmental protection and, ultimately, economic relations that evidence respect for the needs of the African people. This can be done by mandating a plan for the purpose of entering into one or more trade agreements.

Introducing H.R. 772 "The HOPE For Africa Act Of 1999"

02/23/99 Press Release

INTRODUCING H.R. 772, "THE HOPE FOR AFRICA ACT OF 1999"
Statement By Congressman Jesse Jackson, Jr.
Tuesday, February 23, 1999

To overcome a nearly 400 year legacy of unregulated business and investment that gave us slavery, colonialism and widespread human and economic exploitation, today we introduce H.R. 772, "The HOPE for Africa Act of 1999," based on Human Rights, Opportunity, Partnership and Empowerment as the basis for a new respectful and mutually beneficial human and economic relationship.

Unregulated business and investment, structural adjustment programs built on debt service, is the status quo or worse. This status quo formula has given Africa: wealth in the hands of a few; followed inevitably by civil wars (both ethnic and tribal) over food and economic security; undemocratic regimes; and economic and political instability.

We support bilateral, multilateral and international trade. We are not economic isolationists or economic protectionists. By introducing this legislation today, we seek to establish a new principle that should underlie every trade bill in the United States -- that the benefits of trade must be shared widely by the majority of the common working people in every participating society, not just benefit the business and financial interests of an elite few.

We support business and investment in Africa. Indeed, our business development and trade provisions are more expansive than the provisions in Rep. Phil Crane's African Growth and Opportunity Act. HOPE for Africa insures that the average African worker will be paid a minimum wage; has the right to organize for their own protection and economic security; has the right to work in safe and healthy working conditions; can produce goods and protect the environment at the same time so business development and economic growth can be sustained indefinitely; and so the common people of Africa might be able to work their way out of their poverty and underdeveloped condition with dignity.

The HOPE for Africa legislation provides trade remedies that can be embraced by both working Americans and working Africans because it raises the living standards of both. It does not raise some African living standards at the expense of lowering some American living standards. It is also good for long-term business development and economic investment because average workers on both continents will be able to buy the goods and services that they produce and, in the process, build a fairer and more perfect economic world.

First, H. R. 772 affirms each African nation's right to economic self-determination. The HOPE for Africa legislation is built on the principles and goals developed by African finance ministers in cooperation with the Organization for African Unity, and with input by African workers' organizations such as COSATU in South Africa.

Second, H.R. 772 offers a solution to Sub-Saharan Africa's crushing $230 billion debt -- unconditional, comprehensive debt forgiveness. Excluding South Africa, with upwards of 20 percent of Sub-Saharan nations' export earnings going to debt service, few resources are left to devote to development and urgent local needs.

Third, H.R. 772 addresses the AIDS crisis by replenishing and targeting assistance from the Development Fund for Africa for AIDS education and treatment programs; making it U.S. policy to assist Sub-Saharan African countries in efforts to make needed pharmaceuticals and medical technologies widely available; and prohibiting the use of U.S. funds to undermine African intellectual property and competition policies that are designed to increase the availability of medications. Since the beginning of the AIDS epidemic, 83 percent of AIDS deaths have occurred in Sub-Saharan Africa.

Fourth, H.R. 772 restores Africa's budget line item for foreign aid with a set guaranteed amount, not to decline below 1994 levels. This would restore parity for Africa with U.S. foreign aid treatment of other vital regions. Currently, Africa is the only region not a line item in the budget.

Finally, President Clinton says we must put a new and human face on trade -- and I agree. But the new face must be based on a new foundation. The policies regarding Africa that the Congress sets now will deeply affect the economic future of the continent and, thus, the future of the African people for decades to come. With such high stakes, it is vital that we get the initial policy right. With this in mind, I submit H.R. 772, which has the broad-based support of African and U.S. development, trade and economic experts and also organizations in Africa and the U.S., representing the interests of the majority of the people who will be affected.

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