[House Report 106-19]
[From the U.S. Government Publishing Office]
106th Congress Report
1st Session HOUSE OF REPRESENTATIVES 106-19, Part 1
_______________________________________________________________________
AFRICAN GROWTH AND OPPORTUNITY ACT
_______
February 16, 1999.--Ordered to be printed
_______________________________________________________________________
Mr. Gilman, from the Committee on International Relations, submitted
the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 434]
The Committee on International Relations, to whom was
referred the bill (H.R. 434) to authorize a new trade and
investment policy for sub-Saharan Africa, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``African Growth and Opportunity Act''.
SEC. 2. FINDINGS.
The Congress finds that it is in the mutual economic interest of the
United States and sub-Saharan Africa to promote stable and sustainable
economic growth and development in sub-Saharan Africa and that
sustained economic growth in sub-Saharan Africa depends in large
measure upon the development of a receptive environment for trade and
investment. To that end, the United States seeks to facilitate market-
led economic growth in, and thereby the social and economic development
of, the countries of sub-Saharan Africa. In particular, the United
States seeks to assist sub-Saharan African countries, and the private
sector in those countries, to achieve economic self-reliance by--
(1) strengthening and expanding the private sector in sub-
Saharan Africa, especially women-owned businesses;
(2) encouraging increased trade and investment between the
United States and sub-Saharan Africa;
(3) reducing tariff and nontariff barriers and other trade
obstacles;
(4) expanding United States assistance to sub-Saharan
Africa's regional integration efforts;
(5) negotiating free trade areas;
(6) establishing a United States-Sub-Saharan Africa Trade and
Investment Partnership;
(7) focusing on countries committed to accountable
government, economic reform, and the eradication of poverty;
(8) establishing a United States-Sub-Saharan Africa Economic
Cooperation Forum; and
(9) continuing to support development assistance for those
countries in sub-Saharan Africa attempting to build civil
societies.
SEC. 3. STATEMENT OF POLICY.
The Congress supports economic self-reliance for sub-Saharan African
countries, particularly those committed to--
(1) economic and political reform;
(2) market incentives and private sector growth;
(3) the eradication of poverty; and
(4) the importance of women to economic growth and
development.
SEC. 4. ELIGIBILITY REQUIREMENTS.
(a) In General.--A sub-Saharan African country shall be eligible to
participate in programs, projects, or activities, or receive assistance
or other benefits under this Act if the President determines that the
country does not engage in gross violations of internationally
recognized human rights and has established, or is making continual
progress toward establishing, a market-based economy, such as the
establishment and enforcement of appropriate policies relating to--
(1) promoting free movement of goods and services between the
United States and sub-Saharan Africa and among countries in
sub-Saharan Africa;
(2) promoting the expansion of the production base and the
transformation of commodities and nontraditional products for
exports through joint venture projects between African and
foreign investors;
(3) trade issues, such as protection of intellectual property
rights, improvements in standards, testing, labeling and
certification, and government procurement;
(4) the protection of property rights, such as protection
against expropriation and a functioning and fair judicial
system;
(5) the protection of internationally recognized worker
rights, including the right of association, the right to
organize and bargain collectively, a prohibition on the use of
any form of forced or compulsory labor, a minimum age for the
employment of children, and acceptable conditions of work with
respect to minimum wages, hours of work, and occupational
safety and health;
(6) appropriate fiscal systems, such as reducing high import
and corporate taxes, controlling government consumption,
participation in bilateral investment treaties, and the
harmonization of such treaties to avoid double taxation;
(7) foreign investment issues, such as the provision of
national treatment for foreign investors, removing restrictions
on investment, and other measures to create an environment
conducive to domestic and foreign investment;
(8) supporting the growth of regional markets within a free
trade area framework;
(9) governance issues, such as eliminating government
corruption, minimizing government intervention in the market
such as price controls and subsidies, and streamlining the
business license process;
(10) supporting the growth of the private sector, in
particular by promoting the emergence of a new generation of
African entrepreneurs;
(11) encouraging the private ownership of government-
controlled economic enterprises through divestiture programs;
and
(12) observing the rule of law, including equal protection
under the law and the right to due process and a fair trial.
(b) Additional Factors.--In determining whether a sub-Saharan African
country is eligible under subsection (a), the President shall take into
account the following factors:
(1) An expression by such country of its desire to be an
eligible country under subsection (a).
(2) The extent to which such country has made substantial
progress toward--
(A) reducing tariff levels;
(B) binding its tariffs in the World Trade
Organization and assuming meaningful binding
obligations in other sectors of trade; and
(C) eliminating nontariff barriers to trade.
(3) Whether such country, if not already a member of the
World Trade Organization, is actively pursuing membership in
that Organization.
(4) Where applicable, the extent to which such country is in
material compliance with its obligations to the International
Monetary Fund and other international financial institutions.
(5) The extent to which such country has a recognizable
commitment to reducing poverty, increasing the availability of
health care and educational opportunities, the expansion of
physical infrastructure in a manner designed to maximize
accessibility, increased access to market and credit facilities
for small farmers and producers, and improved economic
opportunities for women as entrepreneurs and employees, and
promoting and enabling the formation of capital to support the
establishment and operation of micro-enterprises.
(6) Whether or not such country engages in activities that
undermine United States national security or foreign policy
interests.
(c) Continuing Compliance.--
(1) Monitoring and review of certain countries.--The
President shall monitor and review the progress of sub-Saharan
African countries in order to determine their current or
potential eligibility under subsection (a). Such determinations
shall be based on quantitative factors to the fullest extent
possible and shall be included in the annual report required by
section 15.
(2) Ineligibility of certain countries.--A sub-Saharan
African country described in paragraph (1) that has not made
continual progress in meeting the requirements with which it is
not in compliance shall be ineligible to participate in
programs, projects, or activities, or receive assistance or
other benefits, under this Act.
SEC. 5. UNITED STATES-SUB-SAHARAN AFRICA TRADE AND ECONOMIC COOPERATION
FORUM.
(a) Declaration of Policy.--The President shall convene annual high-
level meetings between appropriate officials of the United States
Government and officials of the governments of sub-Saharan African
countries in order to foster close economic ties between the United
States and sub-Saharan Africa.
(b) Establishment.--Not later than 12 months after the date of the
enactment of this Act, the President, after consulting with Congress
and the governments concerned, shall establish a United States-Sub-
Saharan Africa Trade and Economic Cooperation Forum (hereafter in this
section referred to as the ``Forum'').
(c) Requirements.--In creating the Forum, the President shall meet
the following requirements:
(1) The President shall direct the Secretary of Commerce, the
Secretary of the Treasury, the Secretary of State, and the
United States Trade Representative to host the first annual
meeting with the counterparts of such Secretaries from the
governments of sub-Saharan African countries eligible under
section 4, the Secretary General of the Organization of African
Unity, and government officials from other appropriate
countries in Africa, to discuss expanding trade and investment
relations between the United States and sub-Saharan Africa and
the implementation of this Act including encouraging joint
ventures between small and large businesses.
(2)(A) The President, in consultation with the Congress,
shall encourage United States nongovernmental organizations to
host annual meetings with nongovernmental organizations from
sub-Saharan Africa in conjunction with the annual meetings of
the Forum for the purpose of discussing the issues described in
paragraph (1).
(B) The President, in consultation with the Congress, shall
encourage United States representatives of the private sector
to host annual meetings with representatives of the private
sector from sub-Saharan Africa in conjunction with the annual
meetings of the Forum for the purpose of discussing the issues
described in paragraph (1).
(3) The President shall, to the extent practicable, meet with
the heads of governments of sub-Saharan African countries
eligible under section 4 not less than once every two years for
the purpose of discussing the issues described in paragraph
(1). The first such meeting should take place not later than
twelve months after the date of the enactment of this Act.
(d) Dissemination of Information by USIA.--In order to assist in
carrying out the purposes of the Forum, the United States Information
Agency shall disseminate regularly, through multiple media, economic
information in support of the free market economic reforms described in
this Act.
(e) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section.
(f) Limitation on Use of Funds.--None of the funds authorized under
this section may be used to create or support any nongovernmental
organization for the purpose of expanding or facilitating trade between
the United States and sub-Saharan Africa.
SEC. 6. UNITED STATES-SUB-SAHARAN AFRICA FREE TRADE AREA.
(a) Declaration of Policy.--The Congress declares that a United
States-Sub-Saharan Africa Free Trade Area should be established, or
free trade agreements should be entered into, in order to serve as the
catalyst for increasing trade between the United States and sub-Saharan
Africa and increasing private sector development in sub-Saharan Africa.
(b) Plan Requirement.--
(1) In general.--The President, taking into account the
provisions of the treaty establishing the African Economic
Community and the willingness of the governments of sub-Saharan
African countries to engage in negotiations to enter into free
trade agreements, shall develop a plan for the purpose of
entering into one or more trade agreements with sub-Saharan
African countries eligible under section 4 in order to
establish a United States-Sub-Saharan Africa Free Trade Area
(hereafter in this section referred to as the ``Free Trade
Area'').
(2) Elements of plan.--The plan shall include the following:
(A) The specific objectives of the United States with
respect to the establishment of the Free Trade Area and
a suggested timetable for achieving those objectives.
(B) The benefits to both the United States and sub-
Saharan Africa with respect to the Free Trade Area.
(C) A mutually agreed-upon timetable for establishing
the Free Trade Area.
(D) The implications for and the role of regional and
sub-regional organizations in sub-Saharan Africa with
respect to the Free Trade Area.
(E) Subject matter anticipated to be covered by the
agreement for establishing the Free Trade Area and
United States laws, programs, and policies, as well as
the laws of participating eligible African countries
and existing bilateral and multilateral and economic
cooperation and trade agreements, that may be affected
by the agreement or agreements.
(F) Procedures to ensure the following:
(i) Adequate consultation with the Congress
and the private sector during the negotiation
of the agreement or agreements for establishing
the Free Trade Area.
(ii) Consultation with the Congress regarding
all matters relating to implementation of the
agreement or agreements.
(iii) Approval by the Congress of the
agreement or agreements.
(iv) Adequate consultations with the relevant
African governments and African regional and
subregional intergovernmental organizations
during the negotiations of the agreement or
agreements.
(c) Reporting Requirement.--Not later than 12 months after the date
of the enactment of this Act, the President shall prepare and transmit
to the Congress a report containing the plan developed pursuant to
subsection (b).
SEC. 7. ELIMINATING TRADE BARRIERS AND ENCOURAGING EXPORTS.
(a) Findings.--The Congress makes the following findings:
(1) The lack of competitiveness of sub-Saharan Africa in the
global market, especially in the manufacturing sector, make it
a limited threat to market disruption and no threat to United
States jobs.
(2) Annual textile and apparel exports to the United States
from sub-Saharan Africa represent less than 1 percent of all
textile and apparel exports to the United States, which totaled
$54,001,863,000 in 1997.
(3) Sub-Saharan Africa has limited textile manufacturing
capacity. During 1999 and the succeeding 4 years, this limited
capacity to manufacture textiles and apparel is projected to
grow at a modest rate. Given this limited capacity to export
textiles and apparel, it will be very difficult for these
exports from sub-Saharan Africa, during 1999 and the succeeding
9 years, to exceed 3 percent annually of total imports of
textile and apparel to the United States. If these exports from
sub-Saharan Africa remain around 3 percent of total imports,
they will not represent a threat to United States workers,
consumers, or manufacturers.
(b) Sense of the Congress.--It is the sense of the Congress that--
(1) it would be to the mutual benefit of the countries in
sub-Saharan Africa and the United States to ensure that the
commitments of the World Trade Organization and associated
agreements are faithfully implemented in each of the member
countries, so as to lay the groundwork for sustained growth in
textile and apparel exports and trade under agreed rules and
disciplines;
(2) reform of trade policies in sub-Saharan Africa with the
objective of removing structural impediments to trade,
consistent with obligations under the World Trade Organization,
can assist the countries of the region in achieving greater and
greater diversification of textile and apparel export
commodities and products and export markets; and
(3) the President should support textile and apparel trade
reform in sub-Saharan Africa by, among other measures,
providing technical assistance, sharing of information to
expand basic knowledge of how to trade with the United States,
and encouraging business-to-business contacts with the region.
(c) Treatment of Quotas.--
(1) Kenya and mauritius.--Pursuant to the Agreement on
Textiles and Clothing, the United States shall eliminate the
existing quotas on textile and apparel exports to the United
States--
(A) from Kenya within 30 days after that country
adopts an efficient visa system to guard against
unlawful transshipment of textile and apparel goods and
the use of counterfeit documents; and
(B) from Mauritius within 30 days after that country
adopts such a visa system.
The Customs Service shall provide the necessary technical
assistance to Kenya and Mauritius in the development and
implementation of those visa systems.
(2) Other sub-saharan countries.--The President shall
continue the existing no quota policy for countries in sub-
Saharan Africa. The President shall submit to the Congress, not
later than March 31 of each year, a report on the growth in
textiles and apparel exports to the United States from
countries in sub-Saharan Africa in order to protect United
States consumers, workers, and textile manufacturers from
economic injury on account of the no quota policy.
(d) Customs Procedures and Enforcement.--
(1) Actions by countries against transshipment and
circumvention.--The President should ensure that any country in
sub-Saharan Africa that intends to export textile and apparel
goods to the United States--
(A) has in place a functioning and effective visa
system and domestic laws and enforcement procedures to
guard against unlawful transshipment of textile and
apparel goods and the use of counterfeit documents; and
(B) will cooperate fully with the United States to
address and take action necessary to prevent
circumvention, as provided in Article 5 of the
Agreement on Textiles and Clothing.
(2) Penalties against exporters.--If the President
determines, based on sufficient evidence, that an exporter has
willfully falsified information regarding the country of
origin, manufacture, processing, or assembly of a textile or
apparel article for which duty-free treatment under section
503(a)(1)(C) of the Trade Act of 1974 is claimed, then the
President shall deny to such exporter, and any successors of
such exporter, for a period of 2 years, duty-free treatment
under such section for textile and apparel articles.
(3) Applicability of united states laws and procedures.--All
provisions of the laws, regulations, and procedures of the
United States relating to the denial of entry of articles or
penalties against individuals or entities for engaging in
illegal transshipment, fraud, or other violations of the
customs laws shall apply to imports from Sub-Saharan countries.
(4) Monitoring and reports to congress.--The Customs Service
shall monitor and the Commissioner of Customs shall submit to
the Congress, not later than March 31 of each year, a report on
the effectiveness of the visa systems described in subsection
(c)(1) and paragraph (1) of this subsection and on measures
taken by countries in Sub-Saharan Africa which export textiles
or apparel to the United States to prevent circumvention as
described in Article 5 of the Agreement on Textiles and
Clothing.
(e) Definition.--For purposes of this section, the term ``Agreement
on Textiles and Clothing'' means the Agreement on Textiles and Clothing
referred to in section 101(d)(4) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(4)).
SEC. 8. GENERALIZED SYSTEM OF PREFERENCES.
(a) Preferential Tariff Treatment for Certain Articles.--Section
503(a)(1) of the Trade Act of 1974 (19 U.S.C. 2463(a)(1)) is amended--
(1) by redesignating subparagraph (C) as subparagraph (D);
and
(2) by inserting after subparagraph (B) the following:
``(C) Eligible countries in sub-saharan africa.--The
President may provide duty-free treatment for any
article set forth in paragraph (1) of subsection (b)
that is the growth, product, or manufacture of an
eligible country in sub-Saharan Africa that is a
beneficiary developing country, if, after receiving the
advice of the International Trade Commission in
accordance with subsection (e), the President
determines that such article is not import-sensitive in
the context of imports from eligible countries in sub-
Saharan Africa. This subparagraph shall not affect the
designation of eligible articles under subparagraph
(B).''.
(b) Rules of Origin.--Section 503(a)(2) of the Trade Act of 1974 (19
U.S.C. 2463(a)(2)) is amended by adding at the end the following:
``(C) Eligible countries in sub-saharan africa.--For
purposes of determining the percentage referred to in
subparagraph (A) in the case of an article of an
eligible country in sub-Saharan Africa that is a
beneficiary developing country--
``(i) if the cost or value of materials
produced in the customs territory of the United
States is included with respect to that
article, an amount not to exceed 15 percent of
the appraised value of the article at the time
it is entered that is attributed to such United
States cost or value may be applied toward
determining the percentage referred to in
subparagraph (A); and
``(ii) the cost or value of the materials
included with respect to that article that are
produced in any beneficiary developing country
that is an eligible country in sub-Saharan
Africa shall be applied in determining such
percentage.''.
(c) Waiver of Competitive Need Limitation.--Section 503(c)(2)(D) of
the Trade Act of 1974 (19 U.S.C. 2463(c)(2)(D)) is amended to read as
follows:
``(D) Least-developed beneficiary developing
countries and eligible countries in sub-saharan
africa.--Subparagraph (A) shall not apply to any least-
developed beneficiary developing country or any
eligible country in sub-Saharan Africa.''.
(d) Extension of Program.--Section 505 of the Trade Act of 1974 (19
U.S.C. 2465) is amended to read as follows:
``SEC. 505. DATE OF TERMINATION.
``(a) Countries in Sub-Saharan Africa.--No duty-free treatment
provided under this title shall remain in effect after June 30, 2009,
with respect to beneficiary developing countries that are eligible
countries in sub-Saharan Africa.
``(b) Other Countries.--No duty-free treatment provided under this
title shall remain in effect after June 30, 1999, with respect to
beneficiary developing countries other than those provided for in
subsection (a).''.
(e) Definition.--Section 507 of the Trade Act of 1974 (19 U.S.C.
2467) is amended by adding at the end the following:
``(6) Eligible country in sub-saharan africa.--The terms
`eligible country in sub-Saharan Africa' and `eligible
countries in sub-Saharan Africa' mean a country or countries
that the President has determined to be eligible under section
4 of the African Growth and Opportunity Act.''.
(f) Effective Date.--The amendments made by this section take effect
on July 1, 1999.
SEC. 9. INTERNATIONAL FINANCIAL INSTITUTIONS AND DEBT REDUCTION.
(a) Better Mechanisms To Further Goals for Sub-Saharan Africa.--It is
the sense of the Congress that the Secretary of the Treasury should
instruct the United States Executive Directors of the International
Bank for Reconstruction and Development, the International Monetary
Fund, and the African Development Bank to use the voice and votes of
the Executive Directors to encourage vigorously their respective
institutions to develop enhanced mechanisms which further the following
goals in eligible countries in sub-Saharan Africa:
(1) Strengthening and expanding the private sector,
especially among women-owned businesses.
(2) Reducing tariffs, nontariff barriers, and other trade
obstacles, and increasing economic integration.
(3) Supporting countries committed to accountable government,
economic reform, the eradication of poverty, and the building
of civil societies.
(4) Supporting deep debt reduction at the earliest possible
date with the greatest amount of relief for eligible poorest
countries under the ``Heavily Indebted Poor Countries'' (HIPC)
debt initiative.
(b) Sense of Congress.--It is the sense of the Congress that relief
provided to countries in sub-Saharan Africa which qualify for the
Heavily Indebted Poor Countries debt initiative should primarily be
made through grants rather than through extended-term debt, and that
interim relief or interim financing should be provided for eligible
countries that establish a strong record of macroeconomic reform.
SEC. 10. EXECUTIVE BRANCH INITIATIVES.
(a) Statement of Congress.--The Congress recognizes that the stated
policy of the executive branch in 1997, the ``Partnership for Growth
and Opportunity in Africa'' initiative, is a step toward the
establishment of a comprehensive trade and development policy for sub-
Saharan Africa. It is the sense of the Congress that this Partnership
is a companion to the policy goals set forth in this Act.
(b) Technical Assistance To Promote Economic Reforms and
Development.--In addition to continuing bilateral and multilateral
economic and development assistance, the President shall target
technical assistance toward--
(1) developing relationships between United States firms and
firms in sub-Saharan Africa through a variety of business
associations and networks;
(2) providing assistance to the governments of sub-Saharan
African countries to--
(A) liberalize trade and promote exports;
(B) bring their legal regimes into compliance with
the standards of the World Trade Organization in
conjunction with membership in that Organization;
(C) make financial and fiscal reforms; and
(D) promote greater agribusiness linkages;
(3) addressing such critical agricultural policy issues as
market liberalization, agricultural exportdevelopment, and
agribusiness investment in processing and transporting agricultural
commodities;
(4) increasing the number of reverse trade missions to
growth-oriented countries in sub-Saharan Africa;
(5) increasing trade in services; and
(6) encouraging greater sub-Saharan participation in future
negotiations in the World Trade Organization on services and
making further commitments in their schedules to the General
Agreement on Trade in Services in order to encourage the
removal of tariff and nontariff barriers.
SEC. 11. SUB-SAHARAN AFRICA INFRASTRUCTURE FUND.
(a) Initiation of Funds.--It is the sense of the Congress that the
Overseas Private Investment Corporation should exercise the authorities
it has to initiate an equity fund or equity funds in support of
projects in the countries in sub-Saharan Africa, in addition to the
existing equity fund for sub-Saharan Africa created by the Corporation.
(b) Structure and Types of Funds.--
(1) Structure.--Each fund initiated under subsection (a)
should be structured as a partnership managed by professional
private sector fund managers and monitored on a continuing
basis by the Corporation.
(2) Capitalization.--Each fund should be capitalized with a
combination of private equity capital, which is not guaranteed
by the Corporation, and debt for which the Corporation provides
guaranties.
(3) Infrastructure fund.--One or more of the funds, with
combined assets of up to $500,000,000, should be used in
support of infrastructure projects in countries of sub-Saharan
Africa.
(4) Emphasis.--The Corporation shall ensure that the funds
are used to provide support in particular to women
entrepreneurs and to innovative investments that expand
opportunities for women and maximize employment opportunities
for poor individuals.
SEC. 12. OVERSEAS PRIVATE INVESTMENT CORPORATION AND EXPORT-IMPORT BANK
INITIATIVES.
(a) Overseas Private Investment Corporation.--
(1) Advisory committee.--Section 233 of the Foreign
Assistance Act of 1961 is amended by adding at the end the
following:
``(e) Advisory Committee.--The Board shall take prompt measures to
increase the loan, guarantee, and insurance programs, and financial
commitments, of the Corporation in sub-Saharan Africa, including
through the use of an advisory committee to assist the Board in
developing and implementing policies, programs, and financial
instruments with respect to sub-Saharan Africa. In addition, the
advisory committee shall make recommendations to the Board on how the
Corporation can facilitate greater support by the United States for
trade and investment with and in sub-Saharan Africa. The advisory
committee shall terminate 4 years after the date of the enactment of
this subsection.''.
(2) Reports to the congress.--Within 6 months after the date
of the enactment of this Act, and annually for each of the 4
years thereafter, the Board of Directors of the Overseas
Private Investment Corporation shall submit to the Congress a
report on the steps that the Board has taken to implement
section 233(e) of the Foreign Assistance Act of 1961 (as added
by paragraph (1)) and any recommendations of the advisory board
established pursuant to such section.
(b) Export-Import Bank.--
(1) Advisory committee for sub-saharan africa.--Section 2(b)
of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)) is
amended by inserting after paragraph (12) the following:
``(13)(A) The Board of Directors of the Bank shall take prompt
measures, consistent with the credit standards otherwise required by
law, to promote the expansion of the Bank's financial commitments in
sub-Saharan Africa under the loan, guarantee, and insurance programs of
the Bank.
``(B)(i) The Board of Directors shall establish and use an advisory
committee to advise the Board of Directors on the development and
implementation of policies and programs designed to support the
expansion described in subparagraph (A).
``(ii) The advisory committee shall make recommendations to the Board
of Directors on how the Bank can facilitate greater support by United
States commercial banks for trade with sub-Saharan Africa.
``(iii) The advisory committee shall terminate 4 years after the date
of the enactment of this subparagraph.''.
(2) Reports to the congress.--Within 6 months after the date
of the enactment of this Act, and annually for each of the 4
years thereafter, the Board of Directors of the Export-Import
Bank ofthe United States shall submit to the Congress a report
on the steps that the Board has taken to implement section 2(b)(13)(B)
of the Export-Import Bank Act of 1945 (as added by paragraph (1)) and
any recommendations of the advisory committee established pursuant to
such section.
SEC. 13. ASSISTANT UNITED STATES TRADE REPRESENTATIVE FOR SUB-SAHARAN
AFRICA.
(a) Sense of Congress.--It is the sense of the Congress that the
position of Assistant United States Trade Representative for African
Affairs is integral to the United States commitment to increasing
United States--sub-Saharan African trade and investment.
(b) Maintenance of Position.--The President shall maintain a position
of Assistant United States Trade Representative for African Affairs
within the Office of the United States Trade Representative to direct
and coordinate interagency activities on United States-Africa trade
policy and investment matters and serve as--
(1) a primary point of contact in the executive branch for
those persons engaged in trade between the United States and
sub-Saharan Africa; and
(2) the chief advisor to the United States Trade
Representative on issues of trade with Africa.
(c) Funding and Staff.--The President shall ensure that the Assistant
United States Trade Representative for African Affairs has adequate
funding and staff to carry out the duties described in subsection (b),
subject to the availability of appropriations.
SEC. 14. EXPANSION OF THE UNITED STATES AND FOREIGN COMMERCIAL SERVICE
IN SUB-SAHARAN AFRICA.
(a) Findings.--The Congress makes the following findings:
(1) The United States and Foreign Commercial Service
(hereafter in this section referred to as the ``Commercial
Service'') plays an important role in helping United States
businesses identify export opportunities and develop reliable
sources of information on commercial prospects in foreign
countries.
(2) During the 1980s, the presence of the Commercial Service
in sub-Saharan Africa consisted of 14 professionals providing
services in eight countries. By early 1997, that presence had
been reduced by half to seven, in only four countries.
(3) Since 1997, the Department of Commerce has slowly begun
to increase the presence of the Commercial Service in sub-
Saharan Africa, adding five full-time officers to established
posts.
(4) Although the Commercial Service Officers in these
countries have regional responsibilities, this kind of coverage
does not adequately service theneeds of United States
businesses attempting to do business in sub-Saharan Africa.
(5) The Congress has, on several occasions, encouraged the
Commercial Service to focus its resources and efforts in
countries or regions in Europe or Asia to promote greater
United States export activity in those markets.
(6) Because market information is not widely available in
many sub-Saharan African countries, the presence of additional
Commercial Service Officers and resources can play a
significant role in assisting United States businesses in
markets in those countries.
(b) Appointments.--Subject to the availability of appropriations, by
not later than December 31, 2000, the Secretary of Commerce, acting
through the Assistant Secretary of Commerce and Director General of the
United States and Foreign Commercial Service, shall take steps to
ensure that--
(1) at least 20 full-time Commercial Service employees are
stationed in sub-Saharan Africa; and
(2) full-time Commercial Service employees are stationed in
not less than ten different sub-Saharan African countries.
(c) Commercial Service Initiative for Sub-Saharan Africa.--In order
to encourage the export of United States goods and services to sub-
Saharan African countries, the Commercial Service shall make a special
effort to--
(1) identify United States goods and services which are not
being exported to sub-Saharan African countries but which are
being exported to those countries by competitor nations;
(2) identify, where appropriate, trade barriers and
noncompetitive actions, including violations of intellectual
property rights, that are preventing or hindering sales of
United States goods and services to, or the operation of United
States companies in, sub-Saharan Africa;
(3) present, periodically, a list of the goods and services
identified under paragraph (1), and any trade barriers or
noncompetitive actions identified under paragraph (2), to
appropriate authorities in sub-Saharan African countries with a
view to securing increased market access for United States
exporters of goods and services;
(4) facilitate the entrance by United States businesses into
the markets identified under paragraphs (1) and (2); and
(5) monitor and evaluate the results of efforts to increase
the sales of goods and services in such markets.
(d) Reports to Congress.--Not later than one year after the date of
the enactment of this Act, and each year thereafter for five years, the
Secretary of Commerce, in consultation with the Secretary of State,
shall report to the Congress on actions taken to carry out subsections
(b) and (c). Each report shall specify--
(1) in what countries full-time Commercial Service Officers
are stationed, and the number of such officers placed in each
such country;
(2) the effectiveness of the presence of the additional
Commercial Service Officers in increasing United States exports
to sub-Saharan African countries; and
(3) the specific actions taken by Commercial Service
Officers, both in sub-Saharan African countries and in the
United States, to carry out subsection (c), including
identifying a list of targeted export sectors and countries.
SEC. 15. REPORTING REQUIREMENT.
The President shall submit to the Congress, not later than 1 year
after the date of the enactment of this Act, and not later than the end
of each of the next 6 1-year periods thereafter, a comprehensive report
on the trade and investment policy of the United States for sub-Saharan
Africa, and on the implementation of this Act. The last report required
by section 134(b) of the Uruguay Round Agreements Act (19 U.S.C.
3554(b)) shall be consolidated and submitted with the first report
required by this section.
SEC. 16. DONATION OF AIR TRAFFIC CONTROL EQUIPMENT TO ELIGIBLE SUB-
SAHARAN AFRICAN COUNTRIES.
It is the sense of the Congress that, to the extent appropriate, the
United States Government should make every effort to donate to
governments of sub-Saharan African countries (determined to be eligible
under section 4 of this Act) air traffic control equipment that is no
longer in use, including appropriate related reimbursable technical
assistance.
SEC. 17. ADDITIONAL AUTHORITIES AND INCREASED FLEXIBILITY TO PROVIDE
ASSISTANCE UNDER THE DEVELOPMENT FUND FOR AFRICA.
(a) Use of Sustainable Development Assistance To Support Further
Economic Growth.--It is the sense of the Congress that sustained
economic growth in sub-Saharan Africa depends in large measure upon the
development of a receptive environment for trade and investment, and
that to achieve this objective the United States Agency for
International Development should continue to support programs which
help to create this environment. Investments in human resources,
development, and implementation of free market policies, including
policies to liberalize agricultural markets and improve food security,
and the support for the rule of law and democratic governance should
continue to be encouraged and enhanced on a bilateral and regional
basis.
(b) Declarations of Policy.--The Congress makes the following
declarations:
(1) The Development Fund for Africa established under chapter
10 of part I of the Foreign Assistance Act of 1961 (22 U.S.C.
2293 et seq.) has been an effective tool in providing
development assistance to sub-Saharan Africa since 1988.
(2) The Development Fund for Africa will complement the other
provisions of this Act and lay a foundation for increased trade
and investment opportunities between the United States and sub-
Saharan Africa.
(3) Assistance provided through the Development Fund for
Africa will continue to support programs and activities that
promote the long term economic development of sub-Saharan
Africa, such as programs and activities relating to the
following:
(A) Strengthening primary and vocational education
systems, especially the acquisition of middle-level
technical skills for operating modern private
businesses and the introduction of college level
business education, including the study of
international business, finance, and stock exchanges.
(B) Strengthening health care systems.
(C) Strengthening family planning service delivery
systems.
(D) Supporting democratization, good governance and
civil society and conflict resolution efforts.
(E) Increasing food security by promoting the
expansion of agricultural and agriculture-based
industrial production and productivity and increasing
real incomes for poor individuals.
(F) Promoting an enabling environment for private
sector-led growth through sustained economic reform,
privatization programs, and market-led economic
activities.
(G) Promoting decentralization and local
participation in the development process, especially
linking the rural production sectors and the industrial
and market centers throughout Africa.
(H) Increasing the technical and managerial capacity
of sub-Saharan African individuals to manage the
economy of sub-Saharan Africa.
(I) Ensuring sustainable economic growth through
environmental protection.
(4) The African Development Foundation has a unique
congressional mandate to empower the poor to participate fully
in development and to increase opportunities for gainful
employment, poverty alleviation, and more equitable income
distribution in sub-Saharan Africa. The African Development
Foundation has worked successfully to enhance the role of women
as agents of change, strengthen the informal sector with an
emphasis on supporting micro and small sized enterprises,
indigenous technologies, and mobilizing local financing. The
African Development Foundation should develop and implement
strategies for promoting participation in the socioeconomic
development process of grassroots and informal sector groups
such as nongovernmental organizations, cooperatives, artisans,
and traders into the programs and initiatives established under
this Act.
(c) Additional Authorities.--
(1) In general.--Section 496(h) of the Foreign Assistance Act
of 1961 (22 U.S.C. 2293(h)) is amended--
(A) by redesignating paragraph (3) as paragraph (4);
and
(B) by inserting after paragraph (2) the following:
``(3) Democratization and conflict resolution capabilities.--
Assistance under this section may also include program
assistance--
``(A) to promote democratization, good governance,
and strong civil societies in sub-Saharan Africa; and
``(B) to strengthen conflict resolution capabilities
of governmental, intergovernmental, and nongovernmental
entities in sub-Saharan Africa.''.
(2) Conforming amendment.--Section 496(h)(4) of such Act, as
amended by paragraph (1), is further amended by striking
``paragraphs (1) and (2)'' in the first sentence and inserting
``paragraphs (1), (2), and (3)''.
SEC. 18. SUB-SAHARAN AFRICA DEFINED.
For purposes of this Act, the terms ``sub-Saharan Africa'', ``sub-
Saharan African country'', ``country in sub-Saharan Africa'', and
``countries in sub-Saharan Africa'' refer to the following or any
successor political entities:
Republic of Angola (Angola)
Republic of Botswana (Botswana)
Republic of Burundi (Burundi)
Republic of Cape Verde (Cape Verde)
Republic of Chad (Chad)
Democratic Republic of Congo
Republic of the Congo (Congo)
Republic of Djibouti (Djibouti)
State of Eritrea (Eritrea)
Gabonese Republic (Gabon)
Republic of Ghana (Ghana)
Republic of Guinea-Bissau (Guinea-Bissau)
Kingdom of Lesotho (Lesotho)
Republic of Madagascar (Madagascar)
Republic of Mali (Mali)
Republic of Mauritius (Mauritius)
Republic of Namibia (Namibia)
Federal Republic of Nigeria (Nigeria)
Democratic Republic of Sao Tome and Principe (Sao Tome and
Principe)
Republic of Sierra Leone (Sierra Leone)
Somalia
Kingdom of Swaziland (Swaziland)
Republic of Togo (Togo)
Republic of Zimbabwe (Zimbabwe)
Republic of Benin (Benin)
Burkina Faso (Burkina)
Republic of Cameroon (Cameroon)
Central African Republic
Federal Islamic Republic of the Comoros (Comoros)
Republic of Cote d'Ivoire (Cote d'Ivoire)
Republic of Equatorial Guinea (Equatorial Guinea)
Ethiopia
Republic of the Gambia (Gambia)
Republic of Guinea (Guinea)
Republic of Kenya (Kenya)
Republic of Liberia (Liberia)
Republic of Malawi (Malawi)
Islamic Republic of Mauritania (Mauritania)
Republic of Mozambique (Mozambique)
Republic of Niger (Niger)
Republic of Rwanda (Rwanda)
Republic of Senegal (Senegal)
Republic of Seychelles (Seychelles)
Republic of South Africa (South Africa)
Republic of Sudan (Sudan)
United Republic of Tanzania (Tanzania)
Republic of Uganda (Uganda)
Republic of Zambia (Zambia)
Background and Purpose
H.R. 434, the African Growth and Opportunity Act (AGOA), is
the product of years of bipartisan congressional efforts to
promote increased trade and investment between the United
States and sub-Saharan Africa. The bill authorizes a new trade
and investment policy toward the countries of sub-Saharan
Africa and it expresses the willingness of the U.S. to assist
the eligible countries of the region with the reduction of
trade barriers, the creation of an Economic Cooperation Forum,
the promotion of a free trade area and a variety of other trade
and aid related mechanisms.
The bill has very broad support in the Congress and in the
International Relations Committee. Recently, the Administration
has also become supportive of the legislation.
AGOA would set up a series of mechanisms by which the
President would determine the eligibility of a specific sub-
Saharan African nation to participate in the programs and
benefits listed in the bill. The President shall determine
eligibility based on adherence to human rights norms and
demonstrated commitment to economic policy reform, as specified
in Section 4.
The President shall take into account additional factors
when considering AGOA eligibility including an expression of
its commitment to be an eligible country and the extent to
which the country has made substantial progress in the
reduction of tariff levels, the binding of its tariff levels in
the World Trade Organization, and eliminating non-tariff
barriers to trade. These additional factors are also elaborated
on in Section 4.
With the end of the Cold War and the demise of apartheid in
South Africa, sub-Saharan Africa has opened up to the world as
never before. Numerous countries are moving toward democracy,
liberalizing their economies and seeking a better standard of
living for their people. The United States has played a role in
these changes with development assistance and other means. With
AGOA, the Congress directs the Overseas Private Investment
Corporation and the Export-Import Bank to establish special
advisory committees that would help expand exports to and
investment in the countries of the region.
Africa is a continent of 48 nations and over 500 million
people. It supplies many important natural resources to the
United States, from petroleum to uranium to timber. Trade
between the U.S. and Africa is greater than that between the
U.S. and the former Soviet Union and Eastern Europe combined.
Yet, there exists great possibilities for this trade to be
expanded.
Many African nations are only now starting to make the
economic reforms necessary for them to become part of the world
economy. Barriers to foreign investment are coming down and
investor-friendly laws are being written. Two-thirds of African
nations have adopted significant macro-economic policy reforms.
In 1996, thirty-one African nations experienced growth in
real per capita income. Senegal, Ghana, Ethiopia and Cote
d'Ivoire are among the fastest growing economies in the world.
The UnitedStates is the largest recipient (at 18%) of Africa's
exports, but is only the fifth largest exporter to Africa.
The new economic realities of Africa must be reflected in a
new U.S. government approach to the continent. Currently, the
imperatives of development assistance and humanitarian relief
drive U.S. policies toward African nations. While these should
continue to remain priorities, the considerable talent of the
U.S. foreign policy apparatus should also be directed towards
the promotion of stronger trade and investment ties between
Americans and Africans.
Committee Action
Introduction and Consideration of the Bill
H.R. 434, The African Growth and Opportunity Act, was
introduced by Representative Crane on February 2, 1999. It was
referred to the Committee on International Relations, and in
addition to the Committees on Ways and Means and Banking and
Financial Services, for a period to be determined by the
Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned.
The Trade subcommittee of the Committee on Ways and Means
held a hearing and marked up H.R. 434 on February 3, 1999.
On February 9, the Subcommittee on Africa held a hearing on
the bill with private sector witnesses. On February 11, it held
a second hearing with the Assistant Secretary of State for
African Affairs, Susan E. Rice.
Immediately following the hearing, the full Committee held
a mark up of the bill in open session, pursuant to notice.
The Ranking Member, Rep. Gejdenson, offered an amendment
adding internationally recognized worker rights and
international environmental norms to the eligibility
requirements in Section 4 of the bill. He called for a division
of the question. The first part of his amendment, the worker
rights provision, was adopted by voice vote; the second part,
relating to the environment provision, was defeated by a voice
vote.
Rep. Brown offered, and then withdrew, an amendment
providing for a cause of action in a United States District
Court with respect to a workers' rights determination under
subsection (a)(5) of Section 4.
Rep. Sanford offered an amendment to Sections 11 and 12(a)
deleting those provisions and thus any reference to the
Overseas Private Investment Corporation and an OPIC
Infrastructure Fund for Sub-Saharan Africa, or the advisory
committee set up under Section 12(b). The amendment was
defeated on a voice vote.
Rep. Payne offered an amendment inserting a new text for
Section 17 (and renumbering existing Section 17). The new text
authorized various provisions of the Development Fund for
Africa and made other changes to existing law. It was adopted
by voice vote.
Rep. McKinney offered, and then withdrew, an amendment
providing for unconditional debt relief to all the countries of
sub-Saharan Africa.
At the conclusion of the reading of the bill for amendment,
the Committee, by unanimous consent, adopted an amendment in
the nature of a substitute consisting of the bill as amended to
that point.
After concluding the amending process, with a quorum being
present, the Committee ordered the bill favorably reported to
the House by a record vote of 24-8.
Record Votes on Amendments and Motion to Report
Clause (3)(b) of rule XIII of the Rules of the House of
Representatives requires that the results of each record vote
on an amendment or motion to report, together with the names of
those voting for or against, be printed in the committee
report.
Description of amendment, motion, order, or other proposition (Vote
during markup of H.R. 434--February 11, 1999)
Vote No. 1.--On motion to favorably report H.R. 434, as
amended.
Voting yes: Gilman, Bereuter, Burton, Gallegly, Ros-
Lehtinen, Manzullo, Royce, Chabot, Houghton, Campbell,
Tancredo, Gejdenson, Martinez, Payne, Menendez, McKinney,
Hilliard, Wexler, Rothman, Davis, Pomeroy, Meeks, Crowley, and
Hoeffel.
Voting no: Goodling, Ballenger, Burr, Brown, Danner,
Sherman, Delahunt, and Lee. Ayes, 24. Noes, 8.
Other Matters
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, theCommittee reports the
findings and recommendations of the Committee, based on oversight
activities under clause 2(b)(1) of rule X of the Rules of the House of
Representatives, are incorporated in the descriptive portions of this
report.
Committee on Government Reform Findings
Clause 3(c)(4) of rule XIII of the Rules of the House of
Representatives requires each committee report to contain a
summary of the oversight findings and recommendations made by
the Government Reform Committee pursuant to clause (4)(c)(2) of
rule X of those Rules. The Committee on International Relations
has received no such findings or recommendations from the
Committee on Government Reform.
Advisory Committee Statement
Section 12(a) of H.R. 434 as reported provides for the
establishment of an ``advisory committee'' to the Board of the
Overseas Private Investment Corporation to assist the Board in
developing and implementing policies, programs, and financial
instruments with respect to sub-Saharan Africa, and to make
recommendation to the Board on how the Corporation can
facilitate greater support by the United States for trade and
investment with and in sub-Saharan Africa. The advisory
committee would terminate 4 years after the date of enactment.
Section 12(b) provides for the establishment of an advisory
Committee to the Board of Directors of the Export-Import Bank
to assist the Board for similar purposes as the advisory
committee established under section 12(a). The advisory
committee thus established would also terminate after 4 years.
In the view of the Committee, the work of the advisory
committee to the Board of the Overseas Private Investment
Corporation is not and could not be accomplished by one or more
other agencies or by an advisory committee or committees
already in existence, or by enlarging the mandate of an
existing advisory committee or committees. Because the Export-
Import Bank is not within the legislative jurisdiction of the
Committee on International Relations, the Committee takes no
position to the extent that the advisory committee to the Board
of Directors of the Export-Import Bank could be accomplished by
one or more other agencies or by an advisory committee or
committees already in existence, or by enlarging the mandate of
an existing advisory committee or committees.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Constitutional Authority Statement
In compliance with clause 3(d)(1) of rule XIII of the Rules
of the House of Representatives, the Committee cites the
following specific powers granted to the Congress in the
Constitution as authority for enactment of H.R. 434 as reported
by the Committee: Article I, section 8, clause 1 (relating to
providing for the common defense and general welfare of the
United States); Article I, section 8, clause 3 (relating to the
regulation of commerce with foreign nations); and Article I,
section 8, clause 18 (relating to making all laws necessary and
proper for carrying into execution powers vested by the
Constitution in the government of the United States).
Preemption Clarification
Section 423 of the Congressional Budget Act of 1974
requires the report of any committee on a bill or joint
resolution to include a committee statement on the extent to
which the bill or joint resolution is intended to preempt state
or local law. The Committee states that H.R. 434 is not
intended to preempt any state or local law.
New Budget Authority and Tax Expenditures, Congressional Budget Office
Cost Estimate, and Federal Mandates Statements
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives requires each committee report that accompanies
a measure providing new budget authority, new spending
authority, or new credit authority or changing revenues or tax
expenditures to contain a cost estimate, as required by section
308(a)(1) of the Congressional Budget Act of 1974, as amended,
and, when practicable with respect to estimates of new budget
authority, a comparison of the estimated funding level for the
relevant program (or programs) to the appropriate levels under
current law.
Clause 3(d) of rule XIII of the Rules of the House of
Representatives requires committees to include their own cost
estimates in certain committee reports, which include, when
practicable, a comparison of the total estimated funding level
for the relevant program (or programs) with the appropriate
levels under current law.
Clause 3(c)(3) of rule XIII of the Rules of the House of
Representatives requires the report of any committee on a
measure which has been approved by the Committee to include a
cost estimate prepared by the Director of the Congressional
Budget Office, pursuant to section 403 of the Congressional
Budget Act of 1974, if the cost estimate is timely submitted.
Section 423 of the Congressional Budget Act requires the
report of any committee on a bill or joint resolution that
includes any Federal mandate to include specific information
about such mandates. The Committee states that H.R. 434 does
not include any Federal mandate.
The Committee expects to adopt a cost estimate of the
Congressional Budget Office as its own submission of any new
required information related to H.R. 434 on new budget
authority, new spending authority, new credit authority, or an
increase or decrease in the national debt. It also expects to
adopt the estimate of Federal mandates prepared by the Director
of the Congressional Budget Office pursuant to section 423 of
the Unfunded Mandates Reform Act. No estimate and report was
received from the Congressional Budget Office.
Section-by-Section Analysis
Section 1. Short title
This section states that this Act may be cited as the
``African Growth and Opportunity Act''.
Section 2. Findings
The Congress finds that it is in the mutual economic
interest of the United States and sub-Saharan Africa to promote
sustainable economic growth and development in sub-Saharan
Africa. The U.S. seeks to assist these sub-Saharan African
countries to achieve economic self-reliance by (1)
strengthening the private sector, especially women-owned
businesses; (2) encouraging increased trade and investment
between the United States and sub-Saharan Africa; (3) reducing
trade barriers; (4) expanding assistance to regional
integration efforts; (5) negotiating free trade areas; (6)
establishing a Trade and Investment Partnership and an Economic
Cooperation Forum between the U.S. and sub-Saharan Africa; (7)
focusing on those countries committed to accountable
government, reform and the eradication of poverty; (8)
establishing a sub-Saharan African Economic Cooperation Forum;
and (9) continuing to support development assistance for those
countries attempting to build civil societies.
Section 3. Statement of policy
This section reiterates congressional support for economic
self-reliance in sub-Saharan African nations, particularly
those countries committed to economic and political reforms;
market incentives and private sector growth; eradication of
poverty and the importance of women to economic growth and
development.
Section 4. Eligibility requirements
This section describes the mechanism by which sub-Saharan
African nations become eligible for programs and benefits of
AGOA. The President shall determine eligibility based on
adherence to human rights norms and demonstrated commitment to
economic policy reform. The President shall ``take into
account'' other factors when making his determination.
Human Rights.--As described in subsection (a), a country
that the President determines does not engage in gross
violations of internationally recognized human rights shall be
eligible.
Economic Reform.--To be eligible under the AGOA, a country
must also make continual progress toward establishing a market
economy, as evidenced by the establishment and enforcement of
policies: (1) promoting free movement of goods between the U.S.
and sub-Saharan Africa; (2) promoting the expansion of the
production base and the transformation of commodities for
exports through joint ventures between African and foreign
investors; (3) protecting intellectual property rights and
improving product testing, labeling and certification; (4)
protecting property rights and against expropriation; (5)
reducing import and corporate taxes, controlling government
consumption and participating in bilateral investment treaties;
(6) providing national treatment for foreign investors and a
policy environment conducive to domestic and foreign
investment; (7) supporting the growth of regional markets; (8)
supporting an end to corruption and government interference in
the marketplace; (9) supporting a new generation of African
entrepreneurs; (10) encouraging divestiture of government-
controlled economic enterprises; (11) removing investment
restrictions; and (12) observing the rule of law.
Additional Factors.--The President shall take into account
additional factors when considering AGOA eligibility including
an expression of its commitment to be an eligible country and
the extent to which the country has made substantial progress
in the reduction of tariff levels, the binding of its tariff
levels in the World Trade Organization, and eliminating non-
tariff barriers to trade. In addition, the President should
also take into account whether the country is already a member
of the World Trade Organization or is pursuing membership in
that body; the extent to which the country is in compliance
with its obligations to the International Monetary Fund; the
extent to which the country protects internationally recognized
worker rights, including the right to organize and bargain
collectively, a prohibition on the use of any form of forced or
compulsory labor, a minimum age for the employment of children,
and acceptable conditions of work with respect to minimum
wages, hours of work, and occupational safety and health; the
extent to which the country has a commitment to reducing
poverty, providing basic education for its citizens, providing
access to market and credit facilities for small farmers and
improving economic opportunities for women as entrepreneurs;
and the extent to which a country engages in activities that
undermine the national security or the foreign policy interests
of the United States.
Continuing Compliance.--Subsection (c) requires the
President to continually monitor sub-Saharan African nations'
compliance with subsection (a) and include quantitative
evaluations in the annual report required by section 15.
Subsection (c) further states that nations not making continual
progress toward the requirements listed in subsection (a) shall
not be eligible under AGOA.
Section 5. United States-Sub-Saharan Africa trade and economic
cooperation forum
This section directs the President to convene, on an annual
basis, meetings of high-level officials between the government
of the United States and those nations in sub-Saharan Africa
that meet the requirements of AGOA. The first of these meetings
(the Forum) shall take place not less than twelve months after
the passage of AGOA. In creating the Forum, the President is
required to meet the following requirements: (1) direct certain
U.S. cabinet officials to meet with their counterparts of
eligible African nations at the first Forum and include the
Secretary-General of the Organization of African Unity to
discuss trade and investment issues; (2) encourage, in
consultation with Congress, participation of the private sector
and American and African NGOs in the Forum; and (3) meet with
the heads of state of eligible African nations not less than
once every two years beginning in the first year after the
passage of AGOA. The section further provides for the
dissemination of information about the Forum by the United
States Information Agency. Funds necessary to carry out this
section are authorized.
Section 6. United States-Sub-Saharan Africa free trade area
Not in HIRC jurisdiction.
Section 7. Eliminating trade barriers and encouraging exports
Not in HIRC jurisdiction.
Section 8. Generalized system of preferences
Not in HIRC jurisdiction.
Section 9. International financial institutions and debt reduction
Not in HIRC jurisdiction.
Section 10. Executive branch initiatives
This section expresses the sense of the Congress that the
Administration's ``Partnership for Growth and Opportunity in
Africa'' initiative is a companion to the policy goals set
forth in this Act. It also directs the President to target
technical assistance for the purpose of: promoting
relationships between U.S. firms and firms in sub-Saharan
Africa; liberalizing trade; bringing legal regimes into
compliance with the standards of the World Trading
Organization; making financial and fiscal reforms; promoting
greater agribusiness linkages; addressing agricultural policy
issues including market liberalization, agricultural export
development, and agribusiness investment; increasing the number
of reverse trade missions; increasing trade in services; and
encouraging greater participation by sub-Saharan countries in
future negotiations of the World Trade Organization.
Section 11. Sub-Saharan Africa infrastructure fund
Subsection (a) expresses the sense of Congress that OPIC,
within one year of the date of enactment of this Act, shall
launch two or more equity funds in support of projects in sub-
Saharan Africa. Subsection (b) describes the structure and
types of these funds, including provisions for a $150 million
equity fund and a $500 million infrastructure project fund. The
Corporation is directed to ensure that both funds are used to
provide support in particular to women entrepreneurs and to
maximize employment opportunities for poor individuals.
Section 12. Overseas private investment corporation and export-import
bank initiatives
Section 12(a) amends Section 233 of the Foreign Assistance
Act of 1961 to direct the Board of the Overseas Private
Investment Corporation to increase its programs and financial
commitments in sub-Saharan Africa including through the
establishment of an advisory committee assisting the Board in
the development of policies and programs toward sub-Saharan
Africa. The advisory committee shall terminate after four
years. Within six months of the date of enactment of this Act,
the OPIC Board shall submit to Congress a report on its
implementation of this section and the findings and
recommendations of the advisory board. Annually thereafter for
the next four years, in its annual report to Congress, OPIC
shall provide updates about its implementation and
recommendations of the advisory committee.
Pursuant to Section 12(b) the Export-Import Bank is also
directed to increase its loan, guarantee and insurance programs
to sub-Saharan Africa, consistent with its other credit
standards, and to establish an advisory committee on sub-
Saharan Africa with the same mandate life span and periodic
reporting requirements under the previous subsection.
Section 13. Assistant United States trade representative for Sub-
Saharan Africa
Not in HIRC jurisdiction.
Section 14. Expansion of the United States and foreign commercial
service in Sub-Saharan Africa
This section expresses the sense of Congress that the
Foreign Commercial Service of the Department of Commerce should
expand its presence in sub-Saharan Africa by increasing the
number of posts and personnel it allocates to that region. Not
more than 120 days after the enactment of the bill, it directs
the Secretary of Commerce to report on the feasibility of
increasing the presence of the Foreign Commercial Service in
Africa.
Section 15. Reporting requirement
This section requires the President to submit to Congress,
within one year of the enactment of AGOA, and again not later
than the end of each of the next four years, a report on the
implementation of AGOA.
The Committee expects that these reports will detail the
reasons why each specific country was deemed eligible or
ineligible by the President for programs and benefits under
AGOA. In particular, the extent to which each country has made
progress on the criteria listed in subsection 4(a) should be
included in the reports.
Section 16. Donation of air traffic control equipment to eligible Sub-
Saharan African countries
Sense of Congress that unused air traffic control equipment
should be donated to African governments.
Section 17. Additional authorities and increased flexibility to provide
assistance under the development fund for Africa
Subsections (a) and (b) make a number of statements of
policy regarding the Development Fund for Africa and the
African Development Foundation and their roles in promoting
stronger economic links between the United States and sub-
Saharan African nations. In particular, it is noted that
sustainable development, as advanced by the U.S. Agency for
International Development, is an essential component in any
effort to promote trade and investment in Africa. The bill
encourages USAID to continue to support programs that advance
sustainable development, including investments in human
resources, development and implementation of free market
policies, including policies to liberalize agricultural markets
and improve food security, and the support for the rule of law
and democratic governance.
Other activities that enhance trade and investment
possibilities include: strengthening primary and vocational
education systems, strengthening health care systems,
strengthening family planning service delivery systems,
supporting democratization, good governance and civil society
and conflict resolution efforts, increasing food security,
promoting an enabling environment for private sector-led
growth, promoting decentralization and local participation in
the development process, increasing technical and managerial
capacity of Africans, and ensuring sustainable economic growth
through environmental protection.
Subsection (c) amends the Foreign Assistance Act of 1961,
as amended, to provide increased flexibility to the Agency for
International Development in providing program assistance
promoting democratization, good government and strong civil
societies and strengthening conflict resolution capabilities of
governmental, intergovernmental and non-governmental entities
in sub-Saharan Africa.
Subsection (d) amends the Foreign Assistance Act of 1961 to
provide additional authority to the President to waive
provisions of law that earmark funds provided under the
Development Fund for Africa, Chapter 10 of Part 1 of the
Foreign Assistance Act, as amended if the President determines
that the waiver of such law would provide improved conditions
for the people of Africa. The waiver does not apply to
provisions of law that earmark funds for child survival
activities, as enumerated in the amendment.
Section 18. Sub-Saharan Africa defined
The specification of Somalia shall not be construed to
prevent the extension of provisions under this act to any parts
of Somalia that might benefit from and qualify for such
benefits, including, but not limited to, the area commonly
known as Somaliland, even if other parts of Somalia would not
be held to qualify for such benefits.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(g) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE V OF THE TRADE ACT OF 1974
TITLE V--GENERALIZED SYSTEM OF PREFERENCES
* * * * * * *
SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.
(a) Eligible Articles.--
(1) Designation.--
(A) * * *
* * * * * * *
(C) Eligible countries in sub-saharan
africa.--The President may provide duty-free
treatment for any article set forth in
paragraph (1) of subsection (b) that is the
growth, product, or manufacture of an eligible
country in sub-Saharan Africa that is a
beneficiary developing country, if, after
receiving the advice of the International Trade
Commission in accordance with subsection (e),
the President determines that such article is
not import-sensitive in the context of imports
from eligible countries in sub-Saharan Africa.
This subparagraph shall not affect the
designation of eligible articles under
subparagraph (B).
[(C)] (D) Three-year rule.--If, after
receiving the advice of the International Trade
Commission under subsection (e), an article has
been formally considered for designation as an
eligible article under this title and denied
such designation, such article may not be
reconsidered for such designation for a period
of 3 years after such denial.
(2) Rule of origin.--
(A) * * *
* * * * * * *
(C) Eligible countries in sub-saharan
africa.--For purposes of determining the
percentage referred to in subparagraph (A) in
the case of an article of an eligible country
in sub-Saharan Africa that is a beneficiary
developing country--
(i) if the cost or value of materials
produced in the customs territory of
the United States is included with
respect to that article, an amount not
to exceed 15 percent of the appraised
value of the article at the time it is
entered that is attributed to such
United States cost or value may be
applied toward determining the
percentage referred to in subparagraph
(A); and
(ii) the cost or value of the
materials included with respect to that
article that are produced in any
beneficiary developing country that is
an eligible country in sub-Saharan
Africa shall be applied in determining
such percentage.
* * * * * * *
(c) Withdrawal, Suspension, or Limitation of Duty-Free
Treatment; Competitive Need Limitation.--
(1) * * *
(2) Competitive need limitation.--
(A) * * *
* * * * * * *
[(D) Least-developed beneficiary developing
countries.--Subparagraph (A) shall not apply to
any least-developed beneficiary developing
country.]
(D) Least-developed beneficiary developing
countries and eligible countries in sub-saharan
africa.--Subparagraph (A) shall not apply to
any least-developed beneficiary developing
country or any eligible country in sub-Saharan
Africa.
* * * * * * *
[SEC. 505. DATE OF TERMINATION.
[No duty-free treatment provided under this title shall
remain in effect after June 30, 1999.]
SEC. 505. DATE OF TERMINATION.
(a) Countries in Sub-Saharan Africa.--No duty-free treatment
provided under this title shall remain in effect after June 30,
2009, with respect to beneficiary developing countries that are
eligible countries in sub-Saharan Africa.
(b) Other Countries.--No duty-free treatment provided under
this title shall remain in effect after June 30, 1999, with
respect to beneficiary developing countries other than those
provided for in subsection (a).
* * * * * * *
SEC. 507. DEFINITIONS.
For purposes of this title:
(1) * * *
* * * * * * *
(6) Eligible country in sub-saharan africa.--The
terms ``eligible country in sub-Saharan Africa'' and
``eligible countries in sub-Saharan Africa'' mean a
country or countries that the President has determined
to be eligible under section 4 of the African Growth
and Opportunity Act.
* * * * * * *
----------
FOREIGN ASSISTANCE ACT OF 1961
PART I
* * * * * * *
TITLE IV--OVERSEAS PRIVATE INVESTMENT CORPORATION
* * * * * * *
Sec. 233. Organization and Management.--(a) * * *
* * * * * * *
(e) Advisory Committee.--The Board shall take prompt measures
to increase the loan, guarantee, and insurance programs, and
financial commitments, of the Corporation in sub-Saharan
Africa, including through the use of an advisory committee to
assist the Board in developing and implementing policies,
programs, and financial instruments with respect to sub-Saharan
Africa. In addition, the advisory committee shall make
recommendations to the Board on how the Corporation can
facilitate greater support by the United States for trade and
investment with and in sub-Saharan Africa. The advisory
committee shall terminate 4 years after the date of the
enactment of this subsection.
* * * * * * *
CHAPTER 10--DEVELOPMENT FUND FOR AFRICA
Sec. 496. Long-Term Development Assistance for Sub-Saharan
Africa.--(a) * * *
* * * * * * *
(h) Types of Assistance.--
(1) * * *
* * * * * * *
(3) Democratization and conflict resolution
capabilities.--Assistance under this section may also
include program assistance--
(A) to promote democratization, good
governance, and strong civil societies in sub-
Saharan Africa; and
(B) to strengthen conflict resolution
capabilities of governmental,
intergovernmental, and nongovernmental entities
in sub-Saharan Africa.
[(3)] (4) Other assistance.--Funds made available to
carry out this section shall be used almost exclusively
for assistance in accordance with [paragraphs (1) and
(2)] paragraphs (1), (2), and (3). Assistance
consistent with the purpose of subsection (c) may also
be furnished under this section to carry out the
provisions of sections 103 through 106 of this Act.
* * * * * * *
----------
SECTION 2 OF THE EXPORT-IMPORT BANK ACT OF 1945
Sec. 2. (a) * * *
(b)(1) * * *
* * * * * * *
(13)(A) The Board of Directors of the Bank shall take prompt
measures, consistent with the credit standards otherwise
required by law, to promote the expansion of the Bank's
financial commitments in sub-Saharan Africa under the loan,
guarantee, and insurance programs of the Bank.
(B)(i) The Board of Directors shall establish and use an
advisory committee to advise the Board of Directors on the
development and implementation of policies and programs
designed to support the expansion described in subparagraph
(A).
(ii) The advisory committee shall make recommendations to the
Board of Directors on how the Bank can facilitate greater
support by United States commercial banks for trade with sub-
Saharan Africa.
(iii) The advisory committee shall terminate 4 years after
the date of the enactment of this subparagraph.
* * * * * * *
DISSENTING VIEWS
We, like our fellow Members of Congress, desire to improve
the economic conditions of the people in Sub-Saharan Africa. We
applaud current efforts and commend this Congress for its
attention to the region. Unfortunately, we believe the
provisions of the legislation recently passed by the
International Relations Committee, H.R. 434, the African Growth
& Opportunity Act, will not meet its intended goals. While the
sections of the bill we find objectionable were not referred to
the International Relations Committee for its consideration, we
do not believe the Committee could or should be silent on those
provisions we question. We could not in good conscience support
the referred provisions and ignore the balance of the
legislation. For this reason, we were forced to oppose this
legislation in full Committee markup.
The proponents of this legislation base their support of
the bill on a number of flawed principles. Our primary
objection to the legislation is centered on the likely massive
increase in customs fraud, including a huge increase in the
transshipment of Asian textile and apparel products, we believe
will occur upon the enactment of this legislation.
Additionally, this bill has other serious flaws: it allows
Asian manufacturers to legally exploit an ineffective rule-of-
origin to gain the benefits of the bill by doing very little
manufacturing in the bill's target region; it opens up the U.S.
market without providing any reciprocal benefits to U.S.
workers; it relies on a U.S. International Trade Commission
(ITC) report that is seriously flawed; and it violates the
commitments made by the Clinton Administration to maintain the
balance of concessions whereby quota phaseouts and tariff
reductions will follow the WTO agreement during the Uruguay
Round GATT talks.
As currently drafted, H.R. 434 creates a new incentive to
transship and commit customs fraud in the form of dramatic
savings from duty reductions for Asian textile and apparel
manufacturers. For example, by transshipping garments from
production facilities in Asia or doing only minor assembly work
in Africa, manufacturers will reap huge benefits at the expense
of American textile workers. Asian textile and apparel
manufacturers pay more than $4 billion each year in duties to
the United States Treasury. If these manufacturers can save
billions by transshipping goods through the weak enforcement
mechanisms provided in this bill, why won't they?
This legislation also either fails to recognize, or simply
ignores, the transshipping history of Asian textile and apparel
manufacturers. These manufacturers have been illegally
transshipping goods into the United States for more than 15
years. In fact, the United States Customs Service has estimated
that transshipments from Asia grew from $500 million in 1985 to
$2 billion in 1995. This year, that number could actually be as
high as $4 billion. According to U.S. Customs, Asian
manufacturers have used more than 30 countries, including eight
Sub-Saharan countries, as major transshipment routes. This
legislation simply provides these manufacturers with a larger
playing field.
In addition, there is the potential for a flood of new
transshipments from Asia under this legislation. At this time,
only those manufacturers who fill quota have an incentive to
transship. This applies mainly to manufacturers in China. Under
this bill, which lowers duties from approximately 18% to zero,
every Asian manufacturer which ships products to the United
States will have an incentive to transship through Africa. In
the textile and apparel sector, where profit margins are small,
a duty savings of 18% represents an almost irresistible
incentive to game the legal system.
The enforcement mechanisms in H.R. 434 are flawed as well.
The visa system that many supporters point to as the silver
bullet of transshipment prevention will not stop this illegal
activity. Every major Asian exporter currently operates under a
visa system and transshipments still run into the billions of
dollars each year. Visas have been used in Hong Kong since
1976, but it is important toremember that Hong Kong is the
largest transshipment port in the world. In 1997 alone, Hong Kong
Customs found that 422 apparel factors of the 2,200 inspected, all of
which used the visa system, were found to be involved in transshipping.
The visa system was never designed to stop transshipments--it was
designed to allow exporters to know exactly how much product they had
shipped in order to prevent a violation of quota restrictions.
The removal of trade benefits for two years for companies
found to be in violation of the transshipping provisions
provided in the bill is not prohibitive. One of the most widely
used customs scams among transshipping exporters is for the
company in question to simply change its name. Because US
Customs lacks a permanent presence in many countries, and
because its jurisdiction is severely limited by laws in foreign
countries, it is almost impossible for US Customs to adequately
enforce regulations. The great detail required to successfully
prosecute a transshipping case against an overseas manufacturer
severely limits the number of cases which can be successfully
initiated.
The overwhelming odds against US Customs requires US
Customs requires African customs agencies to be the primary
enforcers of our law, which is simply unfair. The customs
agencies of these countries are poorly staffed, underequipped,
underpaid, and under trained. Corruption in the carrying out of
their duties, in a duty- and quota-free area three times the
size of the United States, is a legitimate concern. In May
1998, Acting USAID Administrator for Africa Carol Peasely
testified before the Africa Subcommittee that ``Systemic
corruption in Africa typically occurs in the management of
public companies, in public markets, in fiscal administration,
in customs and in the justice system.'' She also noted that
``the problem is often fostered and encouraged by non-Africans
seeking special status or privilege.'' HR 434 contains no
requirements that African customs agencies be corruption-free,
and there are no effective remedies against the country
involved if systems fail and transshipments are allowed to
continue.
The bill's rule-of-origin stipulates that only 35% of the
value of a garment must be added in a Sub-Saharan country for
origin to be claimed. Under these rules the products
components, from yarn to fabric to zippers and buttons, may be
sourced from anywhere. It is almost guaranteed that these
components will be sourced in Asia, where there is substantial
over-capacity.
This bill also represents a unilateral trade concession the
likes of which this country has never seen. The supporters of
the bill, with their votes in favor of passage, are doing
nothing less than eliminating tariffs on over 2,000 United
States textile and apparel products, while not requiring the
beneficiary countries of the Sub-Saharan region to lower even a
single tariff line by a single percentage point. South Africa
will still be able to block United States exports with tariffs
as high as 30%; Nigeria will be able to continue its ban on all
textile imports from the United States; and the United States
has no recourse under this bill if a beneficiary country
decides to raise tariffs or even ban United States products
altogether.
The import sensitive nature of the textile and apparel
sector in this country has long been acknowledged in our trade
policy. That sensitivity is the very reason textiles and
apparel were originally excluded from the Generalized System of
Preferences program. This legislation not only strips textiles
and apparel of their protected status, but also removes the
Competitive Need Limitation which all other countries must
adhere to and which prevents imports of GSP products from
surging into the United States market. It also prevents the
United States from instituting quotas in the event of import
surges, which every country in the world has under the rules of
the World Trade Organization.
This bill relies on an International Trade Commission (ITC)
study that is itself seriously flawed. The ITC report based its
findings solely on an analysis of the competitive strengths of
the textile and apparel sectors of the 48 beneficiary countries
of the Sub-Saharan region. Despite the fact that six domestic
industry organizations cited increased transshipment and
customs fraud--not legal imports from Africa--as the primary
threat from the bill, the ITC spent little of the report's 125
pages reviewing the transshipment problem. In the report, the
ITC cited three measures: a visa system, jump teams and quota
chargebacks as potential weapons against transshipments. The
Commission failed, however, to evaluate how those measures
might be employed if free trade access was granted to Sub-
Saharan Africa or whether they have been successful in
combating the transshipment problem. Despite the ITC's mandate
to measure the potential impact of the legislation on the
domestic industry, the ITC report failed to consider even
whether the prospect of reducing duties from around 18% to zero
would act as an additional incentive for increased
transshipments and fraud from non-beneficiary countries.
Finally, and perhaps most importantly, HR 434 violates
commitments made by the Clinton Administration to the domestic
textile and apparel industry. In a letter to Congress following
the Uruguay Round trade talks, President Clinton promised the
textile and apparel industry that it would receive ``gradual
and even staging of tariff reductions and quota integration.''
The President elaborated, saying ``tariff cuts should be staged
over a period at least as long as the phaseout of the Multi-
Fiber Agreement'' (MFA) and that the Administration did not
intend ``to integrate sensitive products until the end of the
phaseout period.'' In addition, President Clinton stated that
he would insist ``that our willingness to phaseout the MFA be
linked directly to the achievement of effective market access
in individual countries by the removal of non-tariff barriers
and the lowering of tariffs.'' This bill guts the commitments
and promises President Clinton made to the hardworking textile
and apparel workers of this country. Tariffs will go to zero
immediately, quotas will be removed, and there is not a single
shred of market access achieved for United States products.
This bill, in effect, permits the de facto removal of tariff
and quota controls on Asian textile and apparel manufacturers.
If HR 434 is signed into law as currently written, the
livelihoods of thousands of fiber, textile and apparel workers
in this country will be threatened. We believe it will
jeopardize existing trade agreements with Mexico and Canada and
threaten special arrangements made with the nations of the
Caribbean Basin Initiative. It will impose substantial new
burdens on the United States Customs Service. It will cause
substantial loss of revenue to the United States Treasury. And,
contrary to the goals of the supporters of the bill and every
Member of Congress, it will not benefit the people of Africa as
intended.
Richard Burr.
Brad Sherman.
Cass Ballenger.
Bill Goodling.