[Senate Hearing 112-604]
[From the U.S. Government Publishing Office]
S. Hrg. 112-604
ECONOMIC STATECRAFT: EMBRACING AFRICA'S MARKET POTENTIAL
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HEARING
BEFORE THE
SUBCOMMITTEE ON AFRICAN AFFAIRS
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
JUNE 28, 2012
__________
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COMMITTEE ON FOREIGN RELATIONS
JOHN F. KERRY, Massachusetts, Chairman
BARBARA BOXER, California RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania MARCO RUBIO, Florida
JIM WEBB, Virginia JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico MIKE LEE, Utah
William C. Danvers, Staff Director
Kenneth A. Myers, Jr., Republican Staff Director
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SUBCOMMITTEE ON AFRICAN AFFAIRS
CHRISTOPHER A. COONS, Delaware, Chairman
BENJAMIN L. CARDIN, Maryland JOHNNY ISAKSON, Georgia
JIM WEBB, Virginia JAMES M. INHOFE, Oklahoma
RICHARD J. DURBIN, Illinois MIKE LEE, Utah
TOM UDALL, New Mexico BOB CORKER, Tennessee
(ii)
C O N T E N T S
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Page
Carson, Hon. Johnnie, Assistant Secretary for African Affairs,
U.S. Department of State, Washington, DC....................... 4
Prepared statement........................................... 7
Coons, Hon. Christopher A., U.S. Senator from Delaware, opening
statement...................................................... 1
Gast, Hon. Earl, Assistant Administrator for Africa, U.S. Agency
for International Development, Washington, DC.................. 10
Prepared statement........................................... 11
Isakson, Hon. Johnny, U.S. Senator from Georgia, opening
statement...................................................... 3
Liser, Florizelle, Assistant U.S. Trade Representative for
Africa, Office of the U.S. Trade Representative, Washington, DC 15
Prepared statement........................................... 17
(iii)
ECONOMIC STATECRAFT: EMBRACING AFRICA'S MARKET POTENTIAL
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THURSDAY, JUNE 28, 2012
U.S. Senate,
Subcommittee on African Affairs,
Committee on Foreign Relations,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:35 p.m., in
room SD-419, Dirksen Senate Office Building, Hon. Christopher
A. Coons (chairman of the subcommittee) presiding.
Present: Senators Coons, Udall, and Isakson.
OPENING STATEMENT OF HON. CHRISTOPHER A. COONS,
U.S. SENATOR FROM DELAWARE
Senator Coons. I am pleased to convene today's hearing of
the African Affairs Subcommittee, entitled ``Economic
Statecraft: Embracing Africa's Market Potential.''
I would like to welcome my friend and partner on the
subcommittee, Senator Johnny Isakson of Georgia, and thank our
distinguished panel of three witnesses for sharing their
expertise with us.
We will hear today from Assistant Secretary Carson, USAID
Assistant Administrator Gast, and Assistant USTR for Africa,
Florie Liser. We will also convene a second hearing on this
topic in July, and I very much look forward to testimony from
the U.S. Department of Commerce at that hearing, as well as
other Government agencies critical to our developing trade
relationship with Africa and the private sector.
Today, we will explore Africa's vast economic potential,
both for U.S. businesses and investors and as a means of
sustainable development, as well as steps our Government could
take to increase bilateral investment and trade. Over the past
decade, Africa has been home to 6 of the 10 fastest-growing
economies in the world, which is projected soon to reach 7. And
the first of several visuals here shows those rapidly growing
economies.
According to the IMF, the region is on track to grow by 6
percent this year, roughly the same as Asia, and is on the
brink of an economic takeoff. Trade between Africa and the rest
of the world has tripled in the last 10 years, with an increase
in exports of more than 200 percent and an increase in imports
of 250 percent, as shown in this graphic.
Increased trade between the United States and Africa is
mutually beneficial. It fosters economic growth in Africa and
creates jobs here at home. That is why Senators Durbin,
Isakson, Boozman, and I have introduced S. 2215, the Increasing
American Jobs Through Greater Exports to Africa Act, which
requires the administration to develop a strategy for
increasing U.S. exports by 200 percent in the next 10 years.
There is more that could be done to fully capitalize in
Africa's vast economic potential and, in my view, to compete
more aggressively with countries such as China, which has
recently surpassed the United States as Africa's largest
trading partner.
Today, the United States foreign assistance budget for
Africa focuses on responding to health, food security, and
humanitarian crises. But as we look to the future, it is
imperative to better align our investments with the reality of
modern-day Africa, focusing more on economic statecraft and
transitioning from aid to trade.
When it comes to the private sector, Africa is the
destination of a mere 1 percent of a total of the United States
foreign direct investment, and more than half of United States
foreign direct investment in Africa is concentrated in
extractive industries. This lack of diversification is clear in
our trade relationships as well, with 82 percent of U.S.
imports from Africa being concentrated in oil.
Further diversification of our trade and investment
relationships is important as we consider the reauthorization
of the African Growth and Opportunity Act, hopefully well in
advance of the expiration of the full act in 2015.
As we all know, another critically important aspect of AGOA
is the Third-Country Fabric Provision, set to expire in
September. This provision, which maintains AGOA eligibility for
apparel regardless of the fabric's country of origin, has been
successful and has helped American companies reduce costs and
diversify supply chains and has created tens of thousands of
jobs, predominantly for women, in Lesotho, Swaziland, Kenya,
Mauritius, and several other countries across the continent.
Given the lead time required for orders, our delay in
reauthorizing this provision has reduced new apparel orders by
more than 30 percent. Senator Isakson and I have been working
tirelessly with our colleagues in the Senate and House to
ensure this passes as soon as possible, and we will not rest
until this Third-Country Fabric Provision is renewed.
I recently had the opportunity to travel to East Africa,
where I experienced the impact of AGOA firsthand in Kenya. I
visited a locally owned company called Ecosandals, which makes
footwear from recycled materials in Mathare Valley, one of the
poorest parts of Nairobi. Ecosandals and companies like it are
able to export their products to customers in the United States
because of the opportunities AGOA provides.
At the same time, we have to work in partnership with
African countries to expand United States trade to Africa and
must continue to urge African countries to strengthen
institutions and lift barriers of trade, such as poor
infrastructure and transportation, as well as occasional bans
on products such as poultry, which both Senator Isakson and I
are well familiar with and quite fond of.
Lifting tariff and nontariff barriers will not only benefit
Africa's global trading partners, but it will also increase
intraregional trade, which accounts for only 11 percent of
total trade on the continent and must be improved.
In conclusion, I welcome the administration's recently
released U.S. Strategy Toward Sub-Saharan Africa. It defines a
key goal of U.S. policy, the acceleration of economic growth,
including through trade and investment; outlines goals,
including promoting and enabling environment for trade and
investment; improving economic governance; promoting regional
integration; expanding African capacity to access global
markets; and encouraging United States companies to trade with
and invest in Africa. This next visual is those highlighted
points.
As we look beyond words toward implementation of this
strategy, I look forward to hearing from our witnesses about
how these goals can be accomplished. Specifically, how
coordination can be improved among the 10 key U.S. Government
agencies highlighted here, each with a role in improving and
developing our relations with Africa in economics and trade.
I also hope our strategy aims to eliminate policy
inconsistencies, such as plans by the Department of Commerce to
reduce the Foreign Commercial Service presence on the continent
just as it is poised for significant growth.
I want to thank our panel for appearing today and now turn
to Senator Isakson for his opening statement.
OPENING STATEMENT OF HON. JOHNNY ISAKSON,
U.S. SENATOR FROM GEORGIA
Senator Isakson. Well, thank you, Chairman Coons.
And I welcome Secretary Carson, Mr. Gast, Ms. Liser. Thank
you for being here today.
This is a very appropriate topic for us to talk about.
Trade with Africa is important for Africa, but it is equally
important for the United States of America. I think our country
has done a tremendous job in opening the door to develop more
opportunity in terms of trade and has focused on things like
Millennium Challenge compacts to really open up the opportunity
for more investment and more interaction between our country
and the countries in Africa.
As I might note, with some of the changes that it has
fostered, there has been less corruption, more democratic
institutions, and more discipline in terms of dealing with them
in trade issues. I was very proud to see that the Millennium
Challenge extended their compact with Malawi here recently
because of the change in leadership there. It put back some of
the institutions that were so important to have a movement
toward free and fair trade.
My concern about Africa and trade is the following: I think
the continent has a tremendous opportunity and, with its
discovery of petroleum and natural gas, has the money coming in
to do remarkable things. But it also could end up going the way
of the Middle East and suffer from the Dutch disease, where it
has a singular source of great wealth, being a natural
resource, but doesn't invest it in its people, in businesses,
and in employment and, therefore, becomes a prisoner of its own
wealth.
Africa, I hope, will go the other direction, and I think
the United States, more so than any other country on the face
of this earth, has the opportunity to be their partner in
becoming a diversified economic continent for the people of
Africa.
So, Mr. Chairman, I commend you on calling this forward
today. I commend Secretary Carson on his many initiatives and
his efforts that he has made, what USAID has done to develop
relationships on the continent of Africa, and the Millennium
Challenge Corporation for the work that they are doing. Those
are the steps that we need to do to accomplish an expansion of
trade and economic development between our two countries.
And I will look forward to the testimony of our witnesses.
Senator Coons. Thank you, Senator.
We now turn to our panel. If you would, Assistant Secretary
Carson.
STATEMENT OF HON. JOHNNIE CARSON, ASSISTANT SECRETARY FOR
AFRICAN AFFAIRS, U.S. DEPARTMENT OF STATE, WASHINGTON, DC
Ambassador Carson. Mr. Chairman, thank you very, very much.
Ranking Member Isakson, thank you as well for your strong
commitment and support that you show toward our policy toward
Africa and also for this hearing.
Thank you for providing me with an opportunity to address
the committee on what I feel is an important and timely topic.
The United States Government is committed to expanding
trade and investment in sub-Saharan Africa, and the numbers
show our commitment. It is my firm belief that Africa
represents the next global economic frontier. Sub-Saharan
Africa continues to weather the global economic crisis more
successfully than other regions.
In addition to hosting 6 of the 10 fastest-growing
economies in the world, a recent McKinsey study documented that
Africa offers the highest rate of return on foreign investment
of any developing region and has for some years. Consumer
spending continues to rise, and 43 percent of Africans
currently have discretionary income or could be considered
middle-class consumers.
Africa's economic growth story goes deeper than just a boom
in the exports of natural resources. Over the past decade,
Africa's growth was widespread across sectors including
wholesale and retail trade, transportation, telecommunications,
and including manufacturing. Foreign direct investment, or FDI,
in Africa has also seen tremendous growth. FDI projects into
Africa have more than doubled from 339 in 2003 to 857 in 2011.
Intra-African investment has grown sharply, increasing from
27 projects in 2003 to 145 in 2011. And natural resources will
continue to generate significant revenues as well.
At current prices, the total value of American resource
production could grow to $540 billion by 2020. In short, Africa
is a trade and investment destination that cannot be ignored,
and we are determined to do more in this area.
The second pillar of President Obama's recently announced
U.S. Strategy Toward Sub-Saharan Africa directs the
administration to spur economic growth, trade, and investment
in sub-Saharan Africa. This new approach recognizes that it is
in the interests of both United States and our African partners
to improve the region's trade competitiveness, to encourage the
diversification of exports beyond natural resources, and to
ensure sustained economic growth, which benefits all sectors of
society.
This new strategy elevates economic growth, trade, and
investment issues by calling for increased U.S. focus on
promoting and enabling environment for trade and investment,
improving economic governance, promoting regional integration,
expanding African capacity to effectively access and benefit
global markets, and also to encourage U.S. companies to trade
with, and invest in, Africa.
I would like to highlight a few of the programs that we in
the Bureau of African Affairs and the Department of State are
supporting and promoting. The African Growth and Opportunity
Act continues to be the centerpiece of our trade policy with
sub-Saharan Africa. It is Africa's most important vehicle for
market access, and its unilateral trade preferences have
created enormous goodwill for the United States across the
continent.
We hope the Congress will pass the AGOA Third-Country
Fabric Provision, which expires in September, and we appreciate
enormously the commitment shown by the members of this
committee in support of that legislation. It is greatly
appreciated. This legislation has brought bipartisan support
and has been a key to the revitalization and growth of Africa's
textile industry.
The uncertainty about the renewal of the third-country
provision has also been felt. In our globally linked world,
American buyers place orders 6 to 9 to 12 months ahead. Ninety-
five percent of AGOA apparel and textile exports enter under
the Third-Country Fabric Provision, and the AGOA Third-Country
Fabric Provision is the only way that African textiles and
apparel companies can remain competitive with the larger
overseas producers.
Without this key legislation, jobs will continue to
disappear in some of Africa's most vulnerable economies,
affecting primarily women and families that they support.
In addition to AGOA, we continue to actively educate,
inform, and encourage United States companies to be more active
in the African marketplace. This is a continent on the move,
and there are enormous opportunities for United States
companies to enter the market, make money, and create jobs for
Americans here at home, as well as to expand our trade with
Africa.
In February of this year, I had the opportunity to lead a
trade mission to Mozambique, Tanzania, Nigeria, and Ghana with
some 10 U.S. energy companies ready to do business. A lack of
reasonably priced and reliable power remains one of the most
binding constraints to economic growth throughout Africa.
Governments across the continent are working to attract new
trade and foreign investment that will sustain their rapid
economic growth and build their middle classes. The goal of
this mission was to highlight opportunities for United States
companies and help address a glaring need for increased power
and electricity in the infrastructure sector in Africa.
The mission was a success, and a number of these United
States companies concluded partnership agreements with African
companies to jointly develop power projects. Ex-Im Bank and
USTDA representatives also participated in this mission to
ensure that both the United States participants and our African
partners were fully aware of United States financing options.
We are in the process of putting together a trade mission
to accompany Secretary of State Clinton when she travels to
South Africa later this year. In addition, I plan to lead a
similar trade mission in the future.
In our continuing efforts to educate and encourage U.S.
companies to pursue commercial opportunities on the continent,
last week, the State Department, in collaboration with the
Department of Commerce's U.S. Export Assistance Center in
Cincinnati, the Department of Transportation, the Export-Import
Bank, USTDA, USAID, USTR, and several other U.S. Government
agencies, hosted a United States-Africa business conference in
Cincinnati, OH.
This conference attracted over 400 participants, including
African Government officials and representatives from the
United States and African private sectors and civil society.
The United States-Africa business conference expanded on the
AGOA Forum infrastructure theme by focusing on infrastructure
development, including energy, transportation, water, and
sanitation. It showcased United States business expertise to
potential African clients and highlighted trade and investment
opportunities in Africa to United States exporters and
investors through structured networking opportunities with
African Government officials and business leaders.
We also organized site visits to United States companies
and research facilities in the Cincinnati, OH, area to
highlight potential new technologies, products, and services
that could be useful for African Governments and businesses in
growing their economies.
We also have developed two very popular programs which
develop business capacity in Africa, the African Women's
Entrepreneurship Program and the President's Young African
Leaders Initiative. This year, delegates from both of those
programs participated in both our African Growth and
Opportunity Forum and the U.S. business conference events in
Cincinnati.
However, there are still many barriers that stand in the
way of American companies that hope to do business across the
continent. In many places, corruption is too common. The cost
of finance, including investment finance, remains too high.
Infrastructure, including the absence of reliable power, is
inadequate or nonexistent, and regulatory systems are often
inconsistent and inefficient.
Many United States businesses also see African markets as
too risky. We, on our part, must work to break the stereotype
of Africa as being a single country filled with conflict,
misery, and humanitarian disaster. We have to focus on Africa's
enormous economic potential and promise, and we must encourage
American investors to take advantage of this potential.
We work closely with African Governments so that they will
continue to enact the kinds of reforms to support improved
investment climates, which will attract both domestic and
foreign investment. In addition, we continue to highlight
opportunities for trade and investment in the region for U.S.
companies and to work with them to conclude deals.
Our work with General Electric Transportation in Ghana on
the locomotive tender where GE was ultimately able to win a
$200 million deal in U.S. content is but one example of the
things that we are doing in the African Bureau and at the
Department of State to support and encourage American business
activities overseas.
We believe increased trade between the United States and
Africa is in the interest of Africa and also in the interest of
the United States, and we are determined to do our best to grow
that investment and to strengthen the economic links that exist
between the United States and sub-Saharan Africa.
We are confident that the United States can compete
effectively in Africa, but we have to continue to encourage
American companies to go to the continent, and we have to
encourage African countries to continue to make their
regulatory and business environments more conducive for
American companies. Greater United States-Africa trade is in
the interest of both America and Africa, and we are determined
to work to strengthen it.
Mr. Chairman and members of the committee, I want to thank
you for the opportunity to appear before you today. I think
this is, indeed, a very important topic and worthy of our
efforts.
Thank you.
[The prepared statement of Ambassador Carson follows:]
Prepared Statement of Ambassador Johnnie Carson
Mr. Chairman and members of the committee, thank you for providing
me with the opportunity to address the committee on what I feel is an
important and timely topic. The U.S. Government is committed to
expanding trade and investment in sub-Saharan Africa and the numbers
show our commitment. U.S. trade to and from Africa has grown
significantly in the past 10 years. U.S. exports to sub-Saharan Africa
tripled from just under $7 billion U.S. dollars in 2001 to over $21
billion dollars in 2011.
As Secretary of State Clinton said at the annual AGOA Forum 2 weeks
ago: ``12 years ago, the United States passed the Africa Growth and
Opportunity Act because we believed that the countries of Africa had
tremendous untapped economic potential that could and should be
developed. We shared a vision with many of you of a future in which
economic growth in Africa would fuel growth and prosperity worldwide .
. . trade and investment would multiply . . . and people across the
continent would have new opportunities to start their own businesses,
earn higher salaries, improve their lives, and lift the fortunes of
their families and communities.''
In large part, this vision is becoming reality. It is my firm
belief that Africa represents the next global economic frontier. Sub-
Saharan Africa continues to weather the global economic crisis more
successfully than other regions, and is home to 6--and soon to be 7--of
the 10 fastest growing economies in the world. A recent McKinsey study
documented that Africa offers the highest rate of return on foreign
investment of any developing region and has for some years now.
Consumer spending continues to rise, and 43 percent of Africans
currently have discretionary income or could be considered middle-class
consumers.And a growing middle class is a market for American
products--from ipads to Pampers to Caterpillar tractors which increase
crop yields to GE turbines which create additional hours of on-grid
electricity to Boeing airliners which facilitate African countries'
growing links with each other and with other continents.
However, we can do more. Africa's recent economic growth is
impressive but the region still only accounts for approximately 2
percent of global trade. The second pillar of President Obama's
recently announced U.S. Strategy Toward Sub-Saharan Africa directs the
administration to ``spur economic growth, trade, and investment in sub-
Saharan Africa.'' This new approach recognizes that it is in the
interest of both the United States and our African partners to improve
the region's trade competitiveness, encourage the diversification of
exports beyond natural resources, and ensure sustained economic growth
which benefits all sectors of society.
This new strategy elevates economic growth, trade, and investment
issues by calling for increased U.S. focus to (1) promote an enabling
environment for trade and investment ; (2) improve economic governance;
(3) promote regional integration; (4) expand African capacity to
effectively access and benefit from global markets; and (5) encourage
U.S. companies to trade with and invest in Africa.
In addition to the President's new U.S. Strategy Toward Sub-Saharan
Africa, our efforts to increase our commercial engagement in Africa are
firmly in line with Secretary Clinton's global focus on Economic
Statecraft. The State Department's economic statecraft policy harnesses
the forces of global economics to advance our diplomatic agenda and
puts the tools of our diplomacy to work to meet our economic goals. We
are committed to using every opportunity available to advance not only
diplomatic and political priorities but our economic and commercial
goals as well. I would like to highlight a few of the programs that the
Bureau of African Affairs has been working on as we shift our economic
orientation toward Africa from focusing almost exclusively on
development assistance to promoting sustained economic growth through
private sector, commercial, trade and investment activities.
The African Growth and Opportunity Act continues to be the
centerpiece of our trade policy with sub-Saharan Africa. It is Africa's
most important vehicle for market access and its unilateral trade
preferences have created enormous goodwill for the United States on the
continent. As you know, many African countries are not taking full
advantage of the benefits of AGOA. However, some AGOA beneficiary
countries take good advantage of the provisions for fabric and apparel
product lines. The Third-Country Fabric Provision component of AGOA was
designed to provide an opportunity for AGOA-qualified countries to be
more competitive in labor intensive textile processes such as sewing,
stitching, and cutting fabric.
It was widely recognized that most African countries were not able
to compete in the more capital intensive process of producing fabric
from raw cotton. African manufacturers have successfully used the AGOA
Third-Country Fabric Provision to create jobs, not just in the
manufacturing countries but have used this provision to create cross-
border pan-African supply chains. These supply chains also encourage
regional integration--one of our key goals for the continent. Fabric
and apparel exports are the second-largest AGOA export after extractive
industry products. However, these imports still account for less than 2
percent of U.S. imports.
I'd like to say a few words about what is likely to happen if
third-country fabric legislation is not renewed. In our globally linked
world, American buyers place orders 6 to 9 to 12 months ahead. Ninety-
five percent of AGOA apparel and textile exports enter under the third-
country provision. And the AGOA Third-Country Fabric Provision is the
only way that African textile and apparel companies can remain
competitive with larger producers such as China, Vietnam, and
Bangladesh.
Without our help, jobs will continue to disappear in some of
Africa's most vulnerable economies, affecting primarily women and the
families they support. Eighty-five percent of these imports come from
just four countries: Lesotho, Kenya, Mauritius, and Swaziland. I know
that diplomats from these countries have come to see you to emphasize
the disproportionate effect that lack of renewal of this provision will
have on their economies.
The effects of the loss of orders are troubling. At the AGOA Forum,
the Swazi Minister for Trade told AGOA delegates that the loss of the
provision will ``shut the country down.'' The textile and apparel
sector is the largest formal sector employer with over 15, 000 jobs and
employment is already 41 percent in this small, landlocked country.
Loss of just one of these jobs means that 10 people lose their
livelihood, since Swazi officials calculate that each textile job
directly supports 10 people. Lack of orders have already led to plants
closures in Namibia, robbing people of their legitimate livelihoods and
governments of much-needed tax revenues. The Mauritians report that
their orders are down 30 percent since January due to the uncertainty
whether this provision will be renewed in a timely fashion.
Madagascar's loss of AGOA eligibility in 2009 is a possible model
of what could happen if this provision were to expire. Prior to its
loss of AGOA eligibility, Madagascar was one of the top textile
producing countries in Africa, exporting over $2050 million in textiles
in 2007. Due to 2009 coup, the Government of Madagascar lost all AGOA
benefits, including the textile provision. Apparel exports plummeted by
$150 million in 2010. This more than $150 million drop in textile
exports resulted in the loss of 50,000 jobs which will more than likely
never return.
We continue to actively educate, inform, and encourage U.S.
companies to be more active in Africa. This is a continent on the move
and there are enormous opportunities for U.S. companies to enter the
market, make money, and create jobs for Americans here at home.
In February, I led a trade mission to Mozambique, Tanzania,
Nigeria, and Ghana with 10 U.S. energy companies ready to do business.
A lack of reasonably priced reliable power remains one of the most
binding constraints to economic growth throughout Africa. Governments
across the continent are working to attract new trade and foreign
investment that will sustain their rapid economic growth and build
their middle class. The goal of this mission was to highlight
opportunities for U.S. companies and help address a glaring need for
increased power sector infrastructure in Africa. The mission was a
success and a number of these U.S. companies concluded partnership
agreements with African companies to jointly develop power projects.
Ex-Im Bank and USTDA representatives also participated in the mission
to ensure that both the U.S. participants and our Africa partners are
fully aware of U.S. financing options. We are in the process of putting
together a trade mission to accompany the Secretary to South Africa for
the U.S.-South Africa Strategic Dialogue. In addition, I plan to lead
similar trade missions in the future and continue to help and encourage
U.S. companies to be a part of the growing economic dynamism of Africa.
In our continuing efforts to inform, educate, and encourage U.S.
companies to pursue commercial opportunities on the continent, just
last week, the State Department, in collaboration with the Department
of Commerce's U.S. Export Assistance Center in Cincinnati, the
Department of Transportion, the Ex-Im Bank, USTDA, USAID USTR, and
several other U.S. Government agencies, hosted a U.S.-Africa Business
Conference in Cincinnati, OH. This conference attracted well over 400
participants, including African government officials, and
representatives from the U.S. and African private sectors and civil
society.The U.S.-Africa Business Conference expanded on the AGOA Forum
infrastructure theme by focusing on infrastructure development,
including energy, transportation, and water and sanitation. It
showcased U.S. business expertise to potential African clients and
highlighted trade and investment opportunities in Africa to U.S.
exporters and investors through structured networking opportunities for
African government officials and business leaders with U.S. state and
local government officials and business leaders; informational sessions
on U.S. Government opportunities and services from various federal
agencies; and site visits to companies and research facilities
highlighting potential technologies for Africa.
Cincinnati was selected as the conference location for its
potential to increase commercial partnerships with Africa at local,
state, and regional levels given its concentration of Fortune 500 and
1000 companies. I am pleased that the Cincinnati conference built on
the successes of the 2010 Kansas City, MO, business conference.
Bringing African government officials and private sector
representatives outside of the beltway allows us to more effectively
focus on business to business linkages.
We also have two very popular programs which develop business
capacity in Africa, the African Women's Entrepreneurship Program (AWEP)
and the President's Young African Leaders Initiative. This year
delegates from both programs participated in both our AGOA Forum and
U.S.--Africa Business Conference events. AWEP is an outreach,
education, and engagement initiative that targets African women
entrepreneurs to promote business growth, increase trade both
regionally and to the United States using AGOA, create better business
environments, and empower African women entrepreneurs to become voices
of change in their communities. The State Department organizes an
annual AWEP professional exchange program for these women to improve
their skills and has created a series of public-private partnerships
with ExxonMobil, Intel, Vital Voices and the Cherie Blair Foundation
for Women.
This year's President's Young African Leaders Initiative included
the Innovation Youth Summit and Mentoring Partnership with Young
African Leaders and brought more than 60 participants to the United
States for 3 weeks of professional exchange and entrepreneurial hands-
on training. This initiative encourages U.S.-Africa collaboration to
promote business innovation, investment and corporate social
responsibility activities in Africa.
However, there are still many barriers that stand in the way of
companies that hope to do business there. In many places, corruption is
too common. The cost of finance, including investment finance, is too
high. Infrastructure is lacking or inadequate. Regulatory systems are
often inconsistent and inefficient. Also, many U.S. businesses see
African markets as too risky. The perception of Africa as poverty
filled and strife ridden persists. We work closely with African
governments so that they will continue to enact the kinds of reforms to
support improved investment climates which will attract both domestic
and foreign investment. In addition, we continue to highlight
opportunities for trade and investment in the region for U.S. companies
and to work with them to conclude deals. Our work with GE
Transportation in Ghana on a locomotive tender where GE was ultimately
able to win a deal worth $200 million in U.S. content is but one
example. We are confident that the United States can compete
effectively in Africa, but we have to continue to encourage American
companies to go to Africa and we have to encourage African countries to
continue to make their regulatory and business environment more
conducive for American business. Greater U.S.-Africa trade is in the
interest of both America and Africa.
Senator Coons. Thank you, Assistant Secretary.
The Assistant Administrator, Mr. Gast.
STATEMENT OF HON. EARL GAST, ASSISTANT ADMINISTRATOR FOR
AFRICA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON,
DC
Mr. Gast. Good afternoon, Chairman Coons, Ranking Member
Isakson, and Senator Udall. It is my pleasure to appear before
this subcommittee again.
Sub-Saharan Africa is one of the fastest-growing regions in
the world. It is home to 6 of the world's 10 fastest-growing
economies. Foreign direct investment is approaching $80 billion
a year, and trade has tripled over the last decade.
This fortune is not the result of good luck. It is the
result of years of hard work and better management, governance,
capital in-flows, and business climate. Yet Africa's growth has
not translated into transformational development and poverty
reduction, which is why two of the pillars of President Obama's
recently unveiled strategy toward Africa are promoting
opportunity and development and spurring economic growth,
trade, and investment.
The African Growth and Opportunity Act, AGOA, has been the
cornerstone of our efforts to foster the next generation of
emerging markets, and it is working. Since 2001, exports under
AGOA have increased more than 500 percent, and the African
Coalition on Trade estimates that as many as 1.3 million jobs
have been created indirectly by AGOA, supporting upward of 10
million persons throughout the continent.
Many of these jobs are held by women, a vital building
block for development, given that African women are more likely
to invest job-related income into food security, health, and
education of their families. In addition, there is a
significant relationship between trade and development. Every
dollar that we invest in trade competitiveness--aid for trade--
is associated with a $42 increase in the value of developing
country exports within 2 years.
At the AGOA Forum earlier this month, USAID and the U.S.
Geothermal Energy Association publicly announced their
partnership to help develop East Africa's geothermal resources.
The extensive geothermal resources found along the Rift Valley
not only have the potential to provide clean power for African
economies, but also a significant spur for investment and
cooperation between United States and African energy companies.
USAID's newest trade and investment initiative, the African
Competitiveness and Trade Expansion Initiative, ACTE, is
furthering the progress and partnerships of AGOA. Through
USAID's three trade hubs, ACTE focuses on the role that African
Governments, business, and civil society play in advancing
regional and international trade.
USAID's trade hubs have been successful in developing best
practices in customs procedures, processes, and technology.
Combined, these initiatives have reduced the time, cost, and
redtape long associated with trading in Africa.
Working in tandem with ACTE, the U.S. Government's
Partnership for Growth aligns broader U.S. priorities for trade
and investment with countries that have a proven positive track
record in policy and development, while our Private Capital
Group for Africa is helping to deploy agency resources and
tools to leverage private investment.
One early success under the Private Capital Group for
Africa was the launch of the Partners Forum, a group of U.S.
industry leaders who advise on how to best engage for the
private sector and align business and development goals. They
provide invaluable insight into how to operate, and the process
is cementing our commitment to continuous engagement with the
private sector to identify where priorities align and
partnerships are possible.
The New Alliance for Food Security and Nutrition, launched
by President Obama last month at the G8 summit, is an important
piece of this effort that seeks to boost responsible private
sector investment and facilitate greater partnership among
African governments, donors, and the private sector. So far, 48
companies have pledged to invest over $3 billion across the
agricultural value chain, a commitment that has the potential
to improve the lives of millions of small farmers.
This kind of inclusive economic growth, trade, and
investment is imperative to achieving lasting, durable
development. USAID will bring to bear all of its strengths,
catalyzing growth through public-private partnerships,
leveraging private capital and investment, harnessing on-the-
ground and industry knowledge, and leveling the playing field
for domestic and international entry to implement the
administration's strategy toward Africa.
Thank you for inviting me to speak with you today on this
critical issue, and I welcome any questions you might have.
[The prepared statement of Mr. Gast follows:]
Prepared Statement of Earl W. Gast
Good morning Chairman Coons, Ranking Member Isakson, and members of
the subcommittee. It is my pleasure to appear before you again.
Sub-Saharan Africa is one of the fastest growing regions in the
world. In 2011, it was home to 6 of the world's 10 fastest-growing
economies. Foreign direct investment is approaching $80 billion a year,
and trade has tripled over the last decade. Consumer spending is set to
rise 80 percent by 2020 and Africa now has a fast-growing middle class,
expected to increase from 60 million to 100 million people by 2015.
The continent's fortune is not the outcome of good luck. It is the
result of years of hard work and better macroeconomic management;
improved economic and political governance; a reduction in armed
conflicts; increasing foreign capital inflows, particularly direct
investment; and improvements in the business climate.
The President's strategy toward sub-Saharan Africa, released June
14 to coincide with the African Growth and Opportunity Act (AGOA)
Forum, renews our emphasis on spurring economic growth, trade, and
investment in Africa, including promoting an enabling environment for
trade and investment, regional integration, improved economic
governance and expanded African capacity to trade. As America supports
the development of Africa's economic growth, it can generate new export
markets and tap into a common market that could one day outpace India
or China.
Yet the commodity boom in resource-rich countries has not yet
succeeded in generating strong, positive, economywide spill-over
effects to other sectors or neighboring countries. And resource-poor
states remain on the sidelines, constrained by their inability to
mobilize domestic resources as well as attract external resources--
apart from official aid flows that sustain a minimum level of
investment that prevents the development process from stalling
altogether. Their small, expensive markets keep them isolated from the
dynamic changes occurring from globalized markets. Domestic firms often
miss out on technical expertise, technology transfer, and productivity
gains from foreign direct investment. Market informality and a limited
tax base limit many countries' domestic resource base.
Nor has Africa's growth translated into meaningful development and
poverty reduction. Basic infrastructure lags far behind that of other
developing regions; the African Development Bank estimates that
inadequate infrastructure suppresses Africa's per capita growth rate by
as much a 2 percentage points a year. Political fragility, ethnic
conflict, and food insecurity plague even the most stable economies
such as Kenya and South Africa.
Trade openness has been instrumental in the remarkable economic
growth in East and Southeast Asia. But Africa has not seen these same
benefits; the continent's share in world trade has declined from around
6 percent 25 years ago to approximately 2 percent today. Intra-African
trade is not faring much better. More than 80 percent of Africa's
exports are destined for markets outside of Africa; as a contrast, 40
percent of North American trade occurs with other North American
countries and 63 percent of Western European trade is among other
Western European nations.
A recent World Bank report concluded that the continent is losing
billions of dollars in potential trade earnings every year because of
high trade barriers with neighboring countries. Procedures and
regulations vary by country, which, coupled with a lack of
infrastructure, significantly increases the time and cost required to
ship goods across borders. In some cases, it is less expensive to ship
a container of goods to Nairobi from Europe than from Lagos. The
implications are far-reaching: huge opportunities are lost for
specialization and value addition. Production and export structures
oriented to primary commodities--minerals, timber, coffee, cocoa, oil,
gas--often come at the cost of high-value products that would provide
broad-based benefits and create jobs.
Many African governments recognize the detrimental impact of high
trade barriers. Throughout the continent, they are working to build
bridges across geographical boundaries to create important economic
trade regions. Although regional agreements vary, and often overlap,
all have the goal of reducing complicated trade barriers among member
countries. African regional economic communities have launched various
trade liberalization initiatives to stabilize and remove barriers to
trade, harmonize customs duties and internal taxes, facilitate trade
through information and promotional services and abolish restrictions
to the movement of people, goods, services, and investments across
borders.
AGOA is the cornerstone of the U.S.-Africa commercial relationship,
and is the most generous bilateral trade legislation the United States
has ever enacted. AGOA is a key tool in U.S. efforts to foster
development of the next generation of emerging markets, which includes
building effective trading partnerships between the United States and
the countries of sub-Saharan Africa. It provides substantial trade
preferences that, along with those under the Generalized System of
Preferences and Most-Favored Nation tariff treatment, allow almost all
goods produced in the AGOA-eligible countries to enter the U.S. market
duty-free. AGOA offers tangible incentives for African countries to
continue their efforts to open their economies and build free markets.
Promoting prosperity, open markets, and good governance in Africa
through programs like AGOA, has improved the trade environment for both
U.S. and African businesses and spurred economic growth.
It has worked. Since 2001, exports under AGOA have increased more
than 500 percent, from $8.15 billion in 2001 to $53.8 billion in 2011.
About 90 percent of these exports have been oil, which underscores
Africa's growing strategic importance to the United States. At the same
time, under AGOA, the volume of nonenergy exports to the United
States--that critical engine for growth in jobs and economic
development in Africa--has increased 275 percent, from $1.2 billion to
$4.5 billion between 2001 and 2011. Paul Ryberg, the president of the
African Coalition on Trade, which has companies and trade organizations
in 19 African countries, estimates that as many as 1.3 million jobs
have been created indirectly by AGOA, supporting up to 10 million
people. Many of these jobs are held by women--a vital building block
for development given that African women are more likely to invest job-
related income in the food security, health, and education of their
families.
In May 2011, the U.N. Economic Commission for Africa conducted a
survey in Africa of AGOA's benefits. Three-quarters of the responding
companies viewed AGOA as ``very important'' (58 percent) or
``important'' (17 percent). Seventy-five percent of the companies
indicated that AGOA had contributed to job creation and capacity-
building, and a majority of the respondents emphasized the importance
of business support services, such as greater technical assistance for
conforming with Sanitary and Phytosanitary Standards, and promoting
African products in the U.S. market.
Trade capacity-building has been central to USAID's work to achieve
our development objectives on the continent, particularly the
realization of the Millennium Development Goals (MDGs). MDG 1, to
eradicate extreme hunger and poverty, is furthered by achieving full,
productive, decent employment for all, especially women and young
people. Trade and trade agreements increase productive, value added
employment opportunities beyond what a self-contained, subsistence
economy can provide. It also reduces the proportion of people who
suffer from hunger, because free trade, in the context of sound
agricultural policy and global integration, balances the differences in
natural endowments and labor productivity. Trade also contributes to
MDG 8, to develop a global partnership for development, by nurturing an
open, rule-based, predictable, nondiscriminatory trading and financial
system.
Additionally, there is an unavoidable link between the
international trading regime and the enjoyment of human rights. The
U.N. Office of the High Commissioner for Human Rights has found that
economic growth through free trade increases the resources available
for the realization of human rights. Countries do not qualify for AGOA
unless they are determined to have established, or made continual
progress toward establishing the rule of law and political pluralism;
combating corruption; enacting policies to reduce poverty and increase
the availability of health care and educational opportunities;
protecting human rights and worker rights; and eliminating certain
child labor practices.
An extensive study--``From Aid to Trade: Delivering Results''--
conducted in November 2010 found a statistically significant
relationship between USAID trade capacity-building obligations and
developing country export. Specifically it found that an additional $1
of USAID trade competitiveness assistance is associated with a $42
increase in the value of developing county exports within 2 years. In
addition, USAID support for trade and investment in Africa provides a
significant contribution to trade negotiations conducted by the U.S.
Trade Representative.
Over the past 10 years, USAID programs have improved the enabling
environment for U.S. trade with sub-Saharan Africa; empowered African
small and medium-sized enterprises to increase their exports to U.S.,
regional, and international markets; and facilitated regional economic
integration. Between 2006 and 2010, USAID's African Global
Competitiveness Initiative supported over $5 billion in nonpetroleum
exports; leveraged $2.8 billion for energy, information and
communication technologies, and transportation infrastructure,
resulting in over 1.35 million Africans gaining access to the Internet.
At the regional level, USAID efforts for an improved enabling
environment have helped to advance cross-border integration and boost
intra- and extra-regional trade--work primarily carried out by USAID's
three Trade Hubs located in Botswana, Ghana, and Kenya. These Hubs have
implemented innovative and important initiatives to reduce both legal
and illicit bottlenecks along major trade corridors, establish single
border posts, and computerized customs procedures.
An analysis by the Organization for Economic Cooperation and
Development and the World Trade Organization in 2011 concluded that
USAID's Trade Hubs had been largely successful in developing best
practices in customs procedures, processes, and technology. They have
helped speed up customs clearances in Mozambique, improved customs
procedures in Southern Africa, and established a model for regional
economic commissions to harmonize standards, monitor compliance with
trade protocols, and facilitate the analysis of technical trade issues.
Combined, these initiatives have reduced the time, cost, and redtape
long associated with trading in Africa.
USAID's Trade Hubs count many successes. The Southern Africa Trade
Hub's efforts to extend border operating hours along the Trans Kalahari
Corridor, introduce a single customs declaration, and implement a
corridor performance management system, contributed to an increase in a
twelvefold usage of the corridor and a reduction in travel time from 72
to 48 hours. In East Africa, USAID support for customs reform in 2010
resulted in the implementation of a common customs software platform
that allows customs officials to communicate virtually across borders.
This reduced the time it takes to transport goods along the Mombasa-
Kigali trade corridor by 5 days and reduced the cost of trading goods
in the East Africa region by 2 percent, despite a 19.2-percent increase
in fuel cost in 2010.
At the Sleek Garments factory in Accra, Ghana, a sign overlooks a
bustling assembly line of 300 workers: ``Quality First, Quantity
Second.'' Sleek's founder and CEO, Nora Bannerman, has held to that
philosophy since she began her career as a fashion designer 30 years
ago. And she is determined to maintain it as Sleek shifts into mass
production, stitching casual shirts and work uniforms for some of the
largest retail chains in the United States. Sleek is part of Ghana's
blossoming apparel manufacturing cluster, which has been encouraged by
the government to relocate and build several clothing factories. Many
of these factories export to the United States under AGOA's Third
Country Fabric Provision, which has provided hundreds of thousands of
jobs across sub-Saharan Africa. USAID's West Africa Trade Hub helped to
put Ghana on the radar as an exporter of high-quality garments by
connecting Bannerman with international buyers, providing financial
planning services, and advising her on pre-export financing to purchase
fabric for her orders.
The Presitex garment company in Lesotho was growing and looking for
ways to keep expanding its operations and was especially interested in
taking advantage of AGOA so it could begin exporting to the United
States. At the same time, clothing manufacturers in South Africa were
looking for regional suppliers of textiles and other clothing inputs,
like yarn. Presitex used to source from Asia, but, needing to reduce
transport costs, it turned to USAID's Southern Africa Trade Hub for
help. The Hub put Presitex in touch with a knitting mill in South
Africa and helped them to negotiate a $1.2 million annual deal.
Lesotho's apparel industry has grown to become especially successful
under AGOA--at one time supporting 50,000 jobs. And regional
integration is considered critical for the survival of Lesotho's
apparel industry, both to maintain job opportunities in Lesotho and as
a platform for future economic growth.
When 24 private sector stakeholders and the USAID West Africa Trade
Hub cofounded the African Cashew Alliance (ACA) 5 years ago, its
mandate was simple and clear: to increase cashew processing in West
Africa in order to create jobs and reduce poverty. The opening of six
new major processing facilities over the last 6 months--which will
employ as many as 5,000 people--is yet more evidence that the alliance
is a success. The ACA today includes over 135 members from 23
countries, including every African cashew-producing country and buyers
and retailers from every major international market. In a recent ACA
survey of its members found that more than 80 percent had used the
alliance's services to grow their business.
Bringing together every aspect of the industry has allowed
international buyers to quickly assess the opportunities--and act.
``None of our business in Africa would have been possible without the
ACA,'' said Shalin Behal of IRACEMA, a leading processor from Brazil
that has purchased millions of dollars of African cashews. ``The ACA
has introduced us to all the key players in the region, facilitated
field trips and all our first steps in doing business here.'' The
impacts in the communities where the processing facilities are located
are significant. Residents of a town in Cote d'Ivoire said
prostitution, once a problem in the community, had all but disappeared
once the factory opened. This was attributed to the hundreds of jobs
that were created for young women--some of the almost 10,000 cashew
processing jobs ACA has created in West Africa.
Under the President's new Strategy toward sub-Saharan Africa,
USAID's work will capitalize on Africa's steadily rising middle class
and burgeoning opportunities, particularly in finance and
infrastructure, to promote U.S. trade and investment in the region.
USAID is uniquely positioned to take a major role in the implementation
of the President's strategy, particularly spurring economic growth,
trade and investment. Staff in both Washington and the field have a
deep knowledge of the African economic scene, both in terms of
macroeconomic conditions and in terms of what businesses need to be
successful in Africa. USAID has supported macro and micro policy
reform, key to accelerating growth; built the capacity for policy
analysis in both government and the private sector; and strengthened
various institutions of economic governance such as bank supervision,
tax collection, and commercial courts.
Many of USAID's programs have focused on analyzing the constraints
to private sector development and to helping remove existing obstacles,
both directly and through empowering businesses and business
associations to bring the obstacles they face to the attention of their
governments. USAID also has strong relationships with both the U.S. and
African business communities; USAID implements a number of programs
that provide information and link U.S. investors to opportunities in
Africa, including the Africa Infrastructure Program. It provides
specialized advisors to African governments to address legal,
financial, regulatory, and other constraints preventing private sector
investment in energy infrastructure. In the past 3 years alone, these
efforts have leveraged over $700 million in private sector investment
in the energy sector, with an emphasis on clean energy.
USAID's newest trade and investment initiative--the African
Competitiveness and Trade Expansion (ACTE) Initiative, announced in
2011--is furthering the progress USAID has made, and supports the
President's new U.S. Strategy toward sub-Saharan Africa. Through
USAID's three Trade Hubs, ACTE focuses on the role African governments,
businesses, and civil society play in advancing regional and
international trade, increasing the international competitiveness of
key value chains, and promoting trade and investment between the United
States and Africa and within Africa.
USAID established the Private Capital Group for Africa (PCGA) in
2011 to help deploy Agency resources and tools to leverage private
investment. For every U.S. assistance dollar, PCGA activities are
anticipated to leverage $30 in private capital to support key
development goals. For example, in West Africa we are supporting the
formation of a lending company to be coowned by U.S. companies to
support supply chains in the region. We are also working to link a U.S.
investment company with Kenyan pension funds to coinvest in small and
medium-sized enterprises in Africa. With just an $18 million investment
from USAID, this partnership has the potential to catalyze over $500
million in private funds that will support the expansion of over 500
enterprises, provide sustainable livelihoods to over 100,000
smallholder farmers, and support 42,000 jobs in sub-Saharan Africa. One
of PCGA's early successes was the launch of the Partners Forum, a group
of U.S. leaders of industry (in particular those from the investment
sector) who provide advice on how to best engage with the private
sector and align business and development goals. The forum represents
our commitment to continuous engagement with the private sector to
identify where priorities align and partnerships are possible.
At the same time, USAID's Partnership for Growth aligns with these
broader U.S. priorities for trade and investment among countries that
have a proven, positive track record in policy and development. Our
alliances with Ghana and Tanzania are generating investment and trade
opportunities for U.S. energy companies, increasing the availability
and consistent supply of energy for U.S. companies operating in those
countries, supporting regional integration to develop economically
attractive markets, and facilitating increased trade opportunities in
Ghana.
Looking forward, green technologies offer another promising
opportunity to expand U.S.-Africa trade. A 2011 report by Frost &
Sullivan--``Mega Trends in Africa: A Bright Vision for the Growing
Continent''--suggests that investment in renewable energy in the
continent will rise to $57 billion by 2020 as interest in wind, solar,
and geothermal power soars. Consequently, at this year's AGOA Forum,
USAID and the U.S. Geothermal Energy Association publicly announced
their partnership to help develop East Africa's geothermal resources.
The extensive geothermal sources found along the East Africa Rift
Valley not only has the potential to provide clean power for African
economies, but also a significant spur for investment and cooperation
between U.S. and African energy companies. USAID plans to continue to
make innovative public-private partnerships like this one to support
development while also opening new markets for the U.S. investment.
Spurring economic growth, trade, and investment, along with
promoting opportunity and development, are two pillars of the
President's strategy toward sub-Saharan Africa, and they are
inextricably linked. Inclusive economic growth, trade, and investment
are imperative to achieving lasting, durable development. USAID will
bring to bear all of its strengths catalyzing growth through public-
private partnerships, leveraging private capital and investment,
harnessing on-the-ground and industry knowledge, and leveling the
playing field for domestic and international entry to implement the new
Presidential Policy Directive on Sub-Saharan Africa.
Senator Coons. Thank you, Mr. Gast.
Ms. Liser.
STATEMENT OF FLORIZELLE LISER, ASSISTANT U.S. TRADE
REPRESENTATIVE FOR AFRICA, OFFICE OF THE U.S. TRADE
REPRESENTATIVE, WASHINGTON, DC
Ms. Liser. Chairman Coons, Ranking Member Isakson, Senator
Udall, thank you for the opportunity to speak with you today
about the Obama administration's strategy to encourage economic
growth, trade, and investment in Africa. We welcome your
interest and your active support for advancing the United
States trade and investment relationship with sub-Saharan
Africa.
On June 14, 2012, President Obama approved a new
Presidential policy directive for sub-Saharan Africa. This new
strategy commits the United States to be proactive in the face
of the numerous challenges and opportunities facing sub-Saharan
Africa. In particular, it directs the United States to expand
our efforts to increase economic growth, trade, and investment
with sub-Saharan Africa.
USTR is part of an interagency effort building on the
successes we have had to date and fostering sustained economic
growth and promoting U.S. trade and investment with the
countries of the region. AGOA, as was said, is the cornerstone
of America's trade policy with Africa. The administration is
committed to working with Congress toward a seamless renewal of
AGOA beyond 2015 to provide the predictability needed for
United States and African businesses to continue to reap the
benefits of AGOA.
The administration is consulting with Africa trade
stakeholders, including Congress, African Government officials,
United States and African private sector and civil society, on
modifications needed to make AGOA even more effective and
mutually beneficial. AGOA's performance and effectiveness are
closely tied to its Third-Country Fabric Provision, which, as
you know, is set to expire in September 2012.
The Third-Country Fabric Provision is crucial to the
continued survival of Africa's textile and apparel industry. It
has generated, as was said previously, hundreds of thousands of
jobs in sub-Saharan Africa and has helped American retailers
reduce their costs, diversify their supply chains, and provide
greater low-cost apparel options for U.S. consumers.
Swift passage of legislation extending AGOA's Third-Country
Fabric Provision is, as you know, urgently needed to ensure
AGOA's continued success and the stability, development, and
economic growth of sub-Saharan African countries. We applaud
Congress' recent agreement to advance extension of AGOA's
Third-Country Fabric Provision and appreciate the work that you
and other members of this committee have undertaken to move
this important provision forward.
The annual U.S.-Sub-Saharan Africa Trade and Economic
Cooperation Forum, also known as the AGOA Forum,
institutionalizes a high-level dialogue on ways to foster
stronger economic ties between the United States and sub-
Saharan Africa. The 11th AGOA Forum was held in Washington on
June 14-15 with the theme ``Enhancing Africa's Infrastructure
for Trade,'' and other AGO private sector and civil society
events were held in Washington, DC, and Cincinnati.
Secretary Clinton, Ambassador Kirk, Secretary LaHood, and
other senior U.S. Government officials, Members of Congress,
African trade, finance, and foreign affairs ministers, African
ambassadors, and our private sectors and civil societies
participated in this year's forum to advance the United States-
Africa trade and investment relationship.
Thanks to you, Chairman Coons, and to you, Senator Isakson,
in particular for attending the forum and meeting with the
ministers to discuss AGOA impending legislation. It was truly
appreciated by them.
USTR also coordinates and leads the interagency engagement
with our sub-Saharan African partners on trade and investment
issues under our trade and investment framework agreements, our
TIFAs. The United States has 11 TIFA partners in sub-Saharan
Africa, and we also have a trade, investment, and development
cooperative agreement with the five countries of the Southern
African Customs Union.
In addition, the Obama administration is pursuing a new
trade and investment partnership with the five countries of the
East African community, which is one of the most cohesive and
ambitious regional economic groupings in sub-Saharan Africa.
At a recent meeting which Ambassador Kirk and senior
administration officials held with the EAC Secretary General
and trade ministers, the United States and the EAC agreed to
explore under the partnership a regional investment treaty--
this would be new--a trade facilitation agreement, and
continued U.S. trade capacity-building assistance, as well as a
commercial dialogue.
These agreements and other activities under this
partnership will help to promote EAC regional integration and
economic growth and to expand and diversify U.S.-EAC trade and
investment.
Also in our toolbox in terms of improving the
attractiveness of an economy's investment climate, perhaps none
is more powerful than an investment treaty. These agreements
establish a framework of reciprocal protections that include
nondiscriminatory treatment; free transfer of investment-
related funds; prompt, adequate, and effective compensation in
the event of an expropriation; and transparency in government.
Our most recently concluded BIT was with Rwanda, and we
hope that our most recently launched BIT negotiation with
Mauritius will conclude soon. And we are actively pursuing BIT
discussions with other countries in the region, including
Ghana.
Africa presents many opportunities for United States
businesses. It is a market not yet fully tapped and one that is
viewed as a last frontier for many global actors, such as
China, Brazil, India, and the European Union. No other region
has rates of return on investment as high as Africa, and it is
proving to be a growing investment destination, including for
United States businesses.
And with Africa's growing middle class, youth bulge, and
undercapitalized entrepreneurs, including many women-owned
SMEs, we are focused on increasing United States exports to and
investment in Africa and fostering joint ventures that can
benefit United States businesses, including our own SMEs. Our
efforts growing out of the new U.S. Strategy Toward Sub-Saharan
Africa, including a Doing Business in Africa campaign, will
build on existing programs and initiatives, such as the
National Export Initiative.
In conclusion, the administration is working to strengthen
the United States-sub-Saharan Africa trade and investment
relationship through a range of trade and investment
initiatives. The new U.S. Strategy Toward Sub-Saharan Africa
builds on this strong foundation and ensures that our trade
policy will continue to encourage economic growth, enhance
trade and investment, support more jobs in the United States
and Africa, and help realize the full potential of the United
States-sub-Saharan African economic partnership.
Thank you.
[The prepared statement of Ms. Liser follows:]
Prepared Statement of Florizelle Liser
introduction
Chairman Coons, Ranking Member Isakson, and other distinguished
members of the subcommittee, thank you for the opportunity to speak
with you today about the Obama administration's strategy to encourage
economic growth, trade, and investment in Africa. We welcome your
interest in, and support for, advancing the U.S. trade and investment
relationship with sub-Saharan Africa.
the administration's strategy for sub-saharan africa
On June 14, 2012, President Obama approved a new Presidential
Policy Directive (PPD) for sub-Saharan Africa. To advance U.S.
interests in Africa, the strategy sets forth four strategic objectives:
(1) strengthen democratic institutions; (2) spur economic growth,
trade, and investment; (3) advance peace and security; and (4) promote
opportunity and development.
The new strategy commits the United States to be proactive in the
face of the numerous challenges and opportunities facing sub-Saharan
Africa. In particular, it directs the United States to expand our
efforts to increase economic growth, trade, and investment. USTR is
part of an interagency effort--building on the successes of the
partnerships we have built in previous years--to foster sustained
economic growth and to promote U.S. trade and investment with sub-
Saharan Africa.
spurring economic growth, trade, and investment
Sub-Saharan Africa is expected to grow by more than 5 percent this
year, and between 2000 and 2010, 6 of the 10 fastest-growing countries
in the world were in sub-Saharan Africa. Sustained economic growth has
the potential to lift millions out of poverty and foster long-term
stability. Today's challenge is to ensure that these gains continue and
are spread across the continent. The administration's new strategy
addresses these challenges by calling for increased U.S. focus to spur
economic growth through expanded trade and investment by (1) promoting
an enabling environment for trade and investment; (2) improving
economic governance; (3) promoting regional integration; (4) expanding
African capacity to effectively access and benefit from global markets;
and (5) encouraging U.S. companies to trade with and invest in Africa.
This approach recognizes that it is in the interest of the United
States and our African partners to promote regional integration, create
new trade and investment opportunities for African and U.S. firms,
encourage the diversification of African exports beyond natural
resources, and ensure that the benefits from growth are broad-based.
agoa and the third-country fabric provision
AGOA is the cornerstone of America's trade and investment policy
with sub-Saharan Africa. AGOA's performance and effectiveness are
closely tied to its Third-Country Fabric (TCF) Provision, which is set
to expire in September 2012. The TCF provision is crucial to the
continued survival of Africa's textile and apparel industry--it has
generated hundreds of thousands of jobs in sub-Saharan Africa,
including in least developed countries, and has helped American
retailers reduce their costs, diversify their supply chains, and
provide greater low-cost apparel options for U.S. consumers. Swift
passage of legislation extending AGOA's TCF provision is necessary and
its extension urgently needed to ensure AGOA's continued success--and
the stability, development, and economic growth of sub-Saharan African
countries. We applaud Congress' recent agreement to advance AGOA's
Third-Country Fabric Provision, and appreciate the work that members of
this committee have undertaken to move this important provision
forward.
Beyond apparel, AGOA is a measurable success. Total two-way trade
between the United States and sub-Saharan Africa has increased by over
300 percent since AGOA was enacted in 2000. U.S. imports under AGOA
have increased by over 500 percent from 2001 (the first full-year of
AGOA trade). Petroleum imports dominate this trade, but nonpetroleum
AGOA trade has tripled to nearly $5 billion in 2011, spurred by
significant growth of nontraditional, value-added products such as
apparel, cut flowers, fruits and nuts, wines, cocoa, and footwear. AGOA
apparel imports have doubled, and today about twice the number of
eligible countries are shipping noncommodity goods under AGOA than they
were a decade ago. Additionally, U.S. exports to sub-Saharan Africa
have more than tripled since 2001. These exports support thousands of
U.S. jobs and help African countries to modernize their economies.
The Obama administration is committed to working with Congress
toward a seamless renewal of AGOA beyond 2015 to provide the
predictability needed for U.S. and African businesses, entrepreneurs,
buyers, and investors to continue to reap the benefits of AGOA. The
administration is consulting with Africa trade stakeholders, including
Congress, African Government officials, U.S. and African private
sector, and civil society representatives on modifications needed to
make AGOA more effective and mutually beneficial.
promoting united states-sub-saharan africa trade and investment
As an office within the Executive Office of the President, USTR is
responsible for coordinating and leading the interagency engagement
with our sub-Saharan partners on trade and investment issues, including
under our Trade and Investment Framework Agreements (TIFAs) with
individual countries and regional organizations. U.S. TIFAs provide a
formal mechanism for a high-level engagement to address bilateral
issues and to help enhance United States-sub-Saharan Africa trade and
investment relations. The United States has 11 TIFA partners in sub-
Saharan Africa: Angola, Ghana, Liberia, Mauritius, Mozambique, Nigeria,
Rwanda, South Africa, the East African Community (EAC), the Common
Market for East and Southern Africa (COMESA), and the West African
Economic and Monetary Union (UEMOA). The United States also has a
Trade, Investment, and Development Cooperative Agreement with the five
countries of the Southern African Customs' Union (SACU).
In addition, the Obama administration is pursuing a new trade and
investment partnership with the EAC, which is one of the most cohesive
and ambitious regional economic groupings in sub-Saharan Africa. At a
recent meeting which Ambassador Kirk and senior administration
officials held with the EAC Secretary General and Trade Ministers, the
United States and the EAC agreed to explore under the partnership, a
regional investment treaty, a trade facilitation agreement, continued
U.S. trade capacity-building assistance, and a commercial dialogue. We
are working closely with the Commerce Department to move forward on the
commercial dialogue, which would create practical ways in which U.S.
and EAC governments can work together and with our respective business
communities. These agreements and other activities under the
partnership will help to promote EAC regional integration and economic
growth, and to expand and diversify U.S.-EAC trade and investment. They
could also serve as building blocks toward a more comprehensive trade
agreement over the long term.
In the toolbox of U.S. Government initiatives to improve the
attractiveness of an economy's investment climate, perhaps none is more
powerful than an investment treaty. Bilateral investment treaties
(BITs) help protect U.S. investment and help promote economic growth by
encouraging market-based economic reform and the policies that make
doing business in Africa more attractive for U.S. businesses. These
agreements establish a framework of reciprocal protections that include
nondiscriminatory treatment; free transfer of investment-related funds;
prompt, adequate, and effective compensation in the event of an
expropriation; and transparency in governance. U.S. BITs also give
investors the right to bring investment disputes to neutral,
international arbitration panels.
The United States has BITs in force with six countries in sub-
Saharan Africa, and the region has become a locus for recent U.S. BIT
activity. Our most recently concluded BIT was with Rwanda--an agreement
that entered into force on January 1 of this year. We hope that our
most recently launched BIT negotiation with Mauritius will soon
conclude, and we are actively pursuing BIT discussions with other
countries in the region, including with the members of the East African
Community in the context of our EAC Partnership, and with Ghana.
The administration recognizes the importance of African regional
integration and intra-African trade. Facilitating intra-African trade,
reducing barriers to such trade, and harmonizing investment and trade
rules will build economies of scale, improve African competitiveness,
and attract investment to the region. Thus, we are supporting African
regional integration through a number of initiatives designed to build
trade capacity and promote trade and investment within sub-Saharan
Africa, strengthening regional economic communities, forging closer
ties with the African Union, and supporting African efforts to
establish free trade areas such as the Tripartite initiative (covering
COMESA, the EAC, and SADC) and the recently announced Continental Free
Trade Area (which is scheduled to be enacted by 2017).
The annual United States-Sub-Saharan Africa Trade and Economic
Cooperation Forum (also known as ``the AGOA Forum'') institutionalizes
a high-level dialogue between senior officials of the United States and
AGOA beneficiary countries, the private sector and civil society on
ways to foster stronger economic ties between the United States and
sub-Saharan Africa. The 11th AGOA Forum was held in Washington, DC, on
June 14-15, 2012, with the theme, ``Enhancing Africa's Infrastructure
for Trade,'' and other AGOA private sector and civil society events
were held in Washington, DC, and Cincinnati. As always, the forum was
an important opportunity to discuss the challenges in expanding the
U.S.-African trade and investment relationship. Thanks to you Chairman
Coons and to Senator Isakson for attending the forum and meeting with
the Ministers to discuss AGOA and pending legislation.
This year's focus on infrastructure was timely. According to the
World Bank, the annual requirement for infrastructure expenditure and
maintenance in sub-Saharan Africa is about $93 billion a year. However,
only about $45 billion is being mobilized, leaving a gap of close to
$50 billion annually. This significant funding gap cannot be met by
current official sources of funding alone. Private investment could
help close the funding gap for Africa's infrastructure. Currently,
intra-African trade stands at less than 10 percent of African gross
domestic product and Africa's share of world trade is only 3 percent.
The United States is working with the international community, African
governments and the private sector to improve Africa's hard
infrastructure--including the roads, ports, power pools, and telecom
networks, and Africa's soft infrastructure--such as the laws,
regulations, and business environment that impact trade and investment
decisions. This collaboration is critical because improvements in
Africa's infrastructure could significantly advance our efforts to
support regional integration, create larger markets for U.S. exports
and promote economic growth in Africa.
africa as a market for u.s. business
With the continent-wide growth mentioned earlier, Africa presents
many opportunities for U.S. businesses. It is a market not yet fully
tapped and one that is viewed as a ``last frontier'' for many global
actors such as China, Brazil, India, and the European Union. No other
region has rates of return on investment as high as
Africa, and it is proving to be a growing investment destination,
including for U.S. businesses. And with Africa's growing middle class,
youth bulge, and undercapitalized entrepreneurs--including many women-
owned SMEs, we are focused on increasing U.S. exports to, and
investment in, Africa, and fostering joint ventures that can benefit
U.S. businesses--including our own SMEs. Our efforts growing out of the
new U.S. Strategy Toward Sub-Saharan Africa--including a ``Doing
Business in Africa Campaign''--will build on existing programs and
initiatives such as the National Export Initiative.
conclusion
The administration is working to strengthen the United States-sub-
Saharan Africa trade and investment relationship through a range of
trade and investment-related initiatives. The new U.S. strategy toward
sub-Saharan Africa builds on this strong foundation and ensures that
our trade policy will continue to encourage economic growth, enhance
trade and investment, support more jobs in the United States and
Africa, and help realize the full potential of the United States-sub-
Saharan Africa economic partnership.
Senator Coons. Thank you, Ms. Liser.
We are now going to begin rounds of 7 minutes--7-minute
question rounds, if we could. And let me start with one of the
elements of your testimony, Ms. Liser. AGOA, we are committed
to reauthorization of the third-party fabric agreement, but as
the list that was shown in the content that accompanied my
opening statement, there is many countries that have failed to
fully utilize AGOA.
We saw it in Uganda, where we recently visited, that they
simply are not taking advantage of it. Even though in the last
dozen years, exports under AGOA have increased more than 500
percent, they have tended to be fairly narrowly focused, either
in textiles or in extractive industries like petroleum.
So how are we working to strengthen participation in AGOA?
And then what is the next step? What is the framework for
moving forward beyond AGOA? You made some reference to BITs and
to the emerging partnership with the EAC. How do we take the
trade relationship between the United States and Africa, as it
were, to the next level?
Ms. Liser. So, first of all, speaking to the issue of the
utilization of AGOA to date, we recognized probably some years
after AGOA was launched that many of the products that are
covered under AGOA were areas where or sectors where the
Africans really had not had much experience in producing those
products in the volumes and at the prices that were needed to
be competitive in the United States market or, frankly, in any
other market.
So one of the things that has happened is that as they have
begun to develop their industrial bases, money going into
various sectors--not just apparel, but we are also seeing
value-added agricultural products that are coming in, footwear,
a number of areas, horticulture, et cetera. As they have become
more competitive in those sectors, we actually are seeing a
diversification of the products that are coming into the United
States under AGOA.
And so, we are pleased with that, but we know that there is
a lot that is still untapped, a lot of potential that still
needs to be realized. In terms of how we take this to the next
level, I think there are two sides to this.
First, on the African side, I think as was said earlier,
they have to keep doing what they are doing in terms of
economic reforms, in terms of improving governance, rule of
law, and improving the business and investment environment.
United States businesses and other businesses from around the
world are simply not going to go to Africa unless they continue
to do that, and we are seeing increases in investment into the
region not just from the United States, but from others.
On our side, I think it is important that we continue to
work to partner with them, both through trade capacity-building
support, which AID gives. The hubs have done a fabulous job of
helping these countries and entrepreneurs to actually develop
products that they can even ship to us. So we need to keep
working with them.
And then we also need to keep pushing them to realize that
beyond simply taking advantage of one-way preferences, they do,
indeed, need to prepare to be more competitive in the global
economy. They have to be continuing to push their businesses so
that they can compete regionally and be able to trade more with
each other and also to be able to trade more in the global
economy.
Senator Coons. Thank you, Ms. Liser.
Assistant Administrator Gast, if you would, there are a
couple things that you mentioned, and I wanted to pursue them,
if I could, about the Private Capital Group. The reference just
made to the trade hubs, I certainly was impressed with the West
Africa trade hub, when Senator Isakson and I had an opportunity
to visit.
You have recently deployed your first-ever, I think, USAID
field investment officers to three offices. You have just
announced the winner of the second African Diaspora Marketplace
Grant Program. How are the resources that USAID is deploying to
engage the Africa diaspora community in the United States and
how are the strengths and skills of field investment officers
and the trade hubs making a contribution to strengthening the
capacity for trade?
And what role do you see the Foreign Commercial Service
officers play, particularly in places like the West African
trade hub, where I was disappointed to recently hear they were
going to be withdrawn? So I would be interested in that.
Mr. Gast. If I may, I will start with the question about
the field investment officers. Soon we hope to have three on
the continent. I know that is not a sufficient number, but it
is something that we are building, and we are building that
capacity.
And it is really not to take the place of the Foreign
Commercial Service officer. They have very distinct roles. But
what this is, the purpose of having a field investment officer
is really to help facilitate the public-private partnerships
related to development and growth that are critical to Africa's
success.
And with regard to the trade hubs, as Flor mentioned, they
certainly do help improve the regulatory process within
governments. But a critical element of their work and, in fact,
most of where they spend their attention is helping to
strengthen alliances and cooperatives so that companies that
are part of those cooperatives can then begin to meet
standards, for example, phytosanitary standards that would
allow them to export their products to the United States.
One example, and perhaps you saw this, Senators, when you
were out in West Africa, was the Cashew Alliance. And that has
had tremendous success over the last 4 or 5 years in building
an Africawide alliance, 23 countries, organizations in 23
countries, belonging to that with new processing facilities
being created on the continent.
Senator Coons. Thank you.
My last--my first round of questions to the panel, if I
could, just Assistant Secretary Carson, all three of you have
spoken in your testimony about the links between good
governance, security, and economic development, the importance
of improving rule of law, systems, regional collaboration.
How does U.S. policy actively promote these goals? And in
your view, are we dedicating enough resources to these
priorities when the vast majority of U.S. foreign assistance is
currently dedicated to health and food security?
Ambassador Carson. Thank you very much, Mr. Chairman, for
that question.
Undoubtedly, we believe that good governance is a primary
factor not only in the governing of a society, but also in the
protection of and promotion of business interests. If we have
governments that follow constitutional norms, the rule of law,
and have good judicial systems, we believe that those
democratic practices that help to protect human rights also
help to protect corporate rights, intellectual property rights,
investment rights, and the business activities of citizens.
Those judicial norms and procedures protect citizens and
individual liberties, but they also protect the sanctity of a
contract. They allow for prosecution of individuals who
undermine intellectual property rights. They sanction
individuals who engage in corruption.
And if there is a problem between a corporate concern in
the United States and Africa, we can be assured that an African
country that practices democracy, has a good judicial system,
that an American company can be assured that it will be able to
adjudicate its concerns and interests in a fair and transparent
manner in the court of law.
So we believe democracy does play a role both in the
protection of individual rights, but in corporate rights and
business interests as well. In that regard, we spend a great
deal of money trying to strengthen democratic institutions,
trying to strengthen judiciaries, helping to train magistrates,
helping to streamline court procedures, making adjudication of
court processes much more rapid.
We work with legislative branches to ensure that there are
fair regulations and good laws that help to improve the
economic environment in a country so that it will be favorable
toward business interests, both those from the local citizens
as well as those on the outside. So we work also with civil
society and with regulatory organizations in countries to help
strengthen their capacity to serve, both as watchdogs over bad
procedures, but also to promote good regulatory environments as
well.
With respect to money for different categories of
assistance, we are always appreciative of the amounts of
assistance that we receive to promote democracy and governance,
and we do this by supporting free media, stronger legislatures,
stronger judicial branches. But we also recognize that it is
unfair to equate what we get for democracy and governance with
what we spend in health care and what we spend in areas like
Feed the Future and humanitarian and agricultural programs.
Health care, agriculture, humanitarian assistance programs
are more costly. In democracy and governance, we are providing
people. We are providing advice. We are providing expertise and
a lot of intellectual knowledge.
And yes, we do provide some material things that go along
with it, books. But if you are running a health care program,
especially one dealing with HIV/AIDS, you are providing very
expensive medicines as well. You are providing lots of
technical equipment that goes into hospitals.
Same thing in the agricultural sector, the inputs are going
to be substantially more costly in feed, fertilizer, equipment,
and other things. So we would expect that there would be a
difference.
As I say, we appreciate enormously the resources that we
get for democracy and governance. I think it is key to being
able to deliver better services, but they shouldn't be looked
at on a one-to-one ratio.
Senator Coons. Thank you.
Senator Isakson.
Senator Isakson. The chairman had a graph showing that
China had overtaken the United States as the No. 1 trading
partner with Africa. And I think, Mr. Gast, you referred to
that in your remarks, didn't you? China being a major trading
partner, or was that Johnnie?
Mr. Gast. No.
Senator Isakson. You didn't? Did either one of you--do any
one of the three of you know what it was that caused China to
overtake us? What product they are exporting, what--is it
energy? Is it rare earth minerals? It is petroleum? What is it
that caused that change?
Ambassador Carson. Senator Isakson, I think it is a
combination of things that have resulted in China's expanding
commercial activities. In terms of imports, China is, indeed,
trying to import as much raw material as it possibly can. It is
now an importer of petroleum from Africa. It is an importer of
iron ore. It is an importer of other kinds of minerals and
metals. It is also importing some rare earth materials as well.
But it is also a major exporter. And it is exporting
inexpensive consumer products into the African market. It is
also exporting mining machinery and some capital goods as well.
So it has not been one single item. It has been a number of
items, both on the export and the import side of the ledger.
Senator Isakson. I would assume that if we fail to renew
the third-party fabric agreement in AGOA, that gap will widen.
Is that correct?
Ambassador Carson. I would think so, that it very well
could because we would see a substantial decrease in the amount
of fabric and textile coming into the United States from
Africa. Ms. Liser probably has the number on the top of her
head, but I would think that the largest single item after
petroleum coming into the U.S. market is textiles.
And so, the loss of the Third-Country Fabric Provision
would result in a sharp decline, as we are seeing, in African
textiles coming into the United States. But the impact for us
is significant, but for Africa, it is catastrophic because it
means that jobs will be lost. It means that factories will also
be closed and that the business probably will disappear and not
come back.
Senator Isakson. Ms. Liser, did you want to comment on
that?
Ms. Liser. Yes. I wanted to just add just a few other
things. One of the things that has been seen--one of the things
that has happened in the trade relationship between the
Africans and the United States is that for the first time, they
are able to effectively ship value-added products to us and do
so competitively.
That is not necessarily the case in terms of the way that
their trade pattern is with other countries, including China.
And they have told us that part of the reason why AGOA is so
important to them, even though they may only constitute a very
small portion of our import market in any of the areas that we
are importing from them--whether it is toys or sunglasses or
wine or fruit juices or apparel--even though that is the case,
it is one of the places where they know they can ship those
value-added products to us.
And so, we are hoping that, obviously, by the extension of
the Third-Country Fabric Provision, that their apparel, which
now actually is about a third of all of their nonoil exports to
us, and so they are shipping other products, nonoil products to
us as well. But we want to keep that growing and increasing,
and we don't think that those kinds of products are going to
their other partners.
And that is an area where for all countries in the world if
all you export are raw commodities at the lowest end of the
value chain, you will never be able to really capture a large
share of world trade. And so, that is part of why Africa today
only has about 2 percent of all world trade. It is because they
are exporting largely raw commodities, and other countries are
taking those products, processing them, and adding the value
and getting a lot more for it once that happens.
Senator Isakson. Well, one of the reasons I have worked, I
know Senator Coons has as well, for the extension of the third-
party fabric agreement is we actually will be ceding our
position and making our position on the continent worse and
making China's better by just looking the other way in terms of
the AGOA extension. So I appreciate both of your answers on
that.
Mr. Gast, you made a comment that piqued my recollection of
a trip to Uganda and a trip to Ethiopia that I have taken,
talking about women in Africa and talking about food security
and their tendencies to be better savers and better investors.
They also become better presidents.
[Laughter.]
Senator Isakson. I know President Banda in Malawi and
Liberia's President Ellen Johnson are doing a tremendous job.
And a lot of people don't realize how much USAID is doing in
terms of development of women in Africa and how they are
emerging through many NGO programs like the Village Savings and
Loan Associations that CARE promotes on the continent and
throughout the developing world.
So the African woman is really a part of this expansion of
opportunity and future for the continent of Africa, and I just
wanted to commend USAID and you and Dr. Shah for what you are
doing in that regard.
Mr. Gast. Thank you, Senator.
Just one comment, and recently, President Banda was here
from Malawi. And she spoke at our Frontiers in Development, and
we had been supporting her and women's institutions in Malawi
for many decades, several decades. And her response to the
crowd was, ``I am a product of USAID.''
Senator Isakson. Senator Coons and I met with her in the
Foreign Relations hearing room in the Capitol, and we saw
exactly that same type of commentary from her. And she has
taken some courageous steps in a very short period of time to
really turn that country around.
Thank you, Mr. Chairman.
Senator Coons. Thank you.
Senator Udall.
Senator Udall. Thank you, Chairman Coons.
And let me follow up a little bit on some of the questions
that have been asked here, specifically about China's economic
and trade engagement with Africa and it surpassing the United
States and Africa at least in a dollar amount.
Among the reasons that this can be viewed as troubling is
China's poor record with respect to resource management and
sustainability. In your opinion, are there opportunities for
expanded U.S. engagement on these issues?
Ambassador Carson. Senator Udall, thank you very much for
that question.
We engage China on questions related to Africa, and last
November, I traveled to Beijing for 2 days of meetings with
Chinese officials. We also talk to African Government leaders
about China as well.
We tell our African colleagues that they should hold China
and Chinese companies to the same rigorous high standards that
they hold American, European, and other Asian countries,
including Japan and South Korea, to when they enter into trade
agreements.
We see a problem with some Chinese economic engagements in
Africa that are very much different from our own. When American
and Western European companies generally engage in the
continent, we not only make an investment, but we also bring
new technology. We transfer skills. We hire local labor. We
deal in transparent contractual negotiations. We are subject to
the Foreign Corrupt Practices Act of our own country, and we
hire locally and follow local labor and environmental
standards; standards which are quite high.
Frequently, we see in many investments from China that
these same rigorous standards are not followed. China will
bring in large number of laborers to undertake and complete
contracts in countries where there is large levels of
unemployment.
There is not a high degree of skill transfer and not a high
degree of new introduction of technology. And in some cases, we
see that environmental procedures and labor local laws are not
followed.
So to our African partners we say look at what you get.
Look at it transparently and openly, and we hope that you will
accept what is, in fact, best for you. To the Chinese, we say
to them that it is important to carry out your activities in an
open and transparent way and one in which you are treating
Africans as partners in the process.
So, yes, the engagement is there. There is a set of
fundamental differences between them, but we recognize, too,
that China does have a right to be an economic competitor in
the continent, just as the British and the French and the
Japanese are. But we ask them to be a responsible competitor,
an open competitor.
I also note that most of what China does across the
continent is, in fact, done commercially, is not done as a part
of a development assistance program. China does not have an
agency or a department that is the equivalent of USAID or MCC.
Those don't exist there.
And they certainly don't have the kind of transparency in
contractual arrangements that we do, nor do they have a Foreign
Corrupt Practices Act that allows for extrajudicial oversight
of any contracts that are made.
Senator Udall. And it is true, isn't it, that many of those
Chinese companies are state-run companies and that if they have
that oversight, I think they could really make a difference if
they had some structure set up within their government which
would investigate, if they had a law in place like a Foreign
Corrupt Practices Act.
Have you seen--Senator Kerry chaired--or Chairman Kerry
chaired a hearing here on ivory and the illegal ivory trade and
how what was really happening with the poaching in Africa and
the ivory trade in Asia and in China was a result of them not
cracking down on this. Did you raise that in your meetings?
When you raise these kinds of issues, do you get assurances
that all the issues you mentioned in terms of local labor and
environmental standards and all that, do you get a sense from
the Chinese they are trying to change, they are trying to do
something about it? Are they trying to put laws in place?
Ambassador Carson. Let me say that I have not discussed the
issue of ivory trade or CITES regulations with the Chinese. We
are aware of the concerns of the international community about
the illegal movement of ivory and rhino tusks from Africa into
Asia. We know that the demand for these products helps to feed
poaching in Africa, but it has not been something that I have
talked about.
I think my colleagues at the State Department do follow
CITES issues, just as the Department of Interior does. And so,
this is a discussion with many governments. As you are well
aware, it is illegal for a U.S. citizen to import any ivory
products into the United States under our own law, as well as
under the CITES convention and endangered species.
With respect to the second half of your question, we
encourage the Chinese to act responsibly in their trade and
commercial relations with Africa. But again, as I say, there is
a dual responsibility that Africans also ensure that they are
getting compliance from the Chinese in following local labor
environmental standards and that they are providing value for
money and that they are employing locally and that there are
skills transfers.
We recognize that many Chinese investments and trading
opportunities in Africa are dominated by state-run
institutions, and some of those are not nearly as transparent
to the international community or, for that matter, to African
governments and to African citizens as they should be.
Senator Udall. Thank you very much, Assistant Secretary
Carson.
Senator Coons. Thank you, Senator Udall.
I would be interested in hearing from all three members of
the panel, if I could, your view on the President's Strategy
Toward Sub-Saharan Africa, in particular the Doing Business
with Africa campaign and how you see that being implemented
going forward?
Your view on the bill cosponsored by Senators Durbin,
Isakson, and myself, I referenced previously about trying to
significantly expand U.S. trade relationships. And the last,
the initiative to streamline potentially, an administration
announced initiative to streamline Government resources related
to trade and how your respective agencies currently coordinate
what can at times be overlapping responsibilities with relation
to trade.
If you would just in series briefly address that question
or series of questions? Thank you.
Mr. Assistant Secretary.
Ambassador Carson. I will start. Let me say that in
promoting greater trade with Africa, Secretary of State Clinton
has taken a major role by rolling out during the AGOA
conference this year her economic statecraft policy. She has
made it very clear that every Ambassador is a commercial
attache for American business interests overseas, and that
includes Africa.
That every embassy is charged with helping to promote
greater trade and investment. This is key for us in Africa as
well. In addition, we have undertaken, as I pointed out, this
year and will continue to do so in the future, trade missions
to Africa, where we will identify a particular sector and bring
American business officials to Africa.
Secretary Clinton will be in Africa during the last week of
July. And as I mentioned in my testimony, she intends to take a
rather large group of American business leaders with her to
South Africa to help to promote trade and investment between
the United States and South Africa.
We also have expanded AGOA over the last 2 years to not
only include the AGOA Forum in Washington, where we have an
opportunity for American Government officials to talk with
African Government officials and African business leaders, but
we have added a U.S. trade and investment component, where we
have gone out to Kansas City 2 years ago. In June 14-15 after
the AGOA Forum, we were in Cincinnati, OH. We intend to build
on each of these tiny initial steps to strengthen what we are
doing.
And finally, we are taking the lead in creating
organizations like AWEP, the African Women's Entrepreneurial
Program, which, again, was an innovation that the Secretary,
Secretary Clinton asked us to move forward on. It is also part
of our effort to engage young African leaders.
And again, this year for the very first time, we brought
some 62 young African leaders to the United States to be here
for a 3-week period to help to promote business initiatives
with them, to put them in mentorship programs with American
companies to help them get ideas on how they could grow their
businesses in Africa. All of this will feed into the Grow
Africa program.
There are other strategies that are out there, but these
are just some of the things that have been done and the last
new things that have been done in the last year or two for
which we will build on as we strengthen our efforts to reach
out to Africa in the business community.
Mr. Gast. We enthusiastically support the President's
strategy, especially the pillar on promoting economic growth in
Africa. And we support it in many ways.
One is in Washington. This strategy now gives us a common
framework for all agencies through which to work, and that
helps us sharpen our efforts. It helps us set strategic
priorities in Washington for our agencies that are working in
Africa. And then it also helps identify overlap and gaps and
manage those overlaps and gaps.
As the Assistant Secretary mentioned, the Ambassador in-
country is empowered as the CEO of all U.S. Government
operations. And so, that is where we get the on-the-ground
operational coordination of all agencies in engaging with
African partners, as well as U.S. partners. And I can say that
all of our Ambassadors are fully engaged on promoting U.S.
trade and investment.
And then just let me give you an example of how this
coordination is playing out. From the U.S. Government's
perspective, there is a focus on the EAC, East African
Community. USTR and the State Department certainly doing their
part. We are helping the EAC through trade capacity-building.
But also one of the things that we looked into was
establishing the partnership with the U.S. Geothermal
Association. Why? Because there is significant potential in the
Rift Valley. Members of the EAC have great potential to develop
their power sector, and power is one of the major impediments
to trade and investment and primarily investment in Africa.
And the United States has a tremendous comparative
advantage. And so, we think with the tools that we have and the
competitive advantages that we have in the private sector and
among agencies, we can collectively pool our efforts and really
make meaningful impact in a short period of time.
Senator Coons. Thank you.
Ms. Liser.
Ms. Liser. So one of the things, obviously, that the PPD is
doing is helping us, as Mr. Gast was saying, within the U.S.
Government to be more coordinated, to set our priorities, and
to work more effectively together in all the pillars of the
PPD, but in the particular one that focuses on trade and
investment and economic growth.
But I wanted to touch on here the Doing Business in Africa
campaign really is an effort to recognize that the U.S.
Government really can only go so far, that we absolutely have
to have U.S. businesses actively engaged. And it is not as
though United States businesses are not in Africa. We know that
there are many of them that are there, many of them that are
involved in joint ventures, selling products.
I think just the other day I heard about Rwanda Air is
going to be purchasing a Boeing aircraft. So we have businesses
there. But I think the point of the Doing Business in Africa
campaign will focus on the fact that even for the United
States, it is not the Boeings that drive our trade. It is the
small, medium-size enterprises, women-owned, minority-owned,
diaspora-owned enterprises.
And it is those companies that we want to get out and
educate about the opportunities in Africa, which will help them
to grow their businesses. The most successful small businesses
in the United States are able to do that by expanding out from
the U.S. market and identifying foreign markets that they can
be competitive in and sell their goods and services to.
So we will be working closely with the Commerce Department
and others in this Doing Business in Africa campaign, which, as
I said, I think will be very much focused on our medium-size
and smaller businesses to make sure that they know that Africa
has the highest rate of return on investment, to know that
there are partnerships that are being built, working in terms
of importing products as well, which can help them in terms of
supplying from Africa.
Senator Coons. Well, thank you, Ms. Liser.
You mentioned in your testimony progress toward a bilateral
investment treaty with Ghana, and yet at the same time, the
Foreign Commercial Service, if I understand correctly, has just
withdrawn their representative, their participant in the trade
hub. Would you see the absence of a Foreign Commercial Service
officer in Ghana, in the regional trade hub, as any impediment
to progress in a bilateral investment treaty?
Assistant Administrator Gast referenced how the PPD is
helping identify areas of overlap or gaps, and one of the
things we are trying to do in the Senate is to identify gaps,
overlaps, areas where we could be constructive by either adding
more resources or directing more priority. How do you see that
playing out in Ghana?
Ms. Liser. Well, you know, clearly it is useful to have
Foreign Commercial Service officers in as many places as
possible in Africa. We certainly see the value of that, and we
are hoping that through this PPD process and identifying our
priorities--priority countries, priority issues, areas that
have not gotten as much focus as they should--that that will
give agencies, including Commerce, an opportunity to perhaps go
back and to look at where they need to put those valuable
resources because they can't put them in every country.
But if I could just say I have been to a number of
countries in sub-Saharan Africa, and I believe that the
embassies, their econ officers, political officers, the people
in the embassy are doing a great job. People at AID who are
posted there, people who are, I think, also very useful in the
exercises that we undertake to improve and enhance our trade
and investment relationship.
So even as we are planning for TIFA meetings, we are
talking to people at the Embassy. They are helping us to set up
the right meetings, bring in the right people.
So we are hopeful that notwithstanding the fact that there
might not be a Foreign Commercial Service officer in Ghana, we
think that just pursuing this agreement signals to people that
Ghana certainly is a place that is ready to welcome with all of
the protections, et cetera, that are needed, new U.S.
investment--they already have quite a bit of U.S. investment--
but we are hoping that by negotiating a BIT with them that they
will attract even more.
Senator Coons. Thank you.
Senator Isakson.
Senator Isakson. Ms. Liser, I think this would probably be
for you. When talking about developing more exports from the
United States to Africa, for me, the No. 1 problem in Africa in
terms of business development and trade expansion is
infrastructure--roads, highways, bridges. But most importantly,
a reliable electrical system, which everyone that we have met
with that has come to talk about it from the Great Lakes region
or wherever, they talk about their unreliable power system.
The United States has some great leaders in power. General
Electric and the generators that they sell comes to mind. What
are we doing to help facilitate expansion of U.S.-manufactured
products in the energy field to the African Continent?
Ms. Liser. I think, actually, on that one, Johnnie would be
good because he just took a group of people there. But if I
could just say this one thing about the opportunities for U.S.
businesses there, that we have been working with the Africans
to help them recognize that the high cost of energy,
transportation, and other infrastructure in Africa, as well as
some of the redtape in moving products in and out of ports and
airports, is keeping them from being competitive and eating up
some of the advantage that they have through things like AGOA.
And so, to some extent, just making sure that they are
focused on investing in regional transport infrastructure,
regional energy infrastructure that will bring costs down for
production, make it more attractive for U.S. businesses to be
there, we think that this focus will actually help as well.
Senator Isakson. Secretary Carson.
Ambassador Carson. Senator Isakson, I think your question
is absolutely spot on. Nigeria today, a country of
approximately 160 to 170 million people and is one of the top
10 exporters of oil in the world and is the fifth-largest
exporter of oil to the United States with enormous gas
reserves, probably on any given day produces less electrical
power than is produced and generated in the city of New York.
This speaks to the need for electricity, reliable
electricity in Africa's largest, most populous country, but it
also is reflective of the problem across the continent. We see
the need. We have tried at the Department of State to respond
to it, to do on this side to educate, to inform, and encourage
American energy companies to go out to Africa to see for
themselves the enormous potential there is for both investment
and business.
This is why in February of this year, we in the Africa
Bureau, I personally led a trade mission to four African
countries--Mozambique, Tanzania, Nigeria, and Ghana--of some 10
companies in the United States who we were trying to interest
in generating, distributing, and transmitting electrical power
to African countries to strengthen their capacity to do all
these things. These four countries that we visited have
enormous hydropower, enormous gas, and enormous petroleum
resources, as well as natural resources in wind and solar.
So we took these 10 companies out to give them an
opportunity to see what the potential in the marketplace was.
These were companies, some that have never been to Africa
before, but have been active in Latin America. Small companies
like Energy International all the way up to GE going out with
us as well.
Following up on this theme and using and trying to
integrate what we have been doing at one level with what we do
in other areas, as a part of this year's AGOA Forum, the focus
was on infrastructure with a key aspect being energy. That was
a discussion point at the meetings in Washington, but following
that, the Corporate Council on Africa held its infrastructure
conference here in D.C. They focused on energy.
And then we, again, as a part of the extension of AGOA,
took African ministers, business leaders, as well as some of
the women from the AWEP, the African Women's Entrepreneurial
Program, as well as some of these young African business
leaders, we took them to Cincinnati, and again, we revisited
the theme of energy there. Two of our most important site
visits were with Duke Energy, which is headquartered in
Cincinnati, and with GE, which also has a major divisional
headquarters here.
The officials, the senior officials at Duke were
extraordinarily hospitable in showing us. In both the GE
discussions and the Duke discussions, we tried to show African
businessmen and women and officials that it is possible to have
reliable, inexpensive energy generated from gas or from
gasoline or diesel, as well as from wind and solar, that it is
possible.
At one of those stops, I can't remember now whether it was
Duke or GE, one of the senior engineers told us that in off-
peak hours, he was paying approximately 4 to 5 cents a kilowatt
hour for electricity, 4 to 5 cents a kilowatt hour. And during
the high peak in which--the intense part of the day when summer
heat is highest, he was paying 14 to 15 cents a kilowatt hour
for electricity.
He also reported--they also reported that Cincinnati had
never had a power outage since 1965. The city of Cincinnati had
not had a power outage since 1965, that the backup systems were
just that good, despite the fact that they were in a weather-
prone area that had tornadoes and other things.
Contrast that to what our African Government officials were
saying to us and the business people were saying to us where
they were paying for electricity, unreliable electricity, they
were paying anywhere from 40 cents a kilowatt hour to 80 to 90
cents a kilowatt hour. And most of their electricity was being
generated by off grid as a result of the use of imported diesel
to drive high-cost electric generators.
Indeed, it is an impediment to manufacturing, keeping
manufacturing costs low. And again, our effort to help Africa
deal with this problem is twofold. As I say, one, to educate
and inform and encourage and to go along with American
companies out to Africa to show them the enormous potential
that exists. It also is bringing African business leaders and
government officials here to show them what exists in this
country and what can exist in their own countries as well.
We intend to continue to push this. Secretary Clinton has
given us the mandate to go forward and try to encourage this
through our economic statecraft. We will do it as our effort in
helping to promote Doing Business in Africa as well, but it is
a focal point
of ours. And it is not just the only focal point that we have
on
the economic radar, but it is one that we are going to continue
to pursue.
Some American companies are doing extraordinarily well out
there, and we hope to use them as examples to other American
companies about what they can do in the energy field as well.
Senator Isakson. Thank you very much.
Did you have something, Mr. Gast?
Mr. Gast. In my opening statement, I mentioned that we
established a partnership with the U.S. Geothermal Association,
and I talked about it very briefly a few minutes ago. But let
me just give you some statistics that may help illuminate the
potential that is there.
In the Rift Valley, the engineers estimate that there is
15,000 megawatts worth of potential. This is an area that is
growing, greater need for electricity, and where we have a
comparative advantage.
And where the United States has probably unparalleled
advantage in terms of technical capacity is on low-temperature
geothermal projects, and there is an estimate of about another
15,000 megawatts. This is a huge growth area for U.S.
investors, as well as driving investment and driving growth in
East Africa.
Senator Isakson. Thanks to all of you for your testimony.
Senator Coons. Thank you.
If I might, Senator, if you would just indulge me one last
question, I suspect it is of interest to both of us.
Ms. Liser, the poultry industry is of great significance to
the State of Delaware, as well as the State of Georgia and many
other States, and a significant piece of its opportunity for
the future here in the United States is in exports to Africa.
My view is that we will always do better developing exports in
partnership with countries that recognizes their legitimate
need to develop their own domestic technology and industries as
well.
The University of Delaware is host to the Avian Bioscience
Center. I recently spoke to their most recent class of folks
who came from around the world from a dozen countries,
including four from sub-Saharan Africa, to get skills in how to
manage avian flocks.
What are we doing to strengthen opportunities and access
for U.S. poultry exports in Nigeria, South Africa, Kenya? There
is many markets that have real potential, but where some, I
think, not scientifically grounded bans based on misperceptions
about avian influenza continue to make it difficult for us to
export.
And what more could we be doing to help build this sort of
partnership that would make access to those markets both more
sustainable and more mutually beneficial?
Ms. Liser. Thank you.
So, first of all, there are a number of African countries
that are importing poultry, but then there are those countries
where we have had some issues. And the issues range. For
example, in South Africa, it is an antidumping rule that has
affected the U.S. poultry exports to that country.
Ambassador Kirk, when he sat down with Minister Davies of
South Africa during the AGOA Forum, raised this again. And it
is one of the areas where we have raised it under the TIFA. But
with it having been discussed at that level, there is a
commitment to come back and to let us know more about the
decision that has been made. It is a sunset decision that has
been made where they kept the antidumping duty in place instead
of letting it expire.
So we are following up with them. There is a judicial
process that is going on there. That is kind of one country and
one issue. Nigeria, it is a somewhat different issue. The ban
that they have there, which affects some of our poultry
exports, has more to do with the philosophy that Nigeria has in
general about how one goes about building up your domestic
industries in key sectors.
And they view poultry, as do a number of African countries,
they view it as a key sector, both to supply protein to their
local people, to sell to their neighbors, et cetera. And so,
the point you were making about we want to partner with them.
We understand that they would like to grow their poultry
industries, but we also want to talk to them and work with them
so that they are not banning the imports of products where we
are competitive in that market.
And I would just say this. We have noticed--it is not true
in every country. We have noticed that they may have a
preference for certain types of chicken. It might be dark meat.
So if we could import--if we could export our dark meat and be
able to be competitive in that market, then our view is that
there is plenty of room for us to be in the market.
So we are working with them. We have raised it. We have
raised the Nigerian import ban, which is not just on poultry,
but a range of products, in our TIFA meeting, and we will be
raising it again in the fall.
And the last thing I would say is that we have also been in
contact with our poultry industry to talk to them and find out
more about what they need to do, working with us so that we can
address the specific countries and areas where we should be
able to advance our poultry exports into particular markets,
and it might even be particular products into particular
markets. But we are doing that as well.
Senator Coons. Well, thank you.
If I might, I just have a closing question for the whole
panel, which is how might we in the Senate, who are
particularly concerned about continuing to expand and promote
business relationships between the United States and Africa for
our mutual benefit, be more constructively supportive of the
work of the administration and your three agencies?
Because each of you have described a variety of initiatives
and efforts that are compelling, that are positive, and that I,
frankly, think deserve more support from the Senate, from us
individually and from our offices and from the Senate as a
body.
So here is a wide open, softball question to encourage you
in brief and in closing to let us know what more we could be
doing to support the work that each of you are doing through
your agencies.
Mr. Secretary.
Ambassador Carson. Mr. Chairman, I am going to say again
what I said at the very beginning. I appreciate your personal
commitment, as well as the personal commitment of the ranking
member, Senator Isakson, for meeting with African members who
came in from the continent to participate in the AGOA Forum. I
think that is important.
I would say things that you can do. Meet periodically with
the African ambassadors. Encourage them to continue to put in
place the kind of economic reforms and regulatory environments
that will attract American business.
Second, I would encourage you to whenever you can to speak
to American business groups and encourage them to take
advantage of the opportunities that exist to do business in
Africa and assure them that we in the U.S. Government have a
number of programs that are designed to facilitate and help
them get into the African marketplace.
Our own trade promotion efforts, our Doing Business in
Africa initiative, whether it is Ex-Im Bank or OPIC or USAID
through its trade hubs, we are out there, and we are willing to
work with the American business community to move forward.
Third, I would say do what you are doing right now. Bring
us here. Ask us what we are doing. Question us about the
effectiveness of it. And look to see where we are not doing as
much as we could and encourage us to do more.
And I will stop right there.
Senator Coons. Thank you very much.
Administrator Gast.
Mr. Gast. My answers aren't too dissimilar from the
Assistant Secretary's. First of all, our agency, the U.S.
Government, thank both of you for your personal involvement.
Both of you are frequent travelers to Africa, and both of
you are frequent visitors and participants in many of the
discussions and events that we have here in Washington and
throughout the country on Africa and investment in Africa. So
please continue to do that and be active participants.
Second, I would say continue to support the President's
Feed the Future initiative. We are seeing tremendous impact in
a very short period of time. And just recently at the AGOA
conference, we had investment commitments on the part of the
private sector, 48 companies of $3 billion, taking place on the
continent. That is huge.
Thank you.
Senator Coons. Thank you.
Ms. Liser.
Ms. Liser. And mine builds on what has already been said.
We think that it would be really helpful for you to continue to
talk to your constituents and educate them not just about trade
with Africa, but about trade more generally. I think all of us
recognize that the American public has a view about trade that
has it as sort of zero sum gain as opposed to win/win. And we
think that one of the most important things that needs to
happen is for Americans to have a really good understanding of
how trading with the rest of the world really supports the
global economy, grows jobs here, as well as in other places.
And so, as you go out and talk to people about Africa trade
and just letting them know that there are huge opportunities
that would be mutually beneficial for Africa as well as for us.
The second thing I would say is, again, you travel to
Africa. When you go there and you speak with African leaders
and talk to them about the importance of improving their
environment for business and for trade, that trade is an engine
for economic growth, and that that's the thing that is going to
move them from being dependent on aid to being able to really
be competitive in the global economy.
And we would just ask that you also speak to their
parliamentarians. That that is like really important because
sometimes we find that the leaders that we deal with, the
officials that we deal with, trade ministers, et cetera, they
get it. But we find sometimes that they will mention that their
parliamentarians don't.
And so, as a parliamentarian, we think that your engaging
in Africa with people in their Parliaments would be very
helpful.
And the last thing I will say is please continue to press
to move on the AGOA legislation, not just the Third-Country
Fabric Provision, but also on the extension of AGOA beyond
2015.
Thank you.
Senator Coons. Thank you very much.
I am grateful to our entire panel for your testimony today,
for your hard work on this important topic.
Senator Isakson, did you have a closing statement you would
like to make of any kind?
Senator Isakson. No, thank you.
Senator Coons. Then let me simply say that both of us come
out of the private sector, come from States that are known for
their economic dynamism, and are grateful for the opportunity
to engage in our home States with the diaspora community, with
our private sectors, with those who can take advantage of a
trade. And it is possible for us to sustain the sort of
engagement we are offering because it connects to American
jobs. It connects to opportunity for our own States.
So thank you very much for the opportunity to explore these
issues today. We will keep the record open for a week for those
members of this committee who might have missed the
opportunity.
I look forward to our next hearing on this topic next
month.
Thank you very much.
[Whereupon, at 4:10 p.m., the hearing was adjourned.]