[Senate Report 113-103]
[From the U.S. Government Publishing Office]
Calendar No. 181
113th Congress Report
SENATE
1st Session 113-103
======================================================================
INCREASING AMERICAN JOBS THROUGH GREATER EXPORTS TO AFRICA ACT OF 2013
_______
September 10, 2013.--Ordered to be printed
Mr. Menendez, from the Committee on Foreign Relations,
submitted the following
R E P O R T
[To accompany S. 718]
The Committee on Foreign Relations, to which was referred
the bill S. 718, to create jobs in the United States by
increasing United States exports to Africa by at least 200
percent in real dollar value within 10 years, and for other
purposes, reports favorably thereon which an amendment and
recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................2
III. Discussion.......................................................2
IV. Cost Estimate....................................................4
V. Evaluation of Regulatory Impact..................................7
VI. Changes in Existing Law..........................................7
I. Purpose
The purpose of S. 718 is ``to create jobs in the United
States by expanding programs that will result in increasing
United States exports to Africa by 200 percent in real dollar
value within 10 years.'' S. 718 directs the President to
establish, implement, and submit to Congress a comprehensive
strategy for public and private investment, trade, and
development in Africa. It requires the President to designate a
Special Africa Export Strategy Coordinator and directs the
Department of Commerce, the Department of State, the Export-
Import Bank of the United States, and the Overseas Private
Investment Corporation to improve staffing in support of trade
with Africa. To achieve this objective, S. 718 also directs the
Export-Import Bank to expand financing for projects in Africa
and ensure adequate funding to counter foreign export credit
finance that is noncompliant with agreements of the
Organisation for Economic Co-operation and Development (OECD).
II. Committee Action
S. 718 was introduced on April 11, 2013, by Senator Durbin
and co-sponsored by Senators Boozman, Coons, Landrieu, and
Cardin. On June 25, 2013, the committee considered S. 718 and
ordered it reported favorably, with amendments.
III. Discussion
A section-by-section discussion of the legislation follows.
Section 2 includes the findings and explains the purpose of
the bill, calling for a substantially greater high-level focus
on trade with Africa. Improved coordination among the Federal
agencies involved in export promotion and financing, and a
greater focus on and expansion of efforts and programs of
Federal agencies to support United States exports to Africa,
are necessary to ensure United States competitiveness in
Africa. Export growth helps United States business grow and
create American jobs. This section highlights the economic
potential of the African continent, identifies Africa as a
potential growth market for United States exports, and outlines
the strong competition created by other countries' trade
promotion programs and the activities of their export credit
agencies in Africa.
Section 3 defines the terms used in the bill.
Section 4 requires the President to establish, within 180
days of the enactment of the Act, a comprehensive strategy for
public and private investment, trade, and development in
Africa. The strategy would focus on the objective of achieving
a 200% real increase in exports of goods and services to
Africa. The strategy shall focus on: aligning United States
commercial interests with African development priorities;
developing relationships between African governments and United
States businesses; improving the competitiveness of United
States businesses in Africa; exploring the role the African
diaspora can play; promoting economic integration in Africa;
and other objectives. Section 4 requires the President, in
developing the strategy, to consult with Congress, the Trade
Promotion Coordinating Committee, relevant multilateral
development banks, the Trade Policy Staff Committee, the
President's National Export Council, United States development
agencies, Federal agencies responsible for export promotion or
financing, and the private sector, including businesses, non-
governmental organizations, and African diaspora groups.
Section 4 requires the President to submit the strategy to
Congress no later than 180 days after the date of the enactment
of the Act, and to submit a progress report within three years
of enactment. The progress report would include an accounting
of all United States Government programs to promote exports and
trade with Africa and to assist United States businesses
competing in the African market, as well as an assessment of
the extent to which the strategy has succeeded in achieving its
objectives, including: (1) development of critical analyses of
policies to increase exports to Africa; (2) increased
competitiveness of United States businesses; (3) creation of
jobs in the United States; (4) provision of sufficient support
to meet third country competition in the region; (5) assistance
to the African diaspora to participate in economic growth in
Africa; (6) promotion of economic integration in Africa; (7)
encouragement of African policies and programs that provide a
stable, safe, and transparent business environment; and (8)
contribution to transforming and integrating Africa into the
21st Century world economy.
Section 5 of the bill requires the President to designate a
Special Africa Export Strategy Coordinator to: (1) oversee
development and implementation of the strategy required by
section 4; and (2) coordinate with the Trade Promotion
Coordinating Committee and development agencies on developing
and implementing the strategy. The purpose of this section is
to improve the coordination of United States Government
agencies involved in the promotion of exports and investment
abroad.
Section 6 states the sense of the Congress that the
Secretary of Commerce and other high-level United States
Government officials responsible for export promotion,
financing, and development, should conduct a joint trade
mission to Africa no later than one year after the enactment of
the Act.
Section 7 directs specific Federal agencies to allocate
adequate personnel and ensure adequate information technology
systems, in order to successfully implement the strategy
required by section 4. The Secretary of Commerce is directed to
assign at least 10 United States and Foreign Commercial Service
officers to United States Embassies in Africa for each of the
first five fiscal years after the enactment of the Act, with
their location based on an assessment of future trade
opportunities. The Secretary of Commerce is also directed to
use existing staff to assign at least one full-time United
States and Foreign Commercial Officer to the office of the
United States Executive Director at the World Bank and African
Development Bank. Section 7 directs the Export-Import Bank to
increase staff dedicated to expanding business development for
Africa, increase the number of business development trips to
Africa and the amount of time staff spends in Africa, maintain
an appropriate number of Bank employees assigned to field
offices in the United States, and upgrade equipment and
software in order to improve processing and tracking of
applications for financing. Section 7 directs the Overseas
Private Investment Corporation to use sufficient funds to
increase the staff needed to promote economic growth and
development in Africa and strengthen and expand the private
sector in Africa, with a focus on helping United States
businesses expand into African markets. Finally, section 7
includes a Rule of Construction, which clarifies that nothing
in section 7 of the Act permits the Department of Commerce,
Department of State, Export-Import Bank, and Overseas Private
Investment Corporation to reduce personnel or alter planned
personnel increases in other regions, except where previously
anticipated or justified by decreased export opportunities.
Section 8 directs the President to develop a plan to: (1)
standardize the training for relevant Department of Commerce,
Department of State, and United States Agency for International
Development officers on the programs and procedures of the
Export-Import Bank, Overseas Private Investment Corporation,
Small Business Administration, and Trade and Development
Agency; and (2) ensure that, no later than one year after
enactment, all United States and Foreign Commercial Service
Officers stationed overseas, as well as economic officers of
the Department of State in posts where there no such officer is
assigned, receive the training.
Section 9 amends section 6(a) of the Export-Import Bank Act
of 1945 (12 U.S.C. 635e(a)) to increase, to the extent there
are acceptable final applications, the amount it finances to
Africa over the prior year's financing for each of the first
five fiscal years following enactment, and an attendant
periodic report to the relevant Senate and House committees. It
requires the Export-Import Bank to make financing available to
counter trade distorting non-OECD arrangement compliant
financing or preferential, tied aid, or other related non-
market loans offered by other nations in cases where United
States companies are competing or interested in competing, as
well as an attendant periodic report to the relevant Senate and
House committees. During the business meeting Senators Corker
and Durbin discussed their agreement that certain changes
related to section 9 would be made prior to the bill going to
the Senate floor. Section 9 makes clear that this report shall
not disclose information that would violate section 1905 of
title 18, United States Code (``Trade Secrets Act''), and shall
describe trade distorting non-OECD arrangement compliant
financing loans made by other countries to firms competing with
United States firms.
Section 10 makes technical and conforming amendments to
section 22(b) of the Small Business Act (15 U.S.C. 649(b)).
Finally, section 11 states that, where applicable, the
President shall explore opportunities to negotiate bilateral,
subregional, and regional agreements that encourage trade and
eliminate nontariff barriers to trade with African countries.
It also directs the President to ensure implementation of
existing agreements between the United States and African
countries, in a manner that maximizes the positive effects for
the United States trade, export, and labor interests as well as
the economic development of African countries.
IV. Cost Estimate
In accordance with Rule XXVI, paragraph 11(a) of the
Standing Rules of the Senate, the committee provides this
estimate of the costs of this legislation prepared by the
Congressional Budget Office.
United States Congress,
Congressional Budget Office,
Washington, DC, July 22, 2013.
Hon. Robert Menendez,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 718, the Increasing
American Jobs Through Greater Exports to Africa Act of 2013.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sunita
D'Monte.
Sincerely,
Douglas W. Elmendorf
Enclosure.
S. 718, the Increasing American Jobs Through Greater Exports to Africa
Act of 2013
Summary: S. 718 would expand federal programs and
initiatives to promote exports to Africa. CBO estimates that
implementing the bill would have discretionary costs of $15
million over the 2014-2018 period, assuming appropriation of
the necessary amounts.
Pay-as-you-go procedures do not apply to this legislation
because it would not affect direct spending or revenues.
S. 718 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated Cost to the Federal Government: The estimated
budgetary impact of S. 718 is shown in the following table. The
costs of this legislation fall within budget functions 150
(international affairs) and 370 (commerce and housing credit).
Changes in Spending Due to S. 718
By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
2014 2015 2016 2017 2018 2014-2018
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Trade Financing Agencies
Estimated Authorization Level......................... 2 2 3 3 3 13
Estimated Outlays..................................... 2 2 2 2 3 11
International Trade Administration
Estimated Authorization Level......................... 1 * * * * 2
Estimated Outlays..................................... 1 * * * * 2
Trade Promotion Strategy
Estimated Authorization Level......................... * * * * * 2
Estimated Outlays..................................... * * * * * 2
Total Changes
Estimated Authorization Level......................... 3 3 4 4 4 17
Estimated Outlays..................................... 3 3 3 3 4 15
----------------------------------------------------------------------------------------------------------------
Notes: Components may not sum to totals because of rounding.
* = less than $500,000.
Basis of Estimate: For this estimate, CBO assumes that S.
718 will be enacted early in fiscal year 2014, that the
necessary amounts will be appropriated each year, and that
outlays will follow historical spending patterns for existing
programs.
Trade Financing Agencies: Section 7 of the bill would
require the Export-Import Bank of the United States (Ex-Im) and
the Overseas Private Investment Corporation (OPIC) to increase
their staffing levels to promote trade and investment in
Africa. Based on information from those agencies, CBO estimates
that Ex-Im would hire three additional employees to serve
overseas at an annual cost of about $350,000 per person and two
additional employees to serve in the United States at an annual
cost of about $200,000 per person, and that OPIC would require
five additional employees at an annual cost of about $200,000
per person. In total, those additional personnel would require
annual appropriations of $2 million to
$3 million a year, and would cost $11 million over the 2014-
2018 period, assuming appropriation of the necessary amounts.
Section 9 would require Ex-Im to increase its activity in
Africa or to report annually to the Congress if it cannot
provide at least 10 percent of its financing to that region.
Ex-Im currently provides about 5.5 percent of its financing to
Africa. Because the bill would not increase the overall cap on
Ex-Im's financing, implementing that provision would require
the bank to reduce its financing to other regions of the world.
New financing provided to Africa could be more or less risky
than financing in other regions and could therefore increase or
decrease the appropriations needed to cover Ex-Im's subsidy
costs; however, CBO has no basis for estimating the net effect
of such changes in the bank's financing.
Finally, section 9 would require Ex-Im to report on its
activity to counter tied aid or other concessional lending by
foreign governments. Tied aid is a form of concessional lending
that requires the recipient to buy goods or services from the
donor. CBO estimates that those annual reporting requirements
would cost less than $500,000 over the 2014-2018 period,
assuming the availability of appropriated funds.
International Trade Administration: Sections 7 and 8 would
increase costs to the International Trade Administration (ITA)
by requiring a commercial service officer to be placed at the
African Development Bank and requiring the agency to develop a
training program for foreign commercial service and economic
officers with respect to programs of the Ex-Im, OPIC, the Small
Business Administration, and the United States Trade and
Development Agency.
Based on information from the ITA, CBO estimates that the
agency would spend about $400,000 per year for salaries and
administrative costs incurred elsewhere in the agency to
reassign an officer to serve at the African Development Bank.
In addition, CBO estimates that providing training for foreign
commercial service and economic officers would cost about
$400,000 to develop the curriculum and to cover the costs
incurred by attendees to travel to a central location to
receive the training. Taken together, CBO estimates that
implementing those provisions would cost $2 million over the
2014-2018 period, assuming appropriation of the necessary
amounts.
Trade Promotion Strategy: Section 4 would require the
President to develop and implement a strategy to promote
exports to Africa and section 5 would require him to designate
a special coordinator to oversee those efforts. Based on
information from the ITA, CBO estimates that implementing those
provisions would cost less than $500,000 a year over the 2014-
2018 period, assuming the availability of appropriated funds.
Pay-as-You-Go Considerations: None.
Intergovernmental and Private-Sector Impact: S. 718
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate Prepared By: Federal Costs: Sunita D'Monte and
Susan Willie; Impact on State, Local, and Tribal Governments:
J'nell L. Blanco; Impact on the Private Sector: Marin Burnett
Estimate Approved By: Theresa Gullo, Deputy Assistant
Director for Budget Analysis
V. Evaluation of Regulatory Impact
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. Changes in Existing Law
In compliance with Rule XXVI, paragraph 12 of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, existing law in which no change is proposed is shown in
roman).
TITLE 12 USC--BANKS AND BANKING
* * * * * * *
Chapter 6A--Export-Import Bank Act of 1945
* * * * * * *
Sec. 635E. AGGREGATE LOAN, GUARANTEE, AND INSURANCE AUTHORITY
(a) Limitation on Outstanding Amounts.--
(1) In general.--The Export-Import Bank of the United
States shall not have outstanding at any one time
loans, guarantees, and insurance in an aggregate amount
in excess of the applicable amount.
(2) Applicable amount.--In paragraph (1), the term
``applicable amount'' means--
(A) during fiscal year 2002, $80,000,000,000;
(B) during fiscal year 2003, $85,000,000,000;
(C) during fiscal year 2004, $90,000,000,000;
(D) during fiscal year 2005, $95,000,000,000;
(E) during fiscal year 2006, and each fiscal
year thereafter through fiscal year 2011; 1 and
(F) during fiscal year 2012 and each
succeeding fiscal year, $120,000,000,000,
except that--
(i) the applicable amount for each of
fiscal years 2013 and 2014 shall be
$130,000,000,000 if--
(I) the Bank has submitted a
report as required by section
4(a) of the Export-Import Bank
Reauthorization Act of 2012;
and
(II) the rate calculated
under section 635g(g)(1) of
this title is less than 2
percent for the quarter ending
with the beginning of the
fiscal year, or for any quarter
in the fiscal year; and
(ii) notwithstanding clause (i), the
applicable amount for fiscal year 2014
shall be $140,000,000,000 if--
(I) the rate calculated under
section 635g(g)(1) of this
title is less than 2 percent
for the quarter ending with the
beginning of the fiscal year,
or for any quarter in the
fiscal year;
(II) the Bank has submitted a
report as required by
subsection (b) of section 5 of
the Export-Import Bank
Reauthorization Act of 2012,
except that the preceding
provisions of this subclause
shall not apply if the
Comptroller General has not
submitted the report required
by subsection (a) of such
section 5 on or before July 1,
2013; and
(III) the Secretary of the
Treasury has submitted the
reports required by section
635a-5(b) of this title.
(3) Subject to appropriations.--All spending and
credit authority provided under this subchapter shall
be effective for any fiscal year only to such extent or
in such amounts as are provided in appropriation Acts.
(4) Percent of financing to be used for projects in
Africa.--The Bank shall, to the extent that there are
acceptable final applications, increase the amount it
finances to Africa over the prior year's financing for
each of the first five fiscal years beginning after the
date of the enactment of the Increasing American Jobs
Through Greater Exports to Africa Act of 2013.
* * * * * * *
SMALL BUSINESS ACT
* * * * * * *
Sec. 649.--OFFICE OF INTERNATIONAL TRADE
* * * * * * *
(b) Trade Distribution Network.--The Associate
Administrator, working in close cooperation with the Secretary
of Commerce, the United States Trade Representative, the
Secretary of Agriculture, the Secretary of State, the President
of the Export-Import Bank of the United States, the President
of the Overseas Private Investment Corporation, Director of the
United States Trade and Development Agency, the Trade Promotion
Coordinating Committee, and other relevant Federal agencies,
small business development centers engaged in export promotion
efforts, Export Assistance Centers, regional and district
offices of the Administration, the small business community,
and relevant State and local export promotion programs, shall-
(1) maintain a distribution network, using regional
and district offices of the Administration, the small
business development center network, networks of
women's business centers, the Service Corps of Retired
Executives authorized by section 637(b)(1) of this
title, and Export Assistance Centers, for programs
relating to--
(A) trade promotion;
(B) trade finance;
(C) trade adjustment assistance;
(D) trade remedy assistance; and
(E) trade data collection;
(2) aggressively market the programs described in
paragraph (1) and disseminate information, including
computerized marketing data, to small business concerns
on exporting trends, market-specific growth, industry
trends, and international prospects for exports;
(3) promote export assistance programs through the
district and regional offices of the Administration,
the small business development center network, Export
Assistance Centers, the network of women's business
centers, chapters of the Service Corps of Retired
Executives, regional offices of the Export-Import Bank,
State and local export promotion programs, and partners
in the private sector; and
(4) give preference in hiring or approving the
transfer of any employee into the Office or to a
position described in subsection (c)(9) to otherwise
qualified applicants who are fluent in a language in
addition to English, to--
(A) accompany small business concerns on
foreign trade missions; and
(B) translate documents, interpret
conversations, and facilitate multilingual
transactions, including by providing referral
lists for translation services, if required.