news analysis advocacy
tips on searching

Search AfricaFocus and 9 Partner Sites



Visit the AfricaFocus
Country Pages

Burkina Faso
Cape Verde
Central Afr. Rep.
Congo (Brazzaville)
Congo (Kinshasa)
Côte d'Ivoire
Equatorial Guinea
São Tomé
Sierra Leone
South Africa
South Sudan
Western Sahara

Get AfricaFocus Bulletin by e-mail!

Print this page

Note: This document is from the archive of the Africa Policy E-Journal, published by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived document may not work.

USA: Africa Trade Bill, 1

USA: Africa Trade Bill, 1
Date distributed: 980317
APIC Document

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Region: Continent-Wide
Issue Areas: +economy/development+ +US policy focus+
Summary Contents:
This posting contains a summary analysis of the African Growth and Opportunity Act as approved by the U.S. House of Representatives, and of concerns about the bill that may be addressed as the Senate considers its parallel version of the bill. The next posting contains selected direct excerpts from the text of the bill and from comments made in presenting an amendment by Rep. Maxine Waters.

+++++++++++++++++end profile++++++++++++++++++++++++++++++

On March 11, the US House of Representatives approved H.R. 1432, known as the "African Growth and Opportunity Act," by a vote of 233 to 186. The legislation, which has yet to be considered in the Senate, has strong support from many African diplomats and business people, but has drawn opposition from labor, environmental, and human rights groups. The Congressional Black Caucus split, with 24 voting for the bill and 12 against it. CBC Chairperson Rep. Maxine Waters voted for the bill despite the failure of two of her amendments to modify it. Within the CBC, Rep. Jesse Jackson, Jr. was the most outspoken opponent who voted against the bill.

In comparison with early draft versions of the bill, which tended to present trade and investment as a panacea which would replace aid, debt relief and other measures, the bill as passed strongly reaffirms the need for continued aid and debt relief, affirms human rights and even includes poverty alleviation as well as growth among the objectives to be pursued. Critics, however, note that such provisions are in non-binding sections of the bill, and that the operative "conditionalities" lay heavy stress on rigid free-market formulas, including cutting government spending, privatization and barring protection for national industries. While many critics called for a vote against the bill, others called for continued efforts to modify the bill in the Senate.

Among the bill's strengths and weaknesses:


  • Challenges stereotypical images of Africa as crisis-ridden and chaotic by formally recognizing the continent's economic importance and potential.
  • Acknowledges that debt reduction and development assistance are critical to the success of trade and investment initiatives.
  • Reduces certain barriers to US markets, creating new export opportunities for producers in eligible African nations.
  • Facilitates investment in infrastructure.


  • Requires countries to adopt market-oriented economic policies, similar to those imposed under World Bank structural adjustment programs, in order to take advantage of new initiatives.
  • Provides no additional money for development assistance or debt relief.
  • New programs ill-suited to needs of poorest countries.
  • Measures intended to promote industrial development do not ensure respect for core labor and environmental standards.
  • Lacks mechanism to ensure that poor households derive direct benefit from improved infrastructure.

Bill advances in spite of concerns

Originally introduced in April 1997 by Representatives Phil Crane (R-IL), Jim McDermott (D-WA), and Charles Rangel (D-NY), H.R. 1432 attracted 53 cosponsors in the House and prompted Sen. Richard Lugar (R-IN) to introduce a Senate companion, S. 778.

The legislation would:

  • create a US-Sub-Saharan Africa Trade and Economic Cooperation Forum to bring Cabinet-level officials together annually to discuss economic matters of mutual concern;
  • expand African access to US markets by extending, for a ten year period, import tariff concessions under the Generalized System of Preferences (GSP) and by eliminating US import quotas on textiles manufactured in Sub-Saharan Africa;
  • establish a $150 million equity investment fund and a $500 million infrastructure investment fund for Sub-Saharan Africa under the auspices of the Overseas Private Investment Corporation (OPIC);
  • initiate planning for the creation of a US-Sub-Saharan Africa Free Trade Zone; and
  • create a Deputy Trade Representative for Africa in the office of the US Trade Representative.

Although the overwhelming majority of the bill's cosponsors are Democrats (44 to 9), the measure enjoyed bipartisan support; the Speaker of the House, Rep. Newt Gingrich (R-GA) was among the most prominent proponents of the legislation at hearings early last year. Clinton Administration officials have also testified in favor of the measure.

Last year, the International Relations Committee and the Ways and Means Subcommittee on Trade reviewed, amended, and approved the legislation. On February 25, the full Ways and Means Committee endorsed the legislation, clearing the way for floor action last week. [The full text of the legislation, including committee amendments, is available from]

The debate in the House covered several of the bill's most controversial provisions:

Eligibility requirements - Rep. Maxine Waters (D-CA), chair of the Congressional Black Caucus, unsuccessfully proposed an amendment that would would have permitted the President to waive the eligibility requirements at his discretion.

Development assistance - Proponents emphasized that the eligibility requirements would not apply to development assistance programs, so adoption of the legislation would not cut off aid to any current beneficiaries. However, by a wide margin (81-334) the House also rejected an amendment, proposed by Rep. Maxine Waters (D-CA), that would have imposed a ten-year ban on further cuts in aid to sub-Saharan Africa. [Some critics argued that the bill would also make development assistance funds subject to the new eligibility requirements. However, the bill's requirements extend only to programs authorized by it, which do not include development assistance.]

Textile imports - Several speakers expressed concern that reduced quotas and tariffs on African imports would allow Asian textiles, shipped through African nations, to flood the US market, destroying domestic jobs. Proponents say the bill contains a number of mechanisms--including a 35 percent local content requirement and a stipulation that eligible goods must be "substantially transformed" in Africa--to thwart significant transshipment of Asian textiles.

Although the legislation passed the House easily, it has generated far less enthusiasm in the Senate. To date, only four Senators have cosponsored S. 778. The Finance Committee, which has jurisdiction over the bill, is preoccupied with an investigation of Internal Revenue Service practices. It has not yet scheduled any consideration of the legislation.

Unless the measure attracts more ardent support in the Senate--and a strong proponent in the Finance Committee in particular--its progress will remain slow. Even if the bill is reported out of committee, the Senate's crowded legislative calendar diminishes the potential for final action before the 105th Congress adjourns for the fall election campaign.

White House has similar package

Many of the bill's provisions can be implemented without legislative action, however. In June 1997, President Clinton unveiled the "Partnership for Economic Growth and Opportunity in Africa." This initiative was spelled out in greater detail in the President's third annual "Comprehensive Trade and Development Policy for the Countries of Africa," released in December [The current and previous versions of this document are available at]. Also in December, Rep. Rangel led a group of members of Congress, administration officials, and business people on Presidential Mission to six African nations in order to demonstrate support for the new measures and win backing from African leaders. President Clinton has made U.S. economic engagement with Africa a central theme of his March 22 trip to Senegal, Ghana, Uganda, Rwanda, Botswana, and South Africa.

The main components of the Partnership mirror those of the Africa Growth and Opportunity Act, and the Clinton Administration has already begun to launch certain aspects of the plan. In November, OPIC announced the establishment of a $150 million private equity fund for sub-Saharan Africa. The Office of the US Trade Representative is in the process of hiring a Deputy Trade Representative for Africa.

The Congressional and Executive proposals differ primarily in the eligibility requirements that African nations must meet in order to participate. Whereas access to all of the programs authorized by the Act would be contingent on a country's fulfillment of a single set of criteria, the White House plan envisions three levels of benefits with different eligibility thresholds.

Both Congress and the Clinton Administration want to push African governments to adopt market-oriented economic policies. The White House, however, acknowledges that "not all countries are ready or able to take the steps necessary" to meet all of the criteria contained in the Africa Growth and Opportunity Act. Consequently, the Partnership would make certain benefits--including continued access to GSP tariff concessions and OPIC-established investment funds--available to all sub-Saharan African nations currently eligible to be GSP beneficiaries (e.g., all sub-Saharan nations except Eritrea, Gabon, Liberia, Mauritania, Nigeria, and Sudan).

Countries that "are pursuing aggressive growth-oriented reform programs" would have access to additional benefits, including relaxed US import restrictions on some goods--although not necessarily textiles and apparel, as stipulated in the Act. Level two participants would also be able to take part in the US-Africa Economic Cooperation Forum and could receive technical assistance to facilitate policy reform.

At the third level, the United States would consider negotiating free trade agreements with those nations that combine market-oriented policies with sustained economic growth.

Unlike the legislative package, which explicitly brings the GSP program for sub-Saharan African nations under the Act's more stringent eligibility requirements, the Partnership would not terminate benefits under existing programs for any sub-Saharan countries.

Vital legislation remains plagued by flawed approach

Africa is the only major world region for which the US government has no clear trade strategy. If adopted, the Africa Growth and Opportunity Act would be the first formal US recognition of the significance of African nations as trading partners. Both the Act and the Partnership would help to combat Africa's perennial marginalization in US foreign policy by requiring US government officials to devote systematic attention to US economic relations with nations across the continent. The initiatives have the potential to alter both the scale and the tone of US public and private sector relationships with Africa, dispelling the widely held misconception that Africa is economically irrelevant to the United States and highlighting the continent's successes and opportunities.

The bill has won enthusiastic support from many African government officials and business people. Representatives of African grassroots, church, and labor groups have had fewer opportunities to comment on the initiatives, and their assessments have been more skeptical (see, for example, the documents previously distributed by APIC at and

They point out that, in its present form, H.R. 1432 may produce few concrete improvements in the living standards of ordinary people, either in Africa or the United States. H.R. 1432 has been portrayed as a strategy for stimulating African development through the expansion of market opportunities in the United States. However, it is at least as much about opening African economies to investment by and imports from the United States. According to Tetteh Hormeku of Ghana's Third World Network, the United States is eager not to be crowded out of African economies by preferential trade and investment agreements negotiated among neighboring states or between African nations and European powers.

Consequently, the Act aims to push African governments to adopt market-oriented economic policies, such as the privatization of state industries, the elimination of tariff and nontariff barriers to trade, and the reduction of business and commercial taxes and regulations. The desired policy changes are spelled out in detail in the eligibility requirements the Act would impose on would-be participants.

Relying on markets and the private sector as the primary engine of development presents at least two major problems. First, unregulated markets do a poor job of reducing poverty and promoting even development. Wealthy individuals, companies, and nations typically enjoy an advantage in free markets. Second, market deregulation diminishes the scope for governments to use economic mechanisms to achieve public policy goals. While certain checks on government economic intervention may be desirable, the relentless pursuit of free markets jeopardizes the capacity of Africa's emerging democratic institutions to realize any popularly-defined development agenda. To have economic policies prescribed by a foreign power as a precondition of access to vital development resources is a further affront to accountable government and national sovereignty.

Is trade replacing aid?

Preliminary proposals circulated prior to the introduction of H.R. 1432 saw expanded trade as a substitute for development assistance. Rep. Rangel and Africa advocacy organizations argued that increased trade would not automatically benefit Africans. Not only are trade patterns important--increasing unprocessed mineral exports, for example, is far less likely to produce sustainable economic growth than would the expansion and diversification of industrial production--but trade enhancement programs must also be linked to effective poverty reduction, social investment, debt eradication initiatives, and accountable government if they are to achieve long-term success.

As introduced, H.R. 1432 appeared to go some way towards addressing these concerns. It expressed Congress' desire to support governments committed to the eradication of poverty, the recognition of the importance of women to economic growth and development process, and the establishment of accountable government. Sections of the bill acknowledge the importance of foreign aid and debt relief. It calls for continued funding of development assistance as well as for deep and rapid debt relief under the Heavily Indebted Poor Countries (HIPC) initiative of the World Bank.

However, the legislation does not advance these objectives in any concrete way. It does not appropriate additional resources for development assistance, nor does it constitute a binding commitment to future funding of aid and debt relief programs. In an era when Congress slashes the already small US foreign assistance account on an annual basis, such rhetorical endorsements have little meaning.

Proponents of the bill point out that there must be limits to the scope of any single piece of legislation. However, a press release issued on February 25 by Rep. Crane, H.R. 1432's primary sponsor, reveals that this is not merely a strategic omission. "This is the first step in replacing aid with trade," the statement declared in response to the Ways and Means Committee's approval of H.R. 1432.

Human rights, workers' rights

The original version of H.R. 1432 used strictly economic criteria to assess a country's eligibility to participate in the bill's programs. During the committee process, a number of amendments were made to the eligibility requirements, including the addition of two clauses intended to promote recognition and respect for human rights. Countries that engage in gross violations of internationally recognized human rights or fail to provide equal protection under the law and rights to due process and a fair trial would now be excluded from participation.

The bill's textile provisions have generated some of the most heated controversy. The legislation would repeal the current limits on textile and apparel imports from Kenya and Mauritius and would enforce a "no quota" policy on similar imports from other eligible sub-Saharan nations for the duration of the current international Agreement on Textiles and Clothing. A recent study conducted by the US International Trade Commission ( concluded that the this action would have no significant affect on the domestic textile industry. But US labor unions warn that if manufacturers in these countries are not required to adhere to basic labor and environmental standards, US companies might relocate plants to Africa in search of lower production costs and higher profits. The result, they say, would be loss of jobs in the United States, extreme exploitation of African workers--particularly women, and environmental damage. Labor groups have urged that quota reductions and any future free trade agreements be contingent on the recognition of fundamental workers' rights and environmental protections.

Some critics have also expressed concern that manufacturers in other parts of the world might transship textiles through Africa in order to obtain tariff concessions on sales to the US. The Ways and Means Committee adopted an amendment to H.R. 1432 intended to strengthen the anti-transshipment language already in the bill.

Any further effort to address the objectionable aspects of the legislation must occur in the Senate. The President's trip to Africa could provide an opportunity for administration officials to consult with a much more representative range of Africans--including leaders of church, labor, and grassroots organizations--and to solicit additional comments which could help to inform the Senate debate.

[For additional US commentary on the Africa Growth and Opportunity Act, see the US-Africa Trade Policy Working Group's letter to Congress at and the collection of documents available at For further background material on US-Africa economic relations, see the Africa News archive at]

This material is produced and distributed by the Africa Policy Information Center (APIC), the educational affiliate of the Washington Office on Africa. APIC's primary objective is to widen the policy debate in the United States around African issues and the U.S. role in Africa, by providing accessible policy-relevant information and analysis usable by a wide range of groups individuals.

URL for this file: