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USA: Africa Trade Bill, 2
USA: Africa Trade Bill, 2
Date distributed: 980317
Issue Areas: +economy/development+ +US policy focus+
This posting contains selected excerpts from the text of the African Growth
and Opportunity Act (H.R. 1432), as adopted by the U.S. House of Representatives,
together with a portion of comments by Rep. Maxine Waters in presenting
an amendment to the bill. The full texts can be found on line at http://thomas.loc.gov.
The previous posting contains a summary analysis of provisions of the bill
and the debate around it.
105th CONGRESS, 2d Session, H. R. 1432
SEC. 2. FINDINGS.
The Congress finds that it is in the mutual economic interest of the
United States and sub-Saharan Africa to promote stable and sustainable
economic growth and development in sub-Saharan Africa. To that end, the
United States seeks to facilitate market-led economic growth in, and thereby
the social and economic development of, the countries of sub-Saharan Africa.
In particular, the United States seeks to assist sub-Saharan African countries,
and the private sector in those countries, to achieve economic self-reliance
(1) strengthening and expanding the private sector in sub-Saharan Africa,
especially women-owned businesses; (2) encouraging increased trade and
investment between the United States and sub-Saharan Africa;
(3) reducing tariff and nontariff barriers and other trade obstacles;
(4) expanding United States assistance to sub-Saharan Africa's regional
(5) negotiating free trade areas;
(6) establishing a United States-Sub-Saharan Africa Trade and Investment
(7) focusing on countries committed to accountable government, economic
reform, and the eradication of poverty; (8) establishing a United States-Sub-Saharan
Africa Economic Cooperation Forum; and
(9) continuing to support development assistance for those countries in
sub-Saharan Africa attempting to build civil societies.
SEC. 3. STATEMENT OF POLICY.
The Congress supports economic self-reliance for sub-Saharan African
countries, particularly those committed to--
(1) economic and political reform;
(2) market incentives and private sector growth; (3) the eradication of
(4) the importance of women to economic growth and development.
SEC. 4. ELIGIBILITY REQUIREMENTS.
(a) IN GENERAL- A sub-Saharan African country shall be eligible to participate
in programs, projects, or activities, or receive assistance or other benefits
under this Act if the President determines that the country does not engage
in gross violations of internationally recognized human rights and has
established, or is making continual progress toward establishing, a market-based
economy, such as the establishment and enforcement of appropriate policies
(1) promoting free movement of goods and services between the United States
and sub-Saharan Africa and among countries in sub-Saharan Africa;
(2) promoting the expansion of the production base and the transformation
of commodities and nontraditional products for exports through joint venture
projects between African and foreign investors;
(3) trade issues, such as protection of intellectual property rights, improvements
in standards, testing, labeling and certification, and government procurement;
(4) the protection of property rights, such as protection against expropriation
and a functioning and fair judicial system;
(5) appropriate fiscal systems, such as reducing high import and corporate
taxes, controlling government consumption, participation in bilateral investment
treaties, and the harmonization of such treaties to avoid double taxation;
(6) foreign investment issues, such as the provision of national treatment
for foreign investors and other measures to create an environment conducive
to domestic and foreign investment;
(7) supporting the growth of regional markets within a free trade area
(8) governance issues, such as eliminating government corruption, minimizing
government intervention in the market such as price controls and subsidies,
and streamlining the business license process;
(9) supporting the growth of the private sector, in particular by promoting
the emergence of a new generation of African entrepreneurs;
(10) encouraging the private ownership of government-controlled economic
enterprises through divestiture programs;
(11) removing restrictions on investment; and (12) observing the rule of
law, including equal protection under the law and the right to due process
and a fair trial.
(b) ADDITIONAL FACTORS- In determining whether a sub-Saharan African
country is eligible under subsection (a), the President shall take into
account the following factors:
(1) An expression by such country of its desire to be an eligible country
under subsection (a).
(2) The extent to which such country has made substantial progress toward--
(A) reducing tariff levels;
(B) binding its tariffs in the World Trade Organization and assuming meaningful
binding obligations in other sectors of trade; and
(C) eliminating nontariff barriers to trade.
(3) Whether such country, if not already a member of the World Trade
Organization, is actively pursuing membership in that Organization.
(4) Where applicable, the extent to which such country is in material
compliance with its obligations to the International Monetary Fund and
other international financial institutions.
(5) The extent to which such country has a recognizable commitment to
reducing poverty, increasing the availability of health care and educational
opportunities, the expansion of physical infrastructure in a manner designed
to maximize accessibility, increased access to market and credit facilities
for small farmers and producers, and improved economic opportunities for
women as entrepreneurs and employees, and promoting and enabling the formation
of capital to support the establishment and operation of micro-enterprises.
(6) Whether or not such country is cooperating with the United States
in efforts to eliminate slavery in Africa.
(7) Whether or not such country engages in activities that undermine
United States national security or foreign policy interests.
(d) VIOLATIONS OF HUMAN RIGHTS AND INELIGIBLE COUNTRIES- It is the sense
of the Congress that a sub-Saharan African country should not be eligible
to participate in programs, projects, or activities, or receive assistance
or other benefits under this Act if the government of that country is determined
by the President to engage in a consistent pattern of gross violations
of internationally recognized human rights.
SEC. 5. ADDITIONAL AUTHORITIES AND INCREASED FLEXIBILITY TO PROVIDE
ASSISTANCE UNDER THE DEVELOPMENT FUND FOR AFRICA.
(a) USE OF SUSTAINABLE DEVELOPMENT ASSISTANCE TO SUPPORT FURTHER ECONOMIC
GROWTH- It is the sense of the Congress that sustained economic growth
in sub-Saharan Africa depends in large measure upon the development of
a receptive environment for trade and investment, and that to achieve this
objective the United States Agency for International Development should
continue to support programs which help to create this environment. Investments
in human resources, development, and implementation of free market policies,
including policies to liberalize agricultural markets and improve food
security, and the support for the rule of law and democratic governance
should continue to be encouraged and enhanced on a bilateral and regional
(4) The African Development Foundation has a unique congressional mandate
to empower the poor to participate fully in development and to increase
opportunities for gainful employment, poverty alleviation, and more equitable
income distribution in sub-Saharan Africa. The African Development Foundation
has worked successfully to enhance the role of women as agents of change,
strengthen the informal sector with an emphasis on supporting micro and
small sized enterprises, indigenous technologies, and mobilizing local
financing. The African Development Foundation should develop and implement
strategies for promoting participation in the socioeconomic development
process of grassroots and informal sector groups such as nongovernmental
organizations, cooperatives, artisans, and traders into the programs and
initiatives established under this Act.
SEC. 7. UNITED STATES-SUB-SAHARAN AFRICA FREE TRADE AREA.
(1) IN GENERAL- The President, taking into account the provisions of
the treaty establishing the African Economic Community and the willingness
of the governments of sub-Saharan African countries to engage in negotiations
to enter into free trade agreements, shall develop a plan for the purpose
of entering into one or more trade agreements with sub-Saharan African
countries eligible under section 4 in order to establish a United States-Sub-Saharan
Africa Free Trade Area (hereafter in this section referred to as the `Free
SEC. 8. ELIMINATING TRADE BARRIERS AND ENCOURAGING EXPORTS.
(a) FINDINGS- The Congress makes the following findings:
(1) The lack of competitiveness of sub-Saharan Africa in the global
market, especially in the manufacturing sector, make it a limited threat
to market disruption and no threat to United States jobs.
(2) Annual textile and apparel exports to the United States from sub-Saharan
Africa represent less than 1 percent of all textile and apparel exports
to the United States, which totaled $45,932,000,000 in 1996.
(3) Sub-Saharan Africa has limited textile manufacturing capacity. During
1998 and the succeeding 4 years, this limited capacity to manufacture textiles
and apparel is projected to grow at a modest rate. Given this limited capacity
to export textiles and apparel, it will be very difficult for these exports
from sub-Saharan Africa, during 1998 and the succeeding 9 years, to exceed
3 percent annually of total imports of textile and apparel to the United
States. If these exports from sub-Saharan Africa remain around 3 percent
of total imports, they will not represent a threat to United States workers,
consumers, or manufacturers.
(c) TREATMENT OF QUOTAS-
(1) KENYA AND MAURITIUS- Pursuant to the Agreement on Textiles and Clothing,
the United States shall eliminate the existing quotas on textile and apparel
exports to the United States-- (A) from Kenya within 30 days after that
country adopts an efficient visa system to guard against unlawful transshipment
of textile and apparel goods and the use of counterfeit documents; and
(B) from Mauritius within 30 days after that country adopts such a visa
(2) OTHER SUB-SAHARAN COUNTRIES- The President shall continue the existing
no quota policy for countries in sub-Saharan Africa. The President shall
submit to the Congress, not later than March 31 of each year, a report
on the growth in textiles and apparel exports to the United States from
countries in sub-Saharan Africa in order to protect United States consumers,
workers, and textile manufacturers from economic injury on account of the
no quota policy.
(d) CUSTOMS PROCEDURES AND ENFORCEMENT-
(1) ACTIONS BY COUNTRIES AGAINST TRANSSHIPMENT AND CIRCUMVENTION- The
President should ensure that any country in sub-Saharan Africa that intends
to export textile and apparel goods to the United States--
(A) has in place a functioning and effective visa system and domestic laws
and enforcement procedures to guard against unlawful transshipment of textile
and apparel goods and the use of counterfeit documents; and
SEC. 10. INTERNATIONAL FINANCIAL INSTITUTIONS AND DEBT REDUCTION.
(a) BETTER MECHANISMS TO FURTHER GOALS FOR SUB-SAHARAN AFRICAIt is the
sense of the Congress that the Secretary of the Treasury should instruct
the United States Executive Directors of the International Bank for Reconstruction
and Development, the International Monetary Fund, and the African Development
Bank to use the voice and votes of the Executive Directors to encourage
vigorously their respective institutions to develop enhanced mechanisms
which further the following goals in eligible countries in sub-Saharan
(4) Supporting deep debt reduction at the earliest possible date with
the greatest amount of relief for eligible poorest countries under the
`Heavily Indebted Poor Countries' (HIPC) debt initiative.
(b) SENSE OF CONGRESS- It is the sense of the Congress that relief provided
to countries in sub-Saharan Africa which qualify for the Heavily Indebted
Poor Countries debt initiative should primarily be made through grants
rather than through extended-term debt, and that interim relief or interim
financing should be provided for eligible countries that establish a strong
record of macroeconomic reform. ...
SEC. 11. SUB-SAHARAN AFRICA EQUITY AND INFRASTRUCTURE FUNDS.
(A) EQUITY FUND FOR SUB-SAHARAN AFRICA- One of the funds should be an
equity fund, with assets of up to $150,000,000, the primary purpose of
which is to achieve long-term capital appreciation through equity investments
in support of projects in countries in sub-Saharan Africa.
(B) INFRASTRUCTURE FUND- One or more of the funds, with combined assets
of up to $500,000,000, should be used in support of infrastructure projects
in countries of sub-Saharan Africa. The primary purpose of any such fund
would be to achieve long-term capital appreciation through investing in
financing for infrastructure projects in sub-Saharan Africa, including
for the expansion of businesses in sub-Saharan Africa, restructurings,
management buyouts and buyins, businesses with local ownership, and privatizations.
(4) EMPHASIS- The Corporation shall ensure that the funds are used to
provide support in particular to women entrepreneurs and to innovative
investments that expand opportunities for women and maximize employment
opportunities for poor individuals.
Amendment No. 2 offered by Ms. [Maxine] Waters:
In subsection (a) of section 4 (Eligibility Requirements), insert after
paragraph (12) the following: A country need not meet all the requirements
set forth in paragraphs (1) through (12) in order to be eligible under
I take this opportunity to say that I am deeply respectful of all who
have spoken on the bill. I am deeply respectful of the proponents and the
opponents of the Africa Growth and Opportunity Act. It is incumbent upon
those of us who have identified concerns with this bill to not only try
to make it a better bill, but to acknowledge that none of us are right
on this bill.
Some of us have advanced this bill as the best thing that could ever
happen for Africa. While I wish that was true, it is not necessarily true.
And for others, who have condemned this as the worst thing that could have
ever happened, that is not true either.
What we have, I think, is an attempt by those of us who care about Africa
to try to advance something that will lead us to a trade agreement.
I think all of the Members of this House who are involved in this legislation
would like to get to the point where we can do a good trade bill. We differ
on what the guiding policy should be to get to that point. Some Members
think that everything in this bill is good and should be embraced. I am
one who believes that there are some things in the bill that are unnecessary,
that may be harmful and need to be dealt with. I take this opportunity
to try to deal with some of this in amendments.
My first amendment is a very simple amendment that says, no country
would be forced to have to comply with all of the requirements of this
bill. This underscores the flexibility of the President to take a look
at countries and make some determination about whether or not they are
in compliance with some things, ... whether or not they are, in fact, acting
in good faith despite the fact they do not meet all of the strict requirements.
When I talked with the proponents of this bill, they said to me, that was
the intent of the bill. I said to them, that was not clear. As I looked
at the laundry list, I became concerned. I pointed out some of my concerns.
For example, if we take a look at page 40 of the legislation, line 20,
item 5, it says, appropriate fiscal systems such as reducing high import
and corporate taxes, controlling government consumption, participation
in bilateral investment treaties and the harmonization of such treaties
to avoid double taxation.
I would have struck that from the bill if I had had my way. I attempted
to do that. That amendment was not accepted. However, this amendment would
at least give the President the opportunity to evaluate whether or not
a country is moving in that direction, ... as we look as things such as
controlling government consumption.
What does that mean? For some Members, they would spend less money on
education and health. For some Members, that would mean we would spend
less money on the infrastructure. For some Members, that would mean something
quite different than what I would be concerned about.
I think that we need some flexibility to review these kinds of things
So I would ask that my colleagues support the idea that this bill that
we have before us today is the framework, it is the guidepost, it is the
direction leading toward an agreement with Africa on trade. We want to
be as fair as we can possibly be. We do not want to be overly harsh. We
do not want to be overly punitive. We do not want to do anything that will
interfere with their ability to really get involved with trade in ways
that will benefit them and their people.
[This amendment was defeated 334 to 81. All members of the Congressional
Black Caucus voted for the amendment.]
This material is being reposted for wider distribution by the Africa
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Office on Africa. APIC's primary objective is to widen the policy debate
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