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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 Please note that many outdated links in this archived document may not work.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, 2

USA: Africa Trade Bill, 2
Date distributed: 980317
APIC Document

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

Region: Continent-Wide
Issue Areas: +economy/development+ +US policy focus+
Summary Contents:
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 The previous posting contains a summary analysis of provisions of the bill and the debate around it.

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

105th CONGRESS, 2d Session, H. R. 1432


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 by--

(1) strengthening and expanding the private sector in sub-Saharan Africa, especially women-owned businesses; (2) encouraging increased trade and investment between the United States and sub-Saharan Africa;
(3) reducing tariff and nontariff barriers and other trade obstacles;
(4) expanding United States assistance to sub-Saharan Africa's regional integration efforts;
(5) negotiating free trade areas;
(6) establishing a United States-Sub-Saharan Africa Trade and Investment Partnership;
(7) focusing on countries committed to accountable government, economic reform, and the eradication of poverty; (8) establishing a United States-Sub-Saharan Africa Economic Cooperation Forum; and
(9) continuing to support development assistance for those countries in sub-Saharan Africa attempting to build civil societies.


The Congress supports economic self-reliance for sub-Saharan African countries, particularly those committed to--

(1) economic and political reform;
(2) market incentives and private sector growth; (3) the eradication of poverty; and
(4) the importance of women to economic growth and development.


(a) IN GENERAL- A sub-Saharan African country shall be eligible to participate in programs, projects, or activities, or receive assistance or other benefits under this Act if the President determines that the country does not engage in gross violations of internationally recognized human rights and has established, or is making continual progress toward establishing, a market-based economy, such as the establishment and enforcement of appropriate policies relating to--
(1) promoting free movement of goods and services between the United States and sub-Saharan Africa and among countries in sub-Saharan Africa;
(2) promoting the expansion of the production base and the transformation of commodities and nontraditional products for exports through joint venture projects between African and foreign investors;
(3) trade issues, such as protection of intellectual property rights, improvements in standards, testing, labeling and certification, and government procurement;
(4) the protection of property rights, such as protection against expropriation and a functioning and fair judicial system;
(5) 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 framework;
(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.


(a) USE OF SUSTAINABLE DEVELOPMENT ASSISTANCE TO SUPPORT FURTHER ECONOMIC GROWTH- It is the sense of the Congress that sustained economic growth in sub-Saharan Africa depends in large measure upon the development of a receptive environment for trade and investment, and that to achieve this objective the United States Agency for International Development should continue to support programs which help to create this environment. Investments in human resources, development, and implementation of free market policies, including policies to liberalize agricultural markets and improve food security, and the support for the rule of law and democratic governance should continue to be encouraged and enhanced on a bilateral and regional basis.


(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.



(1) IN GENERAL- The President, taking into account the provisions of the treaty establishing the African Economic Community and the willingness of the governments of sub-Saharan African countries to engage in negotiations to enter into free trade agreements, shall develop a plan for the purpose of entering into one or more trade agreements with sub-Saharan African countries eligible under section 4 in order to establish a United States-Sub-Saharan Africa Free Trade Area (hereafter in this section referred to as the `Free Trade Area').


(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.



(1) KENYA AND MAURITIUS- Pursuant to the Agreement on Textiles and Clothing, the United States shall eliminate the existing quotas on textile and apparel exports to the United States-- (A) from Kenya within 30 days after that country adopts an efficient visa system to guard against unlawful transshipment of textile and apparel goods and the use of counterfeit documents; and
(B) from Mauritius within 30 days after that country adopts such a visa system.


(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.


(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



(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 Africa: ...

(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. ...


(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 this subsection.

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 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 concentrating on providing accessible policy-relevant information and analysis usable by a wide range of groups individuals.

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