[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
  U.S.-AFRICA TRADE RELATIONS: CREATING A PLATFORM FOR ECONOMIC GROWTH

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON COMMERCE, TRADE,
                        AND CONSUMER PROTECTION

                                 OF THE

                          COMMITTEE ON ENERGY 
                              AND COMMERCE

                                AND THE

                         SUBCOMMITTEE ON AFRICA
                           AND GLOBAL HEALTH

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 24, 2009

                               __________

                           Serial No. 111-55

                   (Committee on Energy and Commerce)

                           Serial No. 111-79

                     (Committee on Foreign Affairs)

                               __________

  Printed for the use of the Committee on Energy and Commerce and the 
                      Committee on Foreign Affairs


   Available via the World Wide Web: http://energycommerce.house.gov 
                and http://www.foreignaffairs.house.gov



                  U.S. GOVERNMENT PRINTING OFFICE
66-816                    WASHINGTON : 2011
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  


                    COMMITTEE ON ENERGY AND COMMERCE

                 HENRY A. WAXMAN, California, Chairman

JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MIKE F. DOYLE, Pennsylvania          GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
JAN SCHAKOWSKY, Illinois             MIKE ROGERS, Michigan
HILDA L. SOLIS, California           SUE WILKINS MYRICK, North Carolina
CHARLES A. GONZALEZ, Texas           JOHN SULLIVAN, Oklahoma
JAY INSLEE, Washington               TIM MURPHY, Pennsylvania
TAMMY BALDWIN, Wisconsin             MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas                  MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          PHIL GINGREY, Georgia
JIM MATHESON, Utah                   STEVE SCALISE, Louisiana
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA CHRISTENSEN, Virgin Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont

                                  (ii)
        Subcommittee on Commerce, Trade, and Consumer Protection

                        BOBBY L. RUSH, Illinois
                                 Chairman
JANICE D. SCHAKOWSKY, Illinois       CLIFF STEARNS, Florida
JOHN P. SARBANES, Maryland              Ranking Member
BETTY SUTTON, Ohio                   RALPH M. HALL, Texas
FRANK PALLONE, Jr., New Jersey       J. DENNIS HASTERT, Illinois
BART GORDON, Tennessee               ED WHITFIELD, Kentucky
BART STUPAK, Michigan                CHARLES W. ``CHIP'' PICKERING, 
GENE GREEN, Texas                        Mississippi
CHARLES A. GONZALEZ, Texas           GEORGE RADANOVICH, California
ANTHONY D. WEINER, New York          JOSEPH R. PITTS, Pennsylvania
JIM MATHESON, Utah                   MARY BONO MACK, California
G.K. BUTTERFIELD, North Carolina     LEE TERRY, Nebraska
JOHN BARROW, Georgia                 MIKE ROGERS, Michigan
DORIS O. MATSUI, California          SUE WILKINS MYRICK, North Carolina
KATHY CASTOR, Florida                MICHAEL C. BURGESS, Texas
ZACHARY T. SPACE, Ohio
BRUCE L. BRALEY, Iowa
DIANA DeGETTE, Colorado
JOHN D. DINGELL, Michigan (ex 
    officio)
                                 ------                                

                      COMMITTEE ON FOREIGN AFFAIRS

                 HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York           ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American      CHRISTOPHER H. SMITH, New Jersey
    Samoa                            DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey          ELTON GALLEGLY, California
BRAD SHERMAN, California             DANA ROHRABACHER, California
ROBERT WEXLER, Florida               DONALD A. MANZULLO, Illinois
ELIOT L. ENGEL, New York             EDWARD R. ROYCE, California
BILL DELAHUNT, Massachusetts         RON PAUL, Texas
GREGORY W. MEEKS, New York           JEFF FLAKE, Arizona
DIANE E. WATSON, California          MIKE PENCE, Indiana
RUSS CARNAHAN, Missouri              JOE WILSON, South Carolina
ALBIO SIRES, New Jersey              JOHN BOOZMAN, Arkansas
GERALD E. CONNOLLY, Virginia         J. GRESHAM BARRETT, South Carolina
MICHAEL E. McMAHON, New York         CONNIE MACK, Florida
JOHN S. TANNER, Tennessee            JEFF FORTENBERRY, Nebraska
GENE GREEN, Texas                    MICHAEL T. McCAUL, Texas
LYNN WOOLSEY, California             TED POE, Texas
SHEILA JACKSON LEE, Texas            BOB INGLIS, South Carolina
BARBARA LEE, California              GUS BILIRAKIS, Florida
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida

                Subcommittee on Africa and Global Health

                 DONALD M. PAYNE, New Jersey, Chairman
DIANE E. WATSON, California          CHRISTOPHER H. SMITH, New Jersey
BARBARA LEE, California              JEFF FLAKE, Arizona
BRAD MILLER, North Carolina          JOHN BOOZMAN, Arkansas
GREGORY W. MEEKS, New York           JEFF FORTENBERRY, Nebraska
SHEILA JACKSON LEE, Texas
LYNN WOOLSEY, California
  


                             C O N T E N T S

                              ----------                              
                                                                   Page

                               Witnesses

Florizelle Liser, Assistant U.S. Trade Representative of Africa, 
  Executive Office of the President, Office of the United States 
  Trade Representative...........................................     2
    Prepared statement...........................................     4
    Answers to submitted questions \1\...........................
Leocadia Zak, Acting Director, U.S. Trade and Development Agency.    10
    Prepared statement...........................................    13
    Answers to submitted questions...............................   160
Holly Vineyard, Deputy Assistant Secretary for Africa, Middle 
  East, and South Asia, International Trade Administration.......    18
    Prepared statement...........................................    20
    Answers to submitted questions \2\...........................
Stephen Hayes, President and CEO, The Corporate Counsel on Africa    41
    Prepared statement...........................................    43
    Answers to submitted questions \3\...........................
Greg Lebedev, Senior Advisor to the President, U.S. Chamber of 
  Commerce, Chairman, Center for International Private Enterprise    49
    Prepared statement...........................................    52
    Answers to submitted questions \4\...........................
Lisa D. Cook, Assistant Professor, James Madison College, 
  Department of Economics, Michigan State University.............    59
    Prepared statement...........................................    61
Karen Tandy, Senior Vice President, Public Affairs and 
  Communications, Motorola, Inc..................................    64
    Prepared statement...........................................    66

                           Submitted Material

``A Conversation Behind Closed Doors,'' publication of May 2009 
  by Africa Business Initiative, U.S. Department of Commerce.....    84
``The United States and Africa,'' publication of March 4, 2009 by 
  The Corporate Council on Africa................................   100

----------
\1\ Ms. Liser did not respond to submitted questions for the 
  record.
\2\ Ms. Vineyard did not respond to submitted questions for the 
  record.
\3\ Mr. Hayes did not respond to submitted questions for the 
  record.
\4\ Mr. Lebedev did not respond to submitted questions for the 
  record.


  U.S.-AFRICA TRADE RELATIONS: CREATING A PLATFORM FOR ECONOMIC GROWTH

                              ----------                              


                        WEDNESDAY, JUNE 24, 2009

            House of Representatives,      
           Subcommittee on Commerce, Trade,
                           and Consumer Protection,
                          Committee on Energy and Commerce,
          joint with Subcommittee on Africa
                                  and Global Health
                               Committee on Foreign Affairs
                                                    Washington, DC.
    The subcommittees met, pursuant to call, at 3:35 p.m., in 
room 2322 of the Rayburn House Office Building, Hon. Bobby Rush 
(chairman of the Subcommittee on Commerce, Trade, and Consumer 
Protection) presiding.
    Present from the Subcommittee on Africa and Global Health: 
Representatives Payne, Woolsey, Watson, Lee, and Smith.
    Present from the Subcommittee on Commerce, Trade, and 
Consumer Protection: Representatives Rush and Radanovich.
    Mr. Payne [presiding]. We will bring this delayed hearing 
to order. This is a hearing of the Subcommittee on Africa and 
Global Health and the Subcommittee on Commerce, Trade, and 
Consumer Protection. Chairman Rush, hopefully, will be here 
soon. Our votes have just ended temporarily. This is abnormal, 
but for the last several days, there have been political 
procedural votes being done by the opposition. And its 
purpose--to delay and disrupt the workings of the House. So I 
apologize. It is something beyond our control. A member can 
call for a vote to adjourn any time they want to, and that is 
what has been happening.
    So, at this time, I will not make any opening statement. We 
will move right to the first panel, panel one. We have our 
Assistant U.S. Trade Representative for Africa, Ms. Liser; our 
acting Director of the U.S. Trade and Development Agency, Ms. 
Zak; and the Deputy Assistant Secretary, Africa, Middle East, 
and South Asia, International Trade Administration, Ms. 
Vineyard.
    We will begin. I won't take time to read the background. 
Normally we do that in our committee, but because of the time, 
we will go right into witness testimony and begin with Ms. 
Liser. If you would start, we would be pleased. Thank you.

     STATEMENTS OF FLORIZELLE LISER, ASSISTANT U.S. TRADE 
 REPRESENTATIVE FOR AFRICA, EXECUTIVE OFFICE OF THE PRESIDENT, 
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE; LEOCADIA ZAK, 
 ACTING DIRECTOR, U.S. TRADE AND DEVELOPMENT AGENCY; AND HOLLY 
 VINEYARD, DEPUTY ASSISTANT SECRETARY FOR AFRICA, MIDDLE EAST, 
       AND SOUTH ASIA, INTERNATIONAL TRADE ADMINISTRATION

                 STATEMENT OF FLORIZELLE LISER

    Ms. Liser. Chairman Payne, thanks to you and to Chairman 
Rush and the other members for holding this hearing. I am 
pleased to be here to appear before you on U.S.-African trade 
relations and to share some successes and challenges we face in 
promoting African economic growth through expanded trade and 
investment.
    President Obama and U.S. trade representative Ron Kirk are 
committed to a new approach on trade. So, we are seeking ways 
to sharpen U.S. trade policy and to shore up the foundations of 
global trade today. Strengthening the rules-based system will 
boost trade and promote development for the long term for 
America, for Africa, and the world. That is why President Obama 
and Ambassador Kirk are committed to a successful conclusion of 
the World Trade Organization's Doha Round, an outcome that is 
ambitious and opens new markets for all, including for 
Africans.
    We are also looking at our trade-preference programs, 
including the African Growth and Opportunity Act with an aim to 
make them more effective and to ensure that the developing 
countries that need them the most are the beneficiaries. 
Africa's share of global trade is declining. Sub-Saharan 
Africa's share of global trade is less than 2 percent, down 
from 6 percent in 1980. If that share were to increase by just 
one percentage point to 3 percent, it would generate additional 
export revenues of $70 billion annually, which is nearly three 
times the amount of annual assistance to Africa from all 
donors.
    Also, exports from the continent are concentrated in 
primary commodities, such as petroleum, minerals, cocoa, and 
coffee. There is little of the manufacturing engine in Sub-
Saharan Africa that has fueled economic growth and reduced 
poverty in other regions of the world.
    Even in agriculture, which many see as Africa's strong 
suit, the recent trend lines have not been positive. In 2005, 
the region switched from being a net exporter to a net importer 
of agricultural products.
    We believe that export diversification and further 
processing of agricultural products into higher value exports 
could help improve food security in the region by addressing 
issues of availability and stability of food supply.
    But, even with that bad news, U.S. trade with Africa is 
expanding and diversifying. AGOA is an important tool that has 
helped increase both the volume and diversity of U.S. trade 
with Sub-Saharan Africa. And U.S. imports under AGOA total 
$66.3 billion in 2008, more than eight times the amount in 
2001. Now, while much of the increase is attributable to oil, 
non-oil AGOA imports more than tripled to $5.1 billion and a 
number of AGOA product sectors experienced sizable increases 
during this period, including, for example, beverages, 
vegetables, cut flowers, certain footwear, textiles, and 
apparel.
    Though African textiles and apparel producers have faced 
increased competition and a declining share in the U.S. market, 
textiles and apparel still accounted for 22 percent of all AGOA 
non-oil trade in 2008. So, it is still an important sector.
    We are trying to address the challenges. We know that 
market access alone is insufficient to increase U.S.-Africa 
trade. That is why AGOA and trade capacity building assistance 
are the twin pillars of U.S.-Africa trade policy. In 2008, the 
U.S. devoted over $1 billion to trade-capacity building in Sub-
Saharan Africa, and the five-year $200 million presidential 
initiative called the African Global Competitiveness Initiative 
is helping to expand African trade and investment with the U.S. 
and support African regional strategies to grow Africa's share 
of world trade.
    Dialogue with Africa about key trade and investment issues 
remains important, and we wanted to share with you that the 
eighth AGOA forum will be held in Kenya on August 4 to 6, 2009. 
Its theme is realizing the full potential of AGOA through 
expansion of trade and investment. As always, the forum will be 
an important opportunity to discuss the challenges in expanding 
U.S.-Africa trade and investment relations. We look forward to 
the participation of members of Congress and their staff and 
the forum.
    In conclusion, through ongoing dialogue and a range of 
initiatives, the Administration is looking forward to working 
with Congress to strengthen U.S.-Africa trade relations and 
through trade to create a platform for economic growth in 
Africa. Thank you.
    [The prepared statement of Ms. Liser follows:]

    [GRAPHIC] [TIFF OMITTED] T6816.001
    
    [GRAPHIC] [TIFF OMITTED] T6816.002
    
    [GRAPHIC] [TIFF OMITTED] T6816.003
    
    [GRAPHIC] [TIFF OMITTED] T6816.004
    
    [GRAPHIC] [TIFF OMITTED] T6816.005
    
    [GRAPHIC] [TIFF OMITTED] T6816.006
    
    Mr. Payne. Thank you. The co-chair of the Commerce 
Committee that is really having jurisdiction over this has 
come. We--since folks were here for an hour and a half, we 
tried to get moving, but I will turn over the meeting to 
Representative Rush, and there may be procedural things that 
you do with the Commerce Committee that you don't do in Foreign 
Affairs.
    Mr. Rush. Thank you. Well, I think the protocol is pretty 
much on the sidelines, Chairman Payne. I just want to add my 
voice of apology to everybody who is here. This is the 
beginning of a new way that we are going to be operating around 
here, I think, for the foreseeable future. And it is dilatory, 
and I don't think that it is beneficial to the institution nor 
to the American people. But we have to do what we have to do, 
so, when they call a vote, we have to respond. Please accept my 
sincere apologies and the apologies of the Subcommittee on 
Commerce, Trade, and Consumer Protection.
    I know how valuable your time is, and we want to again 
welcome you and thank you for coming and thank you for 
participating. I will proceed now recognizing the next witness, 
Ms. Leocadia Zak, who is the acting director of the U.S. Trade 
and Development Agency. And I think that the guidelines of the 
opening statement is 2-and-a-half minutes or--5 minutes or 
thereabouts, OK. Ms. Zak, you are recognized.

                   STATEMENT OF LEOCADIA ZAK

    Ms. Zak. Thank you very much, Chairman Payne, Chairman 
Rush. Thank you and the other members of the subcommittee for 
this opportunity to testify today about the U.S. Trade and 
Development Agency's role in advancing economic development in 
Africa and creating jobs here in the U.S. as well.
    I welcome the committee's interest in USTDA's program and 
look forward to briefly outlining our programs and some 
important successes.
    I know that you have emphasized the exploration of new 
markets as a vital element for stimulating the U.S. economy. I 
could not agree more, and I also agree that African development 
and trade priorities are something that we must focus on. This 
is also precisely the mission of USTDA, to promote development 
in emerging markets while creating opportunities for U.S. 
exports and the creation of U.S. jobs.
    How do we do this? In particular, we focus on areas where 
U.S. business is strong, such as energy, telecommunications, 
transportation, and the environment. Using this model, we have 
seen the benefits that exports provide to host countries around 
the world and the U.S. economy. In African, on a 10-year 
rolling basis for every dollar of USTDA-program funds expended, 
we have seen a return of $24 in U.S. exports. During my time 
here today, I would like to provide you with concrete examples 
of how USTDA has assisted export activities and how African 
nations have benefited and how U.S. companies large and small 
have also benefited.
    In 2002, Roeslein and Associates, a 200-person 
manufacturing company based in St. Louis, Missouri, approached 
USTDA with an idea for selling American-built aluminum can 
manufacturing equipment in Nigeria. The company had identified 
Nigeria as a potential new market and asked that the agency 
share the cost of a feasibility study to confirm the market 
potential and economic and financial viability of the 
manufacturing of aluminum cans in Nigeria.
    USTDA provided the assistance requested by this small, 
Midwestern company, recognizing both the commercial viability 
of the project and the likelihood for success for project 
implementation. Ultimately, Roeslein secured a contract for $30 
million to build, ship, and reassemble an aluminum can 
manufacturing facility in Nigeria that was financed by the 
Export/Import Bank of the United States.
    In January of this year, I was invited to Roeslein facility 
in Red Bud, Illinois, to witness the sendoff of this newly 
manufactured equipment. During the visit, I had the opportunity 
to meet with several workers, who told me how difficult times 
were in Red Bud and how grateful they were for our assistance. 
To top it off, Roeslein provided USTDA with a check fully 
repaying the grant that we had provided to them that opened the 
doors to them in Nigeria.
    My second example involves a major infrastructure need 
common in Africa: energy. Just under a quarter of Sub-Saharan 
Africa's population has access to electricity. To put this into 
perspective, Sub-Saharan Africa generates 63 gigawatts of power 
for 770 million people, about the equivalent that Spain 
provides for a population of 40 million.
    Recognizing the need for more and diversified energy 
sources, USTDA partnered with Botswana Development Corporation 
to fund a feasibility study to determine the viability of a 
coal-bed methane gas extraction, considered clean energy source 
in Botswana. Once the project was determined to be feasible, 
USTDA also funded a reverse trade mission that brought key 
Botswana decision makers to the United States to examine 
production facilities and meet with U.S. industry, 
representatives, and potential financiers of the project.
    Based on the positive recommendations for coal-bed methane 
project, the Overseas Private Investment Corporation provided 
an $8.5 million investment guarantee to Kalahari Gas 
Corporation to fund the drilling of a new clean-energy source. 
Since that initial investment, U.S. companies have benefited 
from continuing expansion of this project, having exported a 
total of $52.9 million in U.S. goods and services.
    At the same time, it has provided a crucial need in 
Botswana. The Roeslein and Kalahari gas examples are but two of 
many in which USTDA has been the catalyst for assisting U.S. 
companies small and large in expanding their markets both in 
Africa and around the world. We often work in consultation with 
the private sector, including those testifying here today, such 
as Motorola, the Corporate Counsel on Africa, and the U.S. 
Chamber. And we have a very close collaborative relationship 
with those on the panel here today, USTDR and the Department of 
Commerce.
    In conclusion, I would like to thank the subcommittee for 
inviting me here today. Exports to Africa benefit both Africa 
and the U.S. economy. Before coming here today, I talked with 
our staff that is responsible for Africa and asked them why 
they enjoy their job. And they said because it makes a 
difference. It makes a difference in Africa, and it makes a 
difference here in the United States as well.
    I look forward to working with you to make the difference 
both in Africa and here in the U.S. Thank you very much.
    [The prepared statement of Ms. Zak follows:]

    [GRAPHIC] [TIFF OMITTED] T6816.007
    
    [GRAPHIC] [TIFF OMITTED] T6816.008
    
    [GRAPHIC] [TIFF OMITTED] T6816.009
    
    [GRAPHIC] [TIFF OMITTED] T6816.010
    
    [GRAPHIC] [TIFF OMITTED] T6816.011
    
    Mr. Rush. The chair thanks the gentlelady. The chair now 
recognizes the next witness, Ms. Holly Vineyard. She is the 
Deputy Assistant Secretary for Africa, the Middle East, and 
South Asia in the International Trade Administration. Ms. 
Vineyard, you are welcome, and please begin your opening 
statement.

                  STATEMENT OF HOLLY VINEYARD

    Ms. Vineyard. Thank you. Chairman Rush, Chairman Payne, 
Ranking Member Radanovich, Ranking Member Smith, other members 
of the committee, thank you for this opportunity to speak with 
you today about U.S.-Africa trade relations. I will summarize 
the points I make in my prepared statement and request that it 
be included in the record.
    Many countries in Africa continue to reap the benefits of 
sound changes to economic policy and improved governance 
undertaken during the last decade. Some are becoming key 
emerging markets for U.S. companies. So, while the current 
global economic situation has had a negative impact on them, a 
significant number of African countries have still maintained 
positive growth.
    Thanks in part to AGOA, trade between the United States and 
Sub-Saharan Africa has more than tripled since 2001. Still, our 
two-way trade with Sub-Saharan Africa measured only 3 percent 
of our total trade with the world last year, and our non-oil 
imports from Sub-Saharan Africa measured less than 1 percent of 
all of our imports.
    Increasing two-way trade with Africa could play a key role 
in boosting African export revenue, and additional U.S. exports 
to Sub-Saharan Africa will have a positive effect on the U.S. 
economy. As former Secretary of Commerce Ron Brown explained, 
we want to contribute to Africa's development through mutually 
beneficial two-way trade. And our current Secretary Gary Locke 
recently said in addition to creating jobs and economic growth, 
goods and services traded can also profoundly improve people's 
quality of life. Trade can hasten democracy and the spread of 
freedom. Trade can speed the delivery of transformative ideas 
and technology.
    But, in order for U.S. countries to expand their ties with 
Sub-Saharan Africa, many African governments will need to 
address a series of obstacles. A recent World Bank Report noted 
progress in many African countries. Senegal, Burkina Faso, and 
Botswana ranked among the top 10 global reformers. The report 
found though that regulatory and administrative burdens to 
entrepreneurs need to be reduced as they remain higher in 
Africa than in any other region of the world.
    The U.S. Chamber of Commerce's report on how corporate 
America really views Africa focused on the following 
impediments. African markets represent a difficult business 
case in terms of risk versus reward, corruption, and 
opportunity cost. The report also highlighted the need for 
improved infrastructure and stronger protection and enforcement 
of intellectual property rights, IPR.
    Both reports underscore the importance of IPR. In the 
International Trade Administration, we view inadequate IPR 
production and enforcement as threatening American interests as 
well as Africa's own capacity to attract investment, collect 
tax revenue, and build local industry. Counterfeit goods pose a 
major health and public safety concern. We have worked with 
African stakeholders by providing technical assistance and 
capacity building.
    This is an example of the kind of work we have done to help 
make it easier for U.S. companies to do business and, at the 
same, time to help strengthen business climates in African 
countries. We work with U.S. companies to resolve barriers to 
trade and investment. We currently have 250 active market 
access and compliance cases, and 38 of those are in Africa. 
Nearly one-third of the Africa cases we initiated last fiscal 
year were on behalf of small and medium-sized enterprises.
    Our commercial service operates a network of trade 
professionals in 109 U.S. locations and in 77 countries, 
including five in Sub-Saharan Africa. In fiscal year 2008, 
these offices reported over $860 million in exports that they 
supported for U.S. companies.
    I serve in ITA's market access and compliance unit. We work 
hand-in-hand with the commercial service. Policy and promotion 
are two sides of a coin. For instance, I coordinate with our 
domestic offices when I conduct outreach within the United 
States, including, Chairman Rush, when I visited your district 
in 2006 shortly after a trip that Flori and I took to Liberia 
to talk to your constituents about opportunities in that 
country. I accompanied our former director general of the 
commercial service on the trade mission that he lead to Sub-
Saharan Africa last year. And we are working closely with our 
commercial office in Nairobi as we prepare for the AGOA forum 
that Flori mentioned.
    Despite obstacles to trade and investment with Sub-Saharan 
Africa, there has never been a better time for U.S. companies 
wishing to explore these markets, and ITA offers the tools and 
services to help them. We look forward to working with you, 
your staff, and your constituents, whether here in Washington, 
in your districts, or on the African continent.
    Thank you again for this opportunity, and I look forward to 
your questions.
    [The prepared statement of Ms. Vineyard follows:]

    [GRAPHIC] [TIFF OMITTED] T6816.012
    
    [GRAPHIC] [TIFF OMITTED] T6816.013
    
    [GRAPHIC] [TIFF OMITTED] T6816.014
    
    [GRAPHIC] [TIFF OMITTED] T6816.015
    
    [GRAPHIC] [TIFF OMITTED] T6816.016
    
    [GRAPHIC] [TIFF OMITTED] T6816.017
    
    [GRAPHIC] [TIFF OMITTED] T6816.018
    
    [GRAPHIC] [TIFF OMITTED] T6816.019
    
    [GRAPHIC] [TIFF OMITTED] T6816.020
    
    Mr. Rush. Thank you very much for your opening statement. 
The chair recognizes himself for 5 minutes, but before the 
chair do, I ask unanimous consent that the opening statement of 
the members of both subcommittees be entered into the record. 
We are trying to save some time, so if members want to submit 
their opening statements for the record, I ask for unanimous 
consent, and hearing no objection, members will submit their 
opening statements for the record.
    I also at the same time--the Ranking Member Mr. Radanovich 
has asked for unanimous consent to include these two items into 
the record. ``A Conversation Behind Closed''--the chair 
recognizes Mr. Radanovich.
    Mr. Radanovich. Thank you, Mr. Chairman. I appreciate that 
unanimous consent request on ``A Conversation Behind Closed 
Doors'' by the African Business Initiative, and, also, ``United 
States and Africa'' a publication of the Corporate Counsel on 
Africa.
    [The information appears at the conclusion of the hearing.]
    Mr. Rush. Hearing no objections, so ordered. The chair 
recognizes himself for 5 minutes for the purposes of 
questioning the witnesses. There have been a concern about the 
staffing of the FCS offices in Africa. In section 125 of AGOA, 
Congress found that FCS's presence in Africa had been reduced 
since the 1980s and that the level of staff in 1997, which was 
seven offices in four countries, did not ``adequately service 
the needs of U.S. businesses attempting to do business in 
Africa.''
    Accordingly, the legislation required the posting of at 
least 20 FCS offices in not less than 10 African countries by 
December 31, 2001 ``subject to the availability of 
appropriations.'' I guess that was the caveat. Ms. Liser and 
Ms. Vineyard, would you address the staffing mandates of AGOA? 
Have they been met, or has the FCS been fully staffed? And if 
not, why hasn't it been fully staffed? And has the 
Administration requested additional staffing? And has the 
Congress provided additional funding appropriations for it? Ms. 
Liser, you can start.
    Ms. Liser. Chairman Rush, I would like to take an 
opportunity to say something more broadly about----
    Mr. Rush. Please.
    Ms. Liser (continuing). The staffing for AGOA.
    Mr. Rush. Sure.
    Ms. Liser. But, I think it is appropriate to turn to Holly 
Vineyard since the FCS is really under the Department of 
Commerce.
    Mr. Rush. OK, Ms. Vineyard.
    Ms. Vineyard. Thank you. We have recognized that ITA's 
international presence in many of the world's critical emerging 
markets, including Africa, needs to be expanded in order for us 
to more aggressively support export-related job creation and 
maintenance. We sought an additional $5.2 million to build a 
more robust presence in these challenging markets. ITA 
personnel on the ground in these areas would help U.S. firms 
navigate through the often confusing export barriers and help 
match these firms with potential customers, partners, or 
distributors.
    The House did not include this requested increase, and we 
still believe that our expanded presence is an important 
component to opening the markets in Africa to U.S. businesses.
    Mr. Rush. So, there hasn't been an increase in 
appropriation even though the Congress dictated that that 
should be the case, that there should be an increased presence 
on your part and more resources available to you?
    Ms. Vineyard. That is correct, Chairman. Last week, in the 
House's consideration of the Commerce Justice of Science 
Appropriations Bill, the request for the additional $5.2 
million was not included.
    Mr. Rush. OK, Ms. Liser, you had----
    Ms. Liser. Yes, I just wanted to share with you, Chairman 
Rush and Chairman Payne and the others, that as the agency that 
coordinates with all of the other government agencies on the 
implementation of AGOA, that it is important to know that we 
have a number of people both here and in Africa that are active 
participants in implementing AGOA. We have people from TDA, 
from the Department of Commerce, of course. We also have people 
from the State Department who are at the post. We have people 
from the Department of Agriculture.
    And when we do our trade and investment framework agreement 
meetings throughout the continent, where we are trying to 
enhance trade and investment with the countries that are AGOA 
eligible, we often take a very large team of government 
agencies with us, OPIC, Exin Bank, Department of Labor. So, we 
feel to some extent that we do have a strong team that is 
looking at how we can best work together in the Administration 
to implement what we hope to accomplish under AGOA.
    Mr. Rush. OK, what kind of training do these individuals 
have? Are they trained on the type of activities that will 
promote the AGOA mandate? Or are they--these are not permanent? 
These are interim and temporary assignments that individuals in 
your department might fulfill?
    Ms. Liser. No, actually what we are drawing on is really 
the strengths and the mandates of a number of government 
agencies. Almost every agency--and I know I have left out a 
number of them, Small Business Administration, almost all of 
them have offices with permanent staff that are working on 
Africa and on expanding trade and investment.
    Each has a different mandate, but we all work, I think, 
collectively and in a coordinated fashion. So, again, we are 
looking at, just as an example, the Department of Agriculture 
has a number of people that are helping us to improve the 
agricultural standards of the Africans. And they have even 
placed on the ground at our regional trade hubs, which are run 
by AID. I didn't mention AID. They are one of our biggest 
agencies that are working to implement AGOA. And on the ground, 
we have placed at the regional trade hubs throughout Africa 
expert from the Animal, Plant, Health Inspection Service. The 
Africans had complained that they could not meet the U.S. 
sanitary and vital sanitary standard.
    So, I just wanted to share that we continue through a 
number of agencies and their mandates and their staffs to 
implement the goals of AGOA.
    Mr. Rush. So, am I to just--this is my final question. Am I 
just to then conclude that you don't need the additional 
appropriations?
    Ms. Liser. We didn't say that.
    Mr. Rush. All right.
    Ms. Liser. Mr. Chairman, you did not hear me say that.
    Mr. Rush. OK, I thought maybe----
    Ms. Liser. We would definitely welcome a strengthening of 
whatever support we can get through appropriations for all of 
our respective mandates and collectively to do what we can to 
implement AGOA. Thank you.
    Mr. Rush. Thank you very much. The chair now recognizes the 
gentleman from California for 5 minutes, Mr. Radanovich.
    Mr. Radanovich. Thank you, Mr. Chairman, and I want to 
thank you for holding this hearing. And I want to welcome the 
witnesses to the committee hearing. I do have a question for 
each. Ms.--is it Liser? Ms. Liser? Thank you. You state that 
one of the ways that you are looking to shore up global trade 
is supporting the global rules-based trading system. In looking 
at Sub-Saharan Africa, which countries need improvements? Which 
are closer to that standard? Can you kind of give me an 
overview to Sub-Saharan Africa with that regard?
    Ms. Liser. Certainly. First of all, the Africans as a group 
are the largest regional grouping of countries within the World 
Trade Organization. I remember when I first started working on 
trade issues and would go to Geneva when it was still the GAT 
before it became the WTO, you did not see very many Africans at 
the table at all. And now, when you go back to Geneva, you see 
many Africans, who are there at the table, and they are active 
in the negotiations in the WTO.
    So, first of all, as a group, we think that they are indeed 
abiding by the rules-based system and are very active in 
promoting their interest in the negotiations and in making sure 
that they benefit from the global trading system.
    In terms of specific countries, I think for Africa, part of 
the issue is they have, as I said earlier, a relatively small 
share of world trade. Even with all of their rich resources on 
the continent, they have anywhere between 2 and 3 percent of 
world trade. So, the issue for them has to do with a lot of the 
supply-side constraints. They have transportation that is 
expensive and inadequate in many cases, high cost of energy. I 
have not visited one factory producing products in Africa that 
did not have a backup generator. So, that adds cost, and so----
    Mr. Radanovich. Can you kind of outline, can you give me an 
idea of the countries in Sub-Saharan Africa?
    Ms. Liser. The particular ones that----
    Mr. Radanovich. Perhaps, the ones that are doing better 
than others, the ones that need the most help.
    Ms. Liser. Well, I think as a group, they need a lot of 
support, and we are trying to give it to them. But, in terms of 
countries that are doing very well, South Africa is doing very 
well. In fact, their trade with the U.S. grew by about 71 
percent last year. They also are the largest beneficiary of 
AGOA, a non-oil beneficiary of AGOA. But, there are a number of 
countries that produce a range of products. We think that a 
number of them are diversifying.
    So, I think in East Africa, Tanzania is really beginning to 
be quite competitive in a number of areas but still needs a lot 
of help. The MCC compact will help them with that.
    In West Africa, we have reports that Senegal is also doing 
fairly well in terms of advancing its trade. There are quite a 
few of them. Lisutu is the largest exporter of apparel to the 
United States. So, you would not think that from a very tiny 
country, small as it is.
    Mr. Radanovich. All right, thank you very much. Ms. Zak, 
welcome to the committee. Ms. Zak, you had mentioned in your 
testimony, the importance of developing private sector 
relations between U.S. and Africa. Could you discuss further 
the importance of expanding and developing the African private 
sector and how this could benefit both Africa and the United 
States in the future?
    Ms. Zak. Thank you very much, and thank you very much for 
the question because I think it is very important to do both. 
One of the things we focus on is developing the local economy, 
and I think to do that, you need to develop the private sector 
as well to develop the local economy.
    So, for example, one of the examples that I gave was the 
Roeslein example, the can manufacturing. That, as a result, 
will create jobs in country and, at the same time, created jobs 
in the United States. So, we try to work with the public 
sector, but also with the private sector in developing the 
private sector as part of our program and see that as an 
important part of economic development.
    Mr. Radanovich. Tell me in your role in promoting trade 
with Africa, what barriers have you encountered that you think 
most need to be removed?
    Ms. Zak. Well, I think, for us, one of the things that we 
hear from U.S. companies is one of the problems is that there 
are other countries that are providing assistance in a non-
competitive way. And as a result, they need assistance from the 
U.S. to be able to compete with other countries. And I think 
that, for them, is one of the biggest barriers is facing others 
to provide assistance in a way that is not competitive.
    Mr. Radanovich. All right, thank you, and I yield back.
    Mr. Rush. The chair now recognizes the chairman of the 
African subcommittee, Mr. Payne, for 5 minutes.
    Mr. Payne. Thank you very much. Let me ask under the AGOA, 
until now the major benefits in increased exports under AGOA 
have been limited to several countries, to South Africa, maybe 
Lesoto, Kenya, Madagascar, Swaziland mainly in assembling 
clothes. How can we broaden the scope of AGOA, first of all in 
your opinion? Secondly, is it wise to expand market access 
under AGOA for non-apparel textiles, certain agricultural 
commodities, as you briefly touched on, in order to enable more 
countries to utilize AGOA?
    I feel it is certainly underutilized, and maybe, each one 
of you might be able to comment on how you think it can be 
increased and improved.
    Ms. Liser. Thank you, Chairman Payne, and for your 
longstanding support of AGOA and interest in seeing how we can 
maximize its benefits. We actually have seen an expansion of 
the number of countries that are exporting under AGOA as well 
as the products that they are sending. I know that it is a 
range of products that you don't normally associate with 
Africa: footwear, eyewear. I have been to an eyeglass factory, 
footwear factory. Processed agricultural products, fruits and 
jams and jellies are being produced. Peri-peri sauce or hot 
sauces as they call it.
    So we are actually seeing that and we do have more U.S. 
businesses that see the products coming from Africa as quite 
competitive in the U.S. market, especially in niches. So 
apparel and textiles are still 22 percent of the non-oil, but 
that figure actually used to be much higher. Just a few years 
ago, it was 40 percent of non-oil.
    So, to us, as we see the number go up in terms of AGOA non-
oil exports to the U.S. and the percentage of apparel go down, 
we know that that is a reflection of the diversity that is 
occurring. In terms of ways to expand and improve AGOA, on the 
one hand, people could say it is the market access, that we 
should add more products. But, I think as we look at it, we 
know that about 98 percent of the products they send us are 
already eligible to come into the U.S. duty free.
    The truth is that on the capacity side, they are really 
lacking, and if we really want to help Africa take advantage of 
AGOA, we have to do something to help them with their 
productive side.
    I will just use one example. We had determined that in 
Ghana, there was a company, a small company, that was producing 
absolutely beautiful baskets, but they were producing about 500 
or so of those baskets per year. They got an order--I probably 
shouldn't say what buyer, but a large buyer here in the U.S. 
ordered about 5,000 baskets as a test order and would have 
ordered many more thousands of baskets from them. Just being 
able to ramp up from 500 baskets a year to 5,000 baskets a year 
almost put the company under. They had to put people on the 
ground from the buying company there to help them and when the 
containers left with the trial shipment, pretty much everybody 
on the other side said that is it for us.
    So, part of the issue is their productive capacity, and we 
really have to find good ways to help them. I think we are 
doing some of the things that need to be done, but nowhere near 
what needs to be done to really help them take advantage of 
that access that they already have.
    So, you know, that is part of our main problem with AGOA.
    Mr. Payne. Well, since I have been told by Mr. Rush's 
assistant that I have only one more minute, I will just ask one 
real quick question. I turned it upside down though, but just 
this one other question. In 2000, as you know and we had 
discussed, AGOA was created to promote economic development in 
Africa by enabling African countries could not certainly 
compete before in a global trade arena with other least 
developed countries, LDCs, to gain unprecedented access to U.S. 
markets through tariff-free quotas for certain products. And as 
we know, AGOA has and continues to create hundreds of thousands 
of jobs, promote community prosperity and economic growth 
annually on the continent.
    As we have also mentioned though that AGOA has only 
scratched the surface. We need capacity building. We need a 
number of things we don't have time to get into, infrastructure 
and all that. However, this is the question, as you know, that 
the General Systems of Preferences, the GSP, expires at the end 
of this year.
    Some in Congress are discussing harmonizing and expanding 
preference programs across LDCs. For example, Bangladesh faces 
significant developmental challenges, but it has a competitive 
textile and apparel industry exporting five times the amount of 
textiles that all of AGOA countries export collectively to the 
United States.
    This is without the preferences. Now we have a movement to 
have preferences, but Bangladesh is doing five times more than 
all of Africa put together. And I wonder, you know, how much 
would an all LDC-preference program erode the AGOA program, 
which has not actually been able to move to where it ought to 
be? And I would just ask maybe each one of you maybe if you 
could just, in about 20 seconds according to my time, if you 
could just touch on that.
    Ms. Liser. I think that, first of all, the U.S. trade 
representative, Ambassador Kirk, is in the process of looking 
at our trade preference programs. And as you noted, GSP will be 
ending. We have a couple of other programs that are ending. 
AGOA, of course, goes through 2015, but we are looking at AGOA 
as well in that larger context of what do we need to do and 
where do we need to go with preference programs.
    That review has not been completed yet, but I think that 
for those of us who work on Africa and have been looking at 
this for quite some time, what we are aware of again are the 
capacity challenges on the African side and a sense that the 
Africans face some particular challenges that perhaps other 
countries do not.
    So, we recognize that there are a number of countries in 
many regions that are poor and do need help. At the same time, 
all LDCs don't walk in the same shoes. So, as we go forward, 
our expectation is that we will be looking at how we can help 
those countries who need the help the most to benefit more from 
the preference programs, not just AGOA but also GSP. There are 
a lot of countries that are in GSP that haven't been able to 
take advantage of it either. But we hope that it can be crafted 
in such a way that we are mindful of the areas that are still 
in their infancy or infant industries for the Africans and 
where perhaps there might be ways to shape programs, that they 
might still be able to have an advantage in those areas, a 
competitive advantage and a market in those areas.
    Mr. Payne. Yes, anyone else? Yes?
    Ms. Zak. I must defer to Ms. Liser, but I also want to add 
that it is very important to be able to provide the 
infrastructure for trade. And with respect to AGOA or any other 
trade, it is important that the infrastructure does exist to be 
able to have trade take place.
    Ms. Vineyard. I agree with absolutely everything my two 
colleagues have just said. If I could just add in one 
additional point for further context is that we have ongoing 
discussions in the Doha development agenda to talk about these 
very issues, and so, we will continue to encourage our African 
counterparts and interlocutors to fully engage in that as we go 
forward.
    Mr. Payne. Thank you very much. Mr. Chairman.
    Mr. Rush. The chair now recognizes the ranking member of 
the Subcommittee on Africa, Mr. Smith, for 5 minutes for the 
purposes of questioning.
    Mr. Smith. Thank you very much, Mr. Chairman. Let me thank 
our distinguished witnesses for your insights and counsel. Your 
testimonies are outstanding. Just since we are pressed for 
time, I would like to ask a few questions and then yield, and 
you can answer each of them or whatever ones you would like.
    Back in 2000, I was the prime sponsor of the Trafficking 
Victims Protection Act. It took 2 years to get the legislation 
passed and emphasizes the three Ps in combating human 
trafficking, be it labor or sex trafficking: prosecution, 
protection, and prevention.
    Last week, the Secretary of State released, and our 
legislation prescribed, that this TIP report would be produced 
every year. And with a great deal of fanfare, Secretary of 
State Hillary Clinton had a State Department event, and it was 
very well attended by NGOs and by some government officials.
    And my question would be since 19 countries of Africa are 
on the tier two watch list, meaning they have egregious 
problems with trafficking, but they are taking some actions to 
mitigate those. But they are still on the watch list. They 
could go either way. Seven countries in Africa are actually on 
the tier three list, which means they are not taking even 
minimum efforts to stop their own trafficking. There is 
government complicity with the traffickers and maybe even 
government people on the payroll, especially at the police 
level.
    To me, that does grave damage to the economic climate, and 
my question would be how do each of you in your work integrate 
the excellent work the state is doing on combating trafficking? 
Again, the victims are exploited in slavery for those who are 
being exploited, but it also is ruinous, I would think of, the 
climate. I know it is. And as one of you pointed out, Ms. 
Vineyard, you know, corruption. We know that. I have held 
hearings myself when I was chair of our Human Rights Committee 
and then the Africa Committee on what corruption really does to 
a country, not just for those who would invest, but obviously 
in countries. So, how do you integrate the work here country by 
country?
    Secondly, on the issue of the Millennium Challenge 
Corporation, the MCC, you know, Mawli got $460 million, Ghana 
$547 million. To me, that is the model of trying to integrate 
all of the indicators, all of the prerequisites to getting that 
money, once one signs a compact, so that there is 
accountability and hopefully a lot of good positive outcomes. 
Are we doing enough? Are we funding the Millennium Challenge 
sufficiently enough? I think we are not. I think we could do 
much more to boost up the good work that they do.
    Thirdly, on competition with the PRC, Mr. Payne has held 
hearings. I have held hearings when I was chair of the Africa 
Committee of the growing and, I think, very negative influence 
of the PRC, especially as it relates to dictatorship, like in 
Sudan, but also in Zimbabwe. Although we have hope now with the 
new prime minister there.
    But they come in--they being the Chinese--with no human 
rights strings attached whatsoever, all out of self-interest as 
we saw. I was in DR Congo last year in Goma, but I also paid a 
visit to the capital while there and heard several of the 
lawmakers there complaining bitterly about the agreement that 
had been made about building a large road, and the Chinese 
government gets all the commodities, the precious minerals on 
both sides of the roadway, and I suspect that roadway has a lot 
of zigs and zags in order to fleece the DR Congo of their 
goods. Now, so your thoughts on Chinese influence.
    And finally, you know, we have always thought that the NGOs 
are king, and NGOs do a marvelous job everywhere. But even 
today, and I have long thought of this. President Michelle 
Bachile from Chile made a very good point that when we 
overemphasize the NGOs, we do so unwittingly at the expense of 
government capabilities and capacities. Yes, corruption is a 
problem in Nigeria. We have all been there. I have been there 
many times. We know corruption is a problem, but there is a 
risk, and maybe a positive risk, of saying, but we want to 
still build up the government capability to do business and 
everything else that they need to do, NGOs notwithstanding. And 
your thoughts on that.
    Mr. Rush. Before the witnesses answer the question, Mr. 
Smith, I have to remind you we have a couple more members who 
want to ask questions, and they should be given the right. You 
have asked about five or six questions, four, all right. So, 
would you restrict your questions to two so we can get to the 
other members because they have been waiting here for sometime 
please?
    Mr. Smith. Well, I have asked them, so they can pick and 
choose whatever they would like to answer.
    Ms. Liser. If I could just say, maybe we should defer on 
the MCC question because I think that, without a colleague of 
ours from the MCC here, that might be a good one to get an 
answer to at a later point.
    You have asked a number of good questions. We could 
probably go on and on about them. On the trafficking one, I 
think that you know that the AGOA eligibility criteria don't 
refer specifically to trafficking but do refer to child labor 
and protection of worker rights. And in the annual review for 
AGOA eligibility that we have, we start it every September, end 
it usually by December, we look very carefully at this. State 
Department is always at the table, is one of our closest 
partners in looking at a number of these labor-related issues. 
And we do indeed look at a number of reports they have. That is 
not the only one. So, the answer to the question is that we do 
integrate what State is doing in these very important areas, 
and we do take very seriously the criteria has set for AGOA 
eligibility.
    In terms of NGOs and government capability, I think the 
only thing that I would respond just sort of from the 
experience we have had is that we need civil society. We also 
need governments to have strengthened capacity, and we need the 
private sector to also work together.
    And so, we have found that in the countries that are doing 
the best in terms of economic reforms, opening their markets, 
as well as government reform, that what you often find is that 
there is a good dialogue going on between all three of those: 
the government, civil society, and private sector. So we would 
like to see more of that happen and in more countries.
    Finally, on the point of competition with the PRC, on the 
one hand, we have, I think, expressed concern about some of 
these relationships and the way that they are evolving, 
particularly with countries like Sudan and Zimbabwe where there 
has been a lot of international concern about those regimes and 
what they are doing there. So, where PRC is actually going off 
and establishing those kinds of relationships with rogue 
governments, we have expressed concern.
    On the other hand, traveling to Africa frequently, we also 
see projects that the Chinese are undertaking which, with the 
cooperation of the Africans, seem to be going well. And I will 
just tell you one of them.
    When I first went to Liberia a number of years ago, the 
trip for the airport into Monrovia took an hour-and-a-half over 
roads that I--it was just horrible. The next time I went, we 
had a section of road that went very, very smoothly, and then 
we went back into the potholes and so forth. The last time I 
went, it was totally smooth. That is a road that with PRC 
involvement has benefited Liberia.
    So, I guess our view would be that the Africans have to, at 
the highest levels, whether it is head of state, determine what 
they can do with the PRC that benefits their countries and 
their people. And then what we need to do here in the U.S. is 
to do the same. We need to be looking at what are the best ways 
that we can work with them.
    And frankly I think that through the MCC and through the 
efforts of a number of government agencies, we are finding the 
best ways for us to also work with them. But again on the 
negative side, we have definitely weighed in on that, and we 
believe that the Chinese will be fairly isolated in that 
particular approach to African governments that are not doing 
the right things.
    Ms. Zak. I was going to say in the interest of time, I will 
just say that was very well said. And I do want to add, with 
respect to the PRC, the fact that we do need to support the 
U.S. government agencies that are helping U.S. businesses with 
respect to the competition that is provided by the PRC. And 
that is what the U.S. Trade and Development Agency does, Ex-Im 
Bank, other members here. So the one thing we can do is support 
those agencies.
    Ms. Vineyard. Thank you. I don't disagree with my 
colleagues. On the issue of competition with China, I would 
like to add an extra point in that one of the issues that we 
have with the Chinese are the increased counterfeit goods that 
are coming into Africa. And that has been one of the emphases 
of our programs in looking at intellectual property rights is 
in training the customs officials on how to identify 
counterfeit goods that come across borders, in working with 
judiciaries on enforcement, and prosecution type issues. So 
when I talk about intellectual property rights, that is 
definitely something that is on our minds with respect to the 
Chinese influence.
    With your question regarding corruption, we counsel 
companies. We find out about some issues from companies 
directly. Sometimes our advocacy centers when we are looking at 
how companies are positioning themselves to bid on contracts, 
some of those issues come up. We address these issues with host 
government as appropriate.
    And finally, we also work with foreign governments outside 
of Africa, maybe the signatories of the OECD Anti-Bribery 
Convention, to address the supply side of those issues as well.
    Mr. Rush. The chair now recognizes Ms. Woolsey for 5 
minutes.
    Ms. Woolsey. Thank you, Mr. Chairman. My concern is more 
like on the human cost of trade. So I would be concerned about 
your opinions and your responses to when the United States goes 
into a developing country and markets to that country, how do 
we ensure that we are not disrupting local markets and 
economies? I am particularly concerned about the farmers and 
the small craft persons, and I am also concerned that we invest 
in microfinance, you know, in developing nations and in 
communities. And we are trying to help them bolster their 
economies, so how are we supporting that and making sure we are 
not competing with those that are on the ground trying to do 
the work themselves?
    For example, in Tanzania, 100 percent of the mosquito nets 
are actually made there. So how are we supporting this kind of 
growth?
    Ms. Zak. Well, I will respond to part of that. With respect 
to how do we choose these markets and what do we do, I asked 
that question to my staff. And their response was we listen. We 
listen to what the host country needs. We listen to what they 
want. We listen about the fact that they want to develop their 
economies and they want to be self-sustaining.
    So, from the U.S. Trade and Development Agency's point of 
view, we listen to what the needs are of the host country, and 
that is how we ensure that they are protected.
    Ms. Woolsey. And, Ms. Zak, who are you listening to? The 
people on the street or their government?
    Ms. Zak. We are actually listening to many people. One 
would be listening to government officials, but we also work 
with the private sector so listening to the private sector in 
country, listening to people on the street, also listening to 
the experts in U.S. government. We work closely with the 
Department of Commerce, the Department of State as well.
    So, we gather as much information as possible in this 
process, but it isn't just listening to host-country 
governments. It is also listening to the people in the country, 
as well as the experts who have that information.
    Ms. Woolsey. Thank you.
    Ms. Liser. Congresswoman Woolsey, I think that when you 
were asking about, concerned about the human cost of trade, I 
was thinking about the fact that this is debate that happens in 
a lot of countries, including the U.S., which has to do with 
both the cost and the benefits of trade and understanding how 
economies as a whole really can benefit from trade and how you 
can look at some of the sort of the, I guess, the pros and the 
cons of what happens.
    Now, in terms of Africa and the farmers that are there, 
that was one of the points I had made earlier--it might have 
been before you come--that many African countries are producers 
of raw commodities, and that we are not seeing the kind of 
processing of those products. So, it keeps them at sort of the 
low end of the global trading--the low end of trade in terms of 
global trade.
    And so, one of the ways that we hope that we are working 
with them to help them benefit more and to see more benefit 
rather than cost from trade is to help them not be at the 
lowest end of the value chain we call it.
    So, for example, countries that produce cotton, we want to 
also see them producing the thread, the yarn, the fabric, and 
the apparel. They will be able to attract investment, create 
jobs, and the backward chain helps the cotton farmer as well so 
that they are not selling all of their cotton to countries like 
China who then takes those same products, makes it into value-
added products that employ millions of people and then send 
their apparel to the rest of the world with cotton in it. The 
cotton farmers get very little of that, and the others who 
process it get more.
    So, again we think it is very important if Africans are 
going to benefit more from trade that they have the opportunity 
and the skills and the capacity to add value to and process 
those products.
    The last point I would make, you talk about small 
craftsmen, and I would just say that many of the African 
countries have very competitive producers of what we would call 
handicrafts, and we are importing a lot of those handicrafts 
now. There is a lot that is increasing, but as I said about the 
gentleman with the baskets in Ghana, for you to be able to get 
the big orders and to be able to hire more people in your 
factory or maybe even have a second factory, you have to have 
the capacity to meet those orders. And so, helping a basket 
maker in Ghana, just as an example, going from 500 to 5,000 to 
50,000 baskets, that is where we need to give them assistance.
    Ms. Woolsey. Well, would it be possible in a developing 
country, instead of insisting that they grow from 500 to 50,000 
over time, that there is a different way to produce that same 
number of baskets by spreading it out over the district? I mean 
maybe they don't want to be producers of 500,000 baskets.
    Ms. Liser. And I think that that is possible, but again, 
producing small amounts of products and trying to sell those on 
the global market in a competitive way, unfortunately, makes 
them not as competitive as the people who can do the 5,000 
baskets. And I don't know if you ever look, but you will often 
see in some of our big box stores, Target and others, you know, 
products that look like they are from Africa. But if you turn 
them over, you will see that they are made in other places.
    We want the Africans to be able to do that. Do we value 
having those very small quantities of handicrafts that are 
handmade and beautiful? We absolutely do. But if they are going 
to be bigger players in the global trading system, somehow they 
have to be able in certain circumstances to go from that 500 to 
that 5,000.
    Mr. Rush. The gentlelady's time is up.
    Mr. Payne. Mr. Chairman, if the other two panelist members 
would permit, if we could have the second panel, and they could 
begin with the questioning because we don't know when the votes 
will come again. If that is all right with everyone here, and 
we will start with Ambassador Watson and Chairman Lee. And if 
we could then go to the time. Would that----
    Mr. Rush. So are you suggesting that we dismiss this panel?
    Mr. Payne. Yes, so that we don't----
    Mr. Rush. Well, OK. If it is all right with them. The chair 
recognizes the gentlelady from California.
    Ms. Lee. OK, I want to thank everyone for yielding, but we 
have a big deal on the sense and disparity issue that I have to 
run over to, but I just want to thank all of our panelist and 
our chairmen for this opportunity. And welcome everyone.
    And just very quickly wanted to ask you about the issue of 
HIV and AIDS and medicines on the continent. As you know, the 
continent faces a severe public health challenge. In some 
cases, countries have secured, you know, licenses from brand-
name pharmaceutical manufacturers or issued compulsory license 
to produce drugs at a cheaper cost. And in other cases, 
countries have imported cheaper, generic versions of those 
drugs.
    So, I want to get an update just very briefly, and you can 
send it in writing if you would like, with regard to the 
enforcement of U.S. trade laws and patent rights and how they 
are or are not prioritized at the expense of saving lives 
because this has been a huge issue for many, many years now. 
And we know that generic drugs cost a heck of a lot less, could 
save a heck of a lot of lives, but many of our laws, our patent 
laws, actually hurt rather than help the generic drug industry.
    Ms. Liser. Congresswoman Lee, that is a very important 
question, and I think we probably should send you a response. I 
think you will be pleased to know that many of the African 
countries do have access now to the ARVs and at prices that are 
quite low. So that is happening for a variety of reasons, but 
for the sake of time, I will just promise you that you will get 
a good answer to this.
    Ms. Lee. Thank you very much, and thank you again for 
yielding.
    Mr. Rush. The chair recognizes another gentlelady from 
California, the third gentlelady from California, Ms. Watson, 
for 5 minutes. You want to ask the second panel?
    Ms. Watson. I will defer.
    Mr. Rush. OK, thank you very much. Well, the chair wants to 
really thank you all. You have been expert and very 
informative. And we certainly appreciate you taking the time, 
and again, we apologize for the delay. Thank you very much.
    I am going to now, as we agreed upon, I am going to 
relinquish this chair to Chairman Payne for the second panel, 
and he will call the second panel.
    Mr. Payne [presiding]. Thank you very much, Mr. Chairman. 
Let me thank the first panel again, and as we mentioned to 
members who came late, we apologize for the tardiness, and we 
tried to explain to them what was going on here.
    We really appreciate the patience of the panel and others 
and the audience. Is Steve Hayes going to be here? We will 
introduce the second panel. He just stepped out for a minute, 
but Mr. Steve Hayes who is the President and a CEO of the 
Corporate Counsel on Africa, and I know, who just recently 
returned, I believe, from Zimbabwe. We have Dr. Lisa D. Cook, 
Assistant Professor, James Madison College, Department of 
Economics at Michigan State University. We have Mr. Greg 
Lebedev. How is that? 50/50? Senior Advisor to the president, 
U.S. Chamber of Commerce, Chairman of the Center for 
International Private Enterprise. And finally Karen Tandy, 
Senior Vice President, Public Affairs and Communications for 
Motorola Incorporated. And we will begin with Steve Hayes, who 
will be seated in a second. I knew Steve when he was a young 
YMCA worker 30 years ago working around the world and Africa. 
So, I knew he would be back in time, so he is one of our 
proteges.

 STATEMENTS OF STEPHEN HAYES, PRESIDENT AND CEO, THE CORPORATE 
    COUNSEL ON AFRICA; GREG LEBEDEV, SENIOR ADVISOR TO THE 
   PRESIDENT, U.S. CHAMBER OF COMMERCE, CHAIRMAN, CENTER FOR 
    INTERNATIONAL PRIVATE ENTERPRISE; LISA D. COOK, PH.D., 
   ASSISTANT PROFESSOR, JAMES MADISON COLLEGE, DEPARTMENT OF 
 ECONOMICS, MICHIGAN STATE UNIVERSITY; AND KAREN TANDY, SENIOR 
  VICE PRESIDENT, PUBLIC AFFAIRS AND COMMUNICATIONS, MOTOROLA 
                              INC.

                   STATEMENT OF STEPHEN HAYES

    Mr. Hayes. Thank you, Mr. Chairman, and I hate to say it, 
but it has been 40 years.
    Mr. Payne. Wow, yes. I knew it. I was just trying to cheat.
    Mr. Hayes. I will shorten my remarks as well as just note 
for the record the reports are over there. My remarks will 
focus on the need for far greater U.S. private investment in 
Africa. And I think we need a far more coordinated approach to 
Africa between the public and the private sector with an 
emphasis on creating jobs in Africa and the United States as 
well as increasing trade to the U.S. and Africa.
    I think it is in our national interest, and I would say 
highest national interest, to invest in Africa as a means to 
ensure long-term relationships with the various countries and 
peoples of Africa. There is no region in the world more 
friendly to the United States than Africa, but in the long 
term, nations will necessarily gravitate to those countries 
with whom they are more deeply economically engaged.
    For the sake of our own economy as well as the economies of 
Africa, the United States private sector needs to be far more 
engaged throughout the continent in investment and in the 
overall development process at all levels. However, unless the 
U.S. government provides vocal and active leadership and makes 
this a national priority--there we go--makes this a national 
priority, U.S. companies may be too slow in stepping forward. 
We need to work together to make it easier for the U.S. private 
sector to invest in Africa.
    We can make a major difference in Africa by investing in 
education, capacity building and training, and working with 
African nations to engage U.S. infrastructure and agribusiness 
interest, especially in the planning, development, and 
investment processes. These investments not only strengthen 
Africa but help the American economy.
    What I think we have to realize is that Africa can help us 
as much as we can help Africa. The investments we make in 
education, for instance, could be beneficial for our own 
training schools, including our universities and technical 
schools. Working with Africa to develop greater and broader 
educational capacity not only helps Africa, but can provide 
jobs for American faculty and technicians as trainers in 
Africa.
    We have a highly trained service sector and professional 
education sector that could be put to further use by working 
with Africa to build capacity. Governments cannot do this 
alone.
    Also, institutions, and I dare tread here, but also 
institutions such as ``Africom'' can assist African governments 
in meeting their own security needs as Africa's own security 
forces are developed and trained through well-targeted capacity 
building and training programs. To do this, we must get the 
U.S. private sector much more engaged in Africa.
    The Corporate Counsel on Africa believes that a key to our 
success will be the degree to which public and private sectors 
work together in planning and implementation. I think for us to 
be effective in Africa, as effective as possible, requires a 
level of cooperation among the public and private sectors that 
we have not seen since the Marshall Plan.
    As our corporate members work together over three months 
preparing our policy recommendations to the Obama 
Administration, and I thank you for including it in the record, 
it is of interest to me that throughout the report, sector by 
sector, a major theme is not simply what government should do 
as much as that the government and the private sector must work 
together in planning as well as implementation to develop our 
economic and political ties to Africa. We also strongly urge 
the Administration to bring into the process at equal level 
various players in Africa from the countries themselves to the 
region or economic communities because African development is 
becoming regional rather than simply a national challenge and 
opportunity.
    And this will be a major theme of our upcoming U.S.-Africa 
business summit to be held in Washington the week of September 
28. We expect that more than 1,500 business persons from Africa 
and the U.S. to be here along with several hundred government 
representatives from throughout Africa, including heads of 
state and heads of government. And we hope all in this room 
will be a part of this.
    And, Mr. Chairman, I will also just digress very slightly 
to say that your question on GSP, I would like to take that 
also and say that if there is a blanket GSP, I think the 
economies of Africa will be hurt very badly. I think we need to 
have something unique for Africa. Thank you very much.
    [The prepared statement of Mr. Hayes follows:]

    [GRAPHIC] [TIFF OMITTED] T6816.097
    
    [GRAPHIC] [TIFF OMITTED] T6816.098
    
    [GRAPHIC] [TIFF OMITTED] T6816.099
    
    [GRAPHIC] [TIFF OMITTED] T6816.100
    
    [GRAPHIC] [TIFF OMITTED] T6816.101
    
    [GRAPHIC] [TIFF OMITTED] T6816.102
    
    Mr. Payne. Thank you very much. Mr. Lebedev.

                   STATEMENT OF GREG LEBEDEV

    Mr. Lebedev. Thank you, Mr. Chairman. The chamber very much 
appreciates the opportunity to testify and applauds this 
committee for its recognition of the importance of Africa as a 
destination for American business.
    To be sure, global business is a key to American prosperity 
in Africa in our view is an unemphasized market opportunity, 
and it has been for too long. American business and the people 
of Africa can prosper together, but as commercial and trading 
partners and as investors and as consumers, not just as donors 
and the beneficiaries of foreign aid.
    Africa needs sustainable prosperity, and this can only be 
achieved by building and maintaining free market institutions, 
which permit African and American businesses to flourish. The 
U.S. chamber believes that the American business community 
should be there to help.
    Now, some American businesses have been in Africa for a 
long time. You all know that, but too many others are hesitant. 
And it is fair to ask the question why. We wanted an answer, 
and the chamber wanted to learn what factors deter American 
business from a greater engagement throughout Africa, and so we 
teamed with Bairds Communication, which is a leading public 
relations firm in South Africa to conduct a set of interviews 
with U.S. business executives, who work in Africa every day.
    The interviews took place over the course of 2008, so the 
data is pretty fresh. And we talked to about 30 executives, 
most of whom came from Fortune 100 companies. They represented 
a cross section of industries, and the interviews were given in 
confidence so that we could receive very frank and honest 
answers.
    The aggregated results of the survey were put in the 
record. The survey findings, however, are highly significant 
for three reasons. First, the survey quite correctly highlights 
Africa's well-known structural weaknesses: inadequate 
infrastructure, unskilled labor, inconsistent rule of law, and 
political uncertainty.
    These are not trivial conditions, and they need to be 
addressed. But, second and possibly as importantly, the survey 
does not suggest that these conditions are universal to Africa. 
Nothing is uniform in a continent with 14 percent of the 
world's population. These are very serious concerns, but they 
do not afflict all African countries in the same way.
    So, the good news is that real business opportunities 
exist, but they must be identified. And the conditions on the 
ground must be navigated. This is a significant finding for 
both Africans and American business.
    The third finding, however, may be more vexing because it 
is intangible. The surveyed executives reminded us that the 
characterization of Africa, the way the continent is regularly 
described in the mainstream media is grim. It is portrayed as 
if it is one place, not 50 different countries, one place which 
is in a continual state of violent unrest. This is an 
understandably intimidating image, which is rooted in some 
truth but tragically misrepresents the positive conditions and 
opportunities that widely exist throughout the continent.
    So, what is to be done, Mr. Chairman? In our view, there is 
work that needs to be done on both sides of the Atlantic. Too 
many African governments have struggled with a disconnect 
between words and deeds. They say they want more U.S. business, 
and they do. But too many have been unwilling to do those hard 
things to create a welcoming environment for U.S. capital, 
goods, and services.
    African governments must appreciate that they are competing 
with other developing countries and emerging markets for trade 
and investment, which means that they must market themselves 
aggressively and undertake those domestic reforms in education, 
health, infrastructure, and governance, which will attract 
foreign investors. It is the same economic development that 
U.S. cities and states play every day.
    For our part, the U.S. chamber is taking a number of steps 
to facilitate greater U.S.-Africa business relations. For 
openers, we are about to launch a second part to this same 
survey, and this will involve the African governments 
themselves. We are planning a series of interviews with African 
government officials, showing them the survey findings and 
asking how they plan to do the things necessary to attract U.S. 
business. And we will publish the results of that survey as 
well.
    Next, the chamber's affiliated organization, SIPE, that 
which I chair, regularly works in Africa and around the world 
to help reform struggling economies by supporting free market 
institutions. We build business associations. We promote public 
and private governance, and we teach business advocacy. I just 
got back from Kenya, where SIPE hosted a four-country 
conference, which talked about and focused upon the value of 
public/private dialogue, which means to us that government and 
business need to talk to each other every day.
    The chamber can also draw on its strengths and experience 
of American business on the ground through our network of 
AMCHAMs, the American Chambers of Commerce. We have over 100 
around the world, sadly only a handful in Africa.
    Finally, the chamber's new African department will advocate 
for African-related issues, such as the next round of AGOA. 
That was talked about in the first panel. We will also host 
visiting African dignitaries, as we did recently, for the much 
beleaguered Prime Minister Shangara in Zimbabwe. And probably, 
most importantly, we will help American business see through 
the haze of Africa's bad press and navigate a way to the 
tremendous opportunities that exist in the world's last 
untapped markets.
    Mr. Chairman, let me say again that we appreciate this 
forum, which permits a conversation that is very important to 
both Africa and the United States. The real lesson for the 
continent of Africa and for us is that we need each other. The 
American business community needs markets to sell goods and 
services, locations to manufacture, enterprises in which to 
invest, and partners with whom to trade. And we do far too 
little of that with our counterparts in Africa.
    In turn, Africa needs American business, not just for an 
occasional investment, but because we bring employment, 
expertise, model business practices, skills training, community 
development, and an ambitious and honorable approach to free 
enterprise. And we have a cultural connection to the continent 
that no other country can claim.
    Mr. Chairman, Africa is a market which offers tremendous 
potential, and the U.S. Chamber looks forward to working with 
this committee to help overturn the misimpressions and 
stereotypes and create a new era of reciprocal commercial 
engagement between the United States and our many friends 
throughout Africa.
    [The prepared statement of Mr. Lebedev follows:]

    [GRAPHIC] [TIFF OMITTED] T6816.103
    
    [GRAPHIC] [TIFF OMITTED] T6816.104
    
    [GRAPHIC] [TIFF OMITTED] T6816.105
    
    [GRAPHIC] [TIFF OMITTED] T6816.106
    
    [GRAPHIC] [TIFF OMITTED] T6816.107
    
    [GRAPHIC] [TIFF OMITTED] T6816.108
    
    [GRAPHIC] [TIFF OMITTED] T6816.109
    
    Mr. Payne. The chair thanks the gentleman. The chair now 
recognizes Dr. Cook for 5 minutes. Dr. Lisa D. Cook. I am 
sorry, Dr. Cook. She is Assistant Professor of the James 
Madison College of the Department of Economics at Michigan 
State University. Dr. Cook, you are recognized for 5 minutes.

                   STATEMENT OF LISA D. COOK

    Ms. Cook. Thank you, Mr. Chairman and members of the 
subcommittees. Thank you very much for this opportunity to 
testify on the important topic of U.S.-Africa trade relations. 
Just as international trade has been an engine of growth for 
the U.S., it has been for Africa recently. Between 2000 and 
2007, a three-fold increase in global trade with Africa has 
been associated with average annual growth of 5 percent in 
African economies. My research shows and analyzes this reversal 
of decades of economic decline in Africa.
    My main point today is that increased trade in Africa has 
resulted in and can result in better economic outcomes for the 
U.S. and for Africa. Coca-Cola, UPS, Pampers, Jeep vehicles, 
and Intel Technology can be found throughout African. Ethiopian 
and Kenyan coffee, Egyptian cotton towels, and South African 
wine are no longer exotic and are ubiquitous in the United 
States.
    What we know is that the U.S. and Africa are better 
positioned to mutually benefit from trade than at any other 
time in recent history. Reforms undertaken by many African 
countries in the late 1980s and 1990s contributed to high 
growth rates and Africa becoming more integrated into the world 
economy. AGOA has also opened up trade with Africa. Partly as a 
result of U.S. and African policies between 1999 and 2008, 
exports to Africa nearly tripled, and imports from Africa 
increased six-fold.
    Trade with the U.S. has been interrupted by the financial 
and economic crisis. Exports to Africa shrank by 11 percent 
between the first quarter of 2008 and the first quarter of 
2009, while imports from Africa fell 57 percent over the same 
period. The downward spiral can be swift and deep. Declines in 
demand and in commodity prices lead to lower incomes and 
government revenue, which in turn lead to lower spending on 
health, education, and poverty reduction.
    Further due to the financial crisis, trade finance in 
Africa has contracted sharply or has become prohibitively 
expensive. Despite the economic downturn, U.S. exports to 
Africa rose in several categories, including footwear, 
electronics, and transportation equipment. And these exports 
have been steadily increasing in recent years.
    U.S. export activity has generated positive spillovers for 
African firms. For example, American Plastics Technologies, a 
small equipment manufacturer in Illinois, has partnered with 
Alpha Fluids in Lagos, Nigeria, which will produce IV fluids, 
medical beverages, medical drips, and bottled water for Nigeria 
and ultimately for West Africa. Direct opportunities for 
employment, that is 40 new jobs at American Plastics, and 
indirect opportunities for suppliers--that is 16 firms in the 
U.S.--have been created on both sides of the Atlantic. 
Nonetheless, trade with Africa is not perfect. On average, it 
costs almost double the amount to ship a container from Africa 
as it does from an OECD country. It takes five to six days to 
process exports and imports in the U.S.
    For Chad, exports take 78 days to process, and imports take 
102 days on average. Infrastructure, governance, and the 
general business climate continually hinder Africa's potential 
for international trade. Problems with AGOA implementation and 
well known, such as limited composition of exports, which are 
largely concentrated in energy and textiles.
    A host of policies, practices, and institutions related to 
trade must be addressed in order to maximize the gains from 
U.S.-Africa trade. The extent to which these gains may be 
realized will depend on many factors, including the avoidance 
of protectionist measures on both sides of the Atlantic.
    Finally, trade and aid are not mutually exclusive. U.S. aid 
agencies have been critical in connecting American firms to 
partners in Africa. Ex-Im Bank guaranteed the loan of $16 
million to support the American Plastics Partnership mentioned 
earlier. Nora Bannerman exports thousands of shirts from Ghana 
to Ross Stores, one of our largest discount clothing stores, 
with the help of USAIDS West Africa trade hub.

    Given increasing claims on the resources of developed 
countries in the short run and considerations of sustainability 
of development in the long run, increasing trade between the 
U.S. and Africa may produce significant spillovers for Africa's 
development for many years to come.
    To conclude, U.S.-Africa trade has increased markedly in 
recent years. This has created growth opportunities in both 
places. Trade with Africa has also created significant 
opportunities in other places too, such as China and India. 
Given this recent experience of dramatic growth in Africa, now 
is an especially important time to augment our relationship 
with Africa. Thank you for your indulgence and your work on 
this important issue.
    [The prepared statement of Dr. Cook follows:]

    [GRAPHIC] [TIFF OMITTED] T6816.110
    
    [GRAPHIC] [TIFF OMITTED] T6816.111
    
    [GRAPHIC] [TIFF OMITTED] T6816.112
    
    Mr. Payne. Ms. Tandy.

                    STATEMENT OF KAREN TANDY

    Ms. Tandy. Good afternoon, Chairman Rush, Chairman Payne, 
Ranking Members Radanovich and Smith. Thank you so very much, 
along with the other distinguished members of the subcommittee, 
for inviting Motorola to testify today. By way of background, 
Motorola operates in more than 100 countries around the globe. 
Fifteen countries in Africa are included among those.
    We opened our first office on the continent of Africa 40 
years ago in Nigeria and benefited from hiring locally, 
utilizing the creativity of diverse cultures and individuals. 
We have learned that localization is the only sustainable 
growth-oriented business plan for Motorola in Africa. The U.S. 
private sector understands that to grow our business in Africa, 
we must be full partners outside of our narrow business 
interests. Being good corporate citizens means helping 
communities solve problems, whether those problems involve 
technology, infrastructure, health, and educational needs, or 
issues related to public safety.
    Providing the proper tools and technology solutions for 
governments to communicate effectively and securely creates and 
fosters a stronger environment for community and business 
development. A country's economic and social successes are 
inextricably linked as these committees well know. 
Unfortunately, talent and capital sometimes depart the areas 
where they are needed most because of the lack of personal 
safety of poor health and education services.
    And our experience in Africa has taught us that this is one 
of the key problems on the continent. But Motorola has the 
technology to link different sectors of a community and regions 
together to help address some of their most critical public 
safety concerns and support a more stable business climate, 
whether it is supplying radios for UN mission in the Sudan or 
investing in the future of Africa by connecting privileged 
schools with disadvantaged schools through our canopy wireless 
broadband technology.
    Today, Motorola has offices in Nigeria, South Africa, 
Egypt, and Morocco, with an operational presence in a number of 
other countries from Algeria to Rwanda. Our wireless technology 
and solutions and services are used by most police and public 
safety forces throughout all of the African countries as well 
as the African and foreign peacekeeping forces participating in 
missions throughout the continent.
    In the private sector, Motorola supplies secure 
communications networks and equipments to oil companies, mining 
operations, and agricultural projects to enable pipeline and 
other field operation security and communications, all of which 
contribute to the economic development of Africa.
    Motorola has been working with mobile telephone networks, 
which is one of the widest operations of mobile communications 
throughout Africa. We are also working with our carrier 
partners in Uganda, Ghana, and Nigeria to improve the quality 
of service for mobile phone subscribers. In Morocco, we are 
working with one of the carriers, Wana, the telecommunications 
arm of Morocco's biggest conglomerate, ONA, to pilot a WiMAX 
network, which we launched this spring. And that has the 
potential to deliver broadband service to a wider subscriber 
base of citizens in a more cost effective manner.
    In Nigeria, we have continued to expand the mobile phone 
networks for M-tel, Zain, and regional providers over the past 
few years to connect Nigerians countrywide.
    Another valuable asset that Motorola contributes to Africa 
is our time and our knowledge. Motorola is working with 
government agencies to help revolutionize the delivery of 
quality rural healthcare and education through delivery models 
that can be replicated throughout Africa at relatively low 
cost.
    To address the shortage of doctors in South Africa, 
Motorola, the Medical Research Counsel, the State Information 
Technology Agency, and the Limpopo Health Department joined 
forces in a wireless broadband network trial. In that trial, we 
connected three hospitals and one clinic. Video cameras were 
included that enabled the doctor to examine and diagnose a 
patient more than 60 miles away. All the vital data, such as 
heart rate and blood pressure information, were submitted to 
the doctor for that diagnosis as well. And there are already 
plans in progress to expand to other hospitals and clinics in 
the Limpopo Province.
    Similarly, through our work with the government and other 
South African entities, Motorola has helped launch the Ulwazi 
e-Learning partnership to improve local education by addressing 
the issues of teacher shortages and lack of resources. This 
project connected a privileged school together with four 
disadvantaged schools so that one teach could reach 100 
students at once. And to make that happen, Motorola funded the 
computers, the web cams, the sound equipment, the white boards, 
in addition to the entire wireless broadband network. We are 
now attempting to replicate this in discussions with the 
government in Rwanda.
    Mr. Chairman, Motorola is proud of its leadership role in 
investing and fostering the long-term relationships and 
economic growth in Africa. And we look forward to working even 
more closely with you and the U.S. government to help support 
your efforts in bringing the United States and Africa closer 
together both economically and socially. Thank you.
    [The prepared statement Ms. Tandy follows:]

    [GRAPHIC] [TIFF OMITTED] T6816.113
    
    [GRAPHIC] [TIFF OMITTED] T6816.114
    
    [GRAPHIC] [TIFF OMITTED] T6816.115
    
    [GRAPHIC] [TIFF OMITTED] T6816.116
    
    [GRAPHIC] [TIFF OMITTED] T6816.117
    
    Mr. Payne. Thank you very much, and let me thank the panel 
for your excellent testimony. And we will open our questions 
with Congresswoman Watson.
    Ms. Watson. I want to thank the first panel and the second 
panel as well, and I am reminded, and my colleague Lynn Woolsey 
will remember, California used to have trade offices in South 
Africa, and we opened one on the west coast of Africa. And, of 
course, due to the budget, we no longer have them in a new 
administration.
    However, it is a burgeoning field for us to really look at, 
as you are doing, Ms. Tandy, and the rest of you have reported 
on. I would like to, number one, I think what really keeps 
investors from the U.S. away is that they don't really 
understand business in Africa, and there is not a whole lot of 
advertising. So, in September during the Congressional Black 
Caucus, we are holding our workshops on investing in Africa, 
but we have to train investors first because they have to know 
that it might take five years before your money can turn around 
and have a benefit.
    One of the things that we notice in South Africa, and there 
is a kingdom called Bafulking, discovered a platinum strip, and 
the queen mother says I am sending my young people west so that 
they can learn how to mine that platinum and the money can go 
directly to our villagers. And they can build the new shining 
city on the hill. So, there are many different things going, 
but I would like to--and this is directed to anyone on the 
panel that would like to respond. How can we use commercial 
investment in agribusiness to endure when climate change is a 
reality? Some people want to say it is not, but--and you know 
there are certain areas of the continent that have been under a 
drought for 7 to 10 years.
    But what actions can be taken now to mitigate the negative 
effects of climate change by U.S. government and by businesses? 
Anyone want to take that on? OK, Mr. Hayes.
    Mr. Hayes. Sure. Thank you, Congresswoman. I have been to 
Bafulking as well and met with the King. It is also as you 
know, the highest--one of the highest incidents of HIV/AIDS in 
the world as well. So it is just tremendous challenges there, 
and I applaud that program.
    Ms. Watson. Is that the Daimler Chrysler program?
    Mr. Hayes. No, I actually lead the Daimler Chrysler 
delegation program. I am talking about the Queens program and 
the education. So thank you, yes, we were--the Corporate 
Counsel on Africa was leading that.
    Ms. Watson. Right.
    Mr. Hayes. Thank you. The issue of agribusiness is an 
area--and my concern is that I think the United States has a 
critical challenge on Africa, partly because of China, partly 
because of the economic partnership agreements, which I think 
is another form of colonialism from Europe that are coming in. 
And also, I think your point is--and one of the problems, I 
think that would happen on interviewing CEOs is asking have you 
ever been to Africa. Most CEOs have never been to Africa. They 
are the ones that ultimately--they have their own kingdoms. 
They make the decisions of where they go, and until we get more 
corporate executives exposed to Africa----
    Ms. Watson. I just have to tell you this. Let me interrupt 
you for a minute. When I first came back and came to Congress, 
I was number 45 out of 45 on foreign relations, and I would 
hear our members talking about Africa and there is a program 
here that is working real well; we are going to pick it up and 
put it here. And I am saying do you really understand that 
Africa is a continent----
    Mr. Hayes. Right.
    Ms. Watson (continuing). With 54 nations on it, 22,000 
languages--22,000 tribes, 16,000 languages, and they are so 
different. And so so many, too many people don't really 
understand how villages work, how tribes work, how communities 
work.
    Mr. Hayes. That is exactly right and there are also a 
number of countries who are doing things very well and still 
not getting U.S. investment.
    Ms. Watson. Yes.
    Mr. Hayes. They meet the requirements at MCC. Botswana is 
another great example where they are doing all the right things 
and still not getting the investment. And so I think the 
questions have to go deeper, more into U.S. attitudes and so 
forth.
    In terms of agribusiness, I think there are areas in which 
to help our own economy, we have to look at what are the areas 
of Africa, where the United States has a competitive advantage, 
and how do we help those industries develop more? Agribusiness 
is very key to that, as is infrastructure. We can compete with 
anybody in the world on an equal playing ground. We also, I 
think, can help the villages far more effectively than almost 
any country in the world. And so I think that we have--where 
the government and the private sector can work together in 
addressing the issues. And as you noted my written statement, 
climate change is, I think, critical. And we have to address 
that. We have to plan that now and not be into another reaction 
to a failing, but planning an impact how we can do that.
    I think the agribusiness sector, I think our research 
universities can face that, now can work with Africa, not 
simply for but with Africa, and make a huge difference. But I 
think the government has to also come out and say this is 
important to us and talk to the American government and say to 
the private sector, it is time you became more engaged, and we 
are going to help you become more engaged. We are going to help 
you become more engaged by having more access to financing. 
There is hardly an American bank that is willing to finance an 
American business to work in Africa. So we have to look at 
those issues as well. I have gone on too long so I----
    Ms. Watson. Thank you. If I can take another minute, Mr. 
Chairman. I want to address this to you, Ms. Tandy, and your 
company has done, as you described, a great deal of phenomenal 
work in Africa. And when you expend broadband coverage, there 
is a problem that jumps up, and the cost of Internet access is 
rarely the determining factor in purchasing or using. So how 
effective is an expensive broadband network throughout Morocco 
when the majority of citizens do not have computers?
    Ms. Tandy. Thank you for your question. It is a trial in 
Morocco, but the importance that we found is that extending 
broadband is really about connecting everyone. And the trial is 
to bring mobile broadband, the ability to move data as you 
move, and these--it is significant that this trial has come to 
Africa. This is a growing and developing technology around the 
world that has not found its footing everywhere yet. So I think 
that this is a doorway for Africa, and certainly extending 
broadband is part of moving an entire culture forward down the 
road.
    Ms. Watson. Would your company be willing to, say, donate 
laptops to the village schools so every child in their primary 
education can become familiar? Now, expense is a real problem. 
The cost if it is a real problem, so do you have any programs 
like that, where you would donate and help young people become 
accustomed to using this modern technology as they are in Iran?
    Ms. Tandy. Thank you for your question. We actually are, as 
I mentioned, supporting schools in South Africa, and that is 
not the full extent of our support to building that kind of 
capacity. We have, through our foundation, provided a great 
deal of product-in-kind support as well as funding, which I can 
detail for you later. But it includes a school for 
entrepreneurship and supporting also the South African Women's 
Entrepreneurship Network with grant money to them as well as 
the Pathways Education Center in the eastern cape of South 
Africa. Whether that includes laptops specifically in those 
instances, I would have to get back to you on that.
    We have actually contributed a great deal of product and 
in-kind and cash contributions, whether it was for laptops, the 
ability to move data by phones, by cellular phones off of the 
cellular wireless infrastructure, as well as phones for health, 
which we contributed millions of dollars to as well as--excuse 
me, I was--we have contributed a great deal of product and 
support for that. And we have contributed millions of dollars 
to Product Red, and over almost $28, $29 million to Product 
Red. So, how much of all of that gets converted into laptops 
for youth, I will determine and get back to you.
    Ms. Watson. Well, I just want to say, I am sure the world 
is watching and wants to comment on the way that technology is 
being used in Iran to alert the rest of the world as to what is 
going on. And I think the more, as you say, hookup throughout 
this globe, what is happening in countries, the more 
knowledgeable we can become and the more we can have impact in 
a positive way in these developing nations.
    And I just want to end with you, Dr. Cook. We have had 
hearings in our Oversight Committee and, also, in our Foreign 
Relations Committee, and we are looking at the way NGOs are 
working, the way AGOA is being used, the Millennium Fund, and 
so on. What can we do under this administration to improve on 
what needs to be done in Africa to be able to motivate 
Americans, and particularly African-Americans, to go back to 
the source and to help these developing nations? I thought you 
might just want to summarize what we can do.
    Ms. Cook. Thank you for your question. I think one of the 
first things that can be done--you will forgive me for being an 
economist--and that is make sure we have data on what works. We 
are just getting data from the Millennium Challenge 
Corporation, and I think it is going to be critical that on the 
face of it, it certainly seems like it is working; it is doing 
good things. How well it is working, what incentives countries 
are responding to is going to be critical to know. So that is 
the first thing.
    The second thing in terms of getting people interested, I 
will report from my own courses that I teach on Africa, on the 
economics of Sub-Saharan Africa. I don't think we need to do 
much to get people interested. There are so many people signing 
up for my courses it is astounding, and my colleagues don't 
believe it. They think I am making numbers up.
    So, I think what we have to do is to show more in terms of 
the media, the heterogeneity of Africa, that it is not just one 
country. Colleagues here have said that. It is not just one 
country. Well, actually you have said it as well. That there 
are places where there can be contributions made, and they can 
make them in very different ways. They can make them as 
volunteers through summer opportunities. They can do it through 
study abroad. Michigan State has the largest study abroad 
program of any public university. So, I think that these are 
definitely ways that we can connect and try to get students to 
give back, or young people in general to give back.
    Ms. Watson. You know what I find is really at the core of 
this is the follow through. We get loads of people who are 
interested, and they come and they sit in the workshop. But 
when it comes to investing your money in a continent that is so 
far away and so unfamiliar to many people, that is where the 
line is stopped. And thank you, Mr. Chairman, for the extra 
time. That was just a comment. You don't need to answer it.
    Mr. Payne. Thank you very much. Mr. Smith.
    Mr. Smith. Thank you very much, Mr. Chairman. Thank you all 
for your testimonies and your great analysis of so many issues 
vis-`-vis Africa. Mr. Hayes, in reading over your book, which I 
think really is a comprehensive attempt to try to really move 
the ball forward, you point out on chapter seven on the health 
care part, that the business of health in Africa predicts a 
doubling of the African health care market by 2016, and you 
talk about the importance of the private sector. You talk about 
not-for-profit NGOs as well as commercial and for-profit. And I 
am wondering--and I am sure this is part of the not-for-profit 
part--but the faith-based health care initiatives that the 
Catholic church, the Anglican church and so many others do. We 
found and continue to find that Petfar has worked as well as it 
has worked primarily--not primarily, but to a large extent 
because of the faith-based health care infrastructure that is 
preexisting and very easily could be built upon.
    And it seems to me--and I have visited myself, and I know 
Don has done this as well--many of the Petfar initiatives, I 
remember one in Uganda where a church-based, in this case, 
Catholic church-based and the ARVs and the prevention programs 
and everything else, mother to child, through an army of 
volunteers under the rubric of or under the canopy of a Lady 
of--I am trying to remember the name of it, but it will come to 
me. It was just amazing how they were able to mobilize so many 
people.
    And it seems to me the best bang for the buck and the 
investment, you know, at least to some extent needs to be 
focused on that. You might want to speak to that.
    And you, also, on infrastructure, I think you make an 
excellent point about unfocused and minimal U.S. government 
resources promoting infrastructure development dampen and 
inhibit U.S. private sector engagement in Africa. And then you 
pointed out that the EU has done much more and others. And 
maybe all of you might want to speak to that because I think 
the Millennium Challenge has done some good, but it needs to do 
much more. Needs more money to do it.
    I will never forget one of my many trips, being told by 
some farmers, and this was in DR Congo, that they could grow 
anything. They just can't get it to market. And then we rode on 
some of the roads that they wanted to take their products to 
market, and it was like being on the moon. I mean the huge, 
huge potholes were incredible. We are going around them and 
through them.
    So, if you could speak to that issue of infrastructure. As 
you pointed out, it is the backbone of Africa's development. 
The AU has found that. I do have a few other questions but 
just----
    Mr. Hayes. Sure, I couldn't agree with you more on the 
faith-based institutions. I think they have made all the 
difference in Petfar. They are important. They are vital in 
terms of getting to villages, getting to the people. I think 
they have been very important. Our own institution, as you may 
recall, is the organization that drove Petfar through. I was 
the president of that organization that created a separate non-
profit to drive that legislation through, and I am very proud 
of the fact that it is working. I would agree with you it is 
working very well. I think again it is a great example of what 
has been done.
    I think--and you also gave me too much credit. It is not my 
book. Actually, my organization certainly, but over 100 
companies worked together on this over 3 months really trying 
to--took it very seriously. It was the health-related 
companies, particularly, saying that look, there is a great 
field to not simply address the illnesses, but there is a great 
market to build a health-based system throughout Africa, the 
hospitals, so they are much more able to care for their system. 
And it is simply not responding to health crises but in fact, 
there is an opportunity for U.S. businesses to help build 
health institutions so that they are healthier in the long 
term.
    On infrastructure, that is, I think, the greatest need in 
Africa. I think all of us recognize that. It is also an area 
where, in agreeing with Dr. Cook, I don't think there is a lot 
that we need to do. There is just some spatial things that we 
need to do that would open it more for the U.S. infrastructure 
industry to make a difference in Africa.
    The Ambassador for Equatorial Guinea came to me, and I was 
talking about why are we doing China. She said well, China can 
do it at one-eighth the cost of the American companies. And I 
said yes, but do you want to repair the roads eight times more 
for that cost.
    I think that with concerted public/private cooperation and, 
particularly, we can get jobs for Americans as well as create 
infrastructure in Africa which creates jobs for Africans. So I 
think there is a real role for cooperation and public/private 
partnerships. Did that take your questions?
    Mr. Smith. No, thank you. Appreciate that. And let me just 
ask you a couple other very brief questions. On microcredit 
lending and microfinancing, what role do you all think that 
plays? You know, we spent a little over $200 million, but 
obviously it is helping the poorest of the poor in many cases. 
But it seems to me at some point, that begins to build an 
infrastructure and an entrepreneurial spirit among some that 
could be translated into a bigger and better Africa in terms of 
its economic growth.
    And on trafficking, I asked this of the first panel. And 
another issue related to human rights would be labor rights. We 
know that China has an awful record when it comes to--they 
don't have any independent labor unions. There are a lot of 
wildcat strikes now going on in China because--and they are 
even focused against U.S. corporations because they want what 
Lech Walesa and what the United States and many other countries 
almost--he promoted what we kind of take for granted. That is 
fundamental rights of a labor union, collective bargaining, and 
OSHA type regulations.
    As Africa builds up, what role do you see labor unions 
playing in Africa's development so that the worker, the men and 
women on the ground, who do the hard work, get their fair share 
of benefits?
    And again, on trafficking, you know, it seems to me we all 
have to be very, very aggressive in integrating trafficking 
concepts, minimum standards as we prescribe in the TIP report 
and our law. You might want to speak to that as well because I 
think very easily a workforce can be exploited, while the CEOs 
and others may look askance.
    Ms. Cook. Thank you for these questions. I will start with 
your question about trafficking. I think you have hit on 
something extremely important, and I think that the way to end 
trafficking or at least minimize it is to provide opportunities 
for those who get trafficked. So, if you are providing 
opportunities for young women, who would otherwise be working 
in, say, footwear factories, who have more independence because 
they have jobs, I think this is the way to approach it. And I 
think this is the only way that is going to minimize the 
incentive to round up the vulnerable and put them through this 
pipeline that is global.
     On the second issue on microcredit, I think you touch on 
something very important, again, and this is something that is 
the focus of my research. I think microcredit can be 
transformative, and I have worked on it in Nigeria and in other 
places. And once again, it provides some of the most vulnerable 
people with independence of some sort. So, there is an 
incentive for them to invest in the economy and think outside 
the box or think inside the box, just so they have the tools to 
be able to do them.
    And I think that microcredit actually is not just sort of 
the NGO that we are often talking about, the Gramean model that 
we are more familiar with. Most of the banks in most of these 
countries are microcredit, and anything we can do to support 
them, I think would be useful. Support them in terms of 
supervision and consultations, but otherwise I think it can be 
transformative for the very reason that you have suggested.
    Mr. Lebedev. I think it is useful to add, and it also 
touches on some of the things that Congresswoman Watson talked 
about earlier. Whether it is microfinance activity, which can 
be transformative, whether it is American or other business, 
that changes the nature of the communities in which they work, 
there are a variety of developmental and commercial activities 
that have for years affected and touched parts and pieces of 
these countries.
    The dilemma is nothing connects them very well. These 
become too frequently success stories, but isolated success 
stories. And I think this is not an observation of one or the 
other. You got to do all that, but what we also have to do is 
recognize that on any given day in any one of these countries, 
the inattention or indifference of their government can wipe 
out all of this progress.
    And so, at one level, we have to continually affect 
positively the communities in a variety of ways, work through 
the faith-based organizations. But at the same time, use the 
incentives of the MCC, which is designed to focus on those 
governments, in effect, that are leaning in the right 
direction, that are sending the right signals with respect to 
the way they choose to govern and lead their countries. We 
cannot lose sight of the fact that pressure on governments is 
the one way that we can preserve the gains that we will make 
selectively and in small ways throughout many of these 
countries.
    Mr. Hayes. There is one other part to that, too, and I 
think Mr. Lebedev just hit on it too. Microfinance is very good 
in a number of areas, but there is a gap in the need for 
financing for everything between microfinancing and the giant 
corporations. The people who need the financing to build the 
businesses in the large urban areas, especially, there is very 
little financing available from either the African banks and 
certainly almost none from the U.S. banks. We have to find a 
way--and in equity funds, we will take a fund of $10 million, 
you know, often invest $10 million or more. But the investments 
that we need to be making are the $25,000 to $50,000, $100,000 
for small- or medium-sized businesses to make a difference. 
That is lacking.
    Mr. Smith. Can I just ask one final question?
    Mr. Payne. We really----
    Mr. Smith. Running out of time?
    Mr. Payne. Yes, I gave you about 12 minutes on this last 
one. So I better let Chairman Rush--but I think the points are 
certainly well taken. I wish we did have time to really go 
further in it, but Mr. Rush.
    Mr. Rush. Thank you, Mr. Chairman. I think that both of 
you, Mr. Hayes and Mr. Lebedev, your responses have been quite 
pertinent and informative, especially as it relates to the 
small- to medium-sized businesses. And in your answer to Mr. 
Smith's question, you answered the first question that I had, 
but I do have another question, and it is a general question. 
And I would like to ask the four panelists just to respond.
    And I want to focus on the diaspora. In the U.S., it has 
been estimated that we got 1.4 million African immigrants 
living in the United States, and the overwhelming majority of 
them are educated, and they are entrepreneurial in a lot of 
different ways. As a matter of fact, in some of our countries, 
in my district in some of my communities, they are leading 
entrepreneurs, owners of small retail businesses and 
professional services in my district. They transfer, as has 
been estimated, about $40 billion back to Africa to support 
families.
    Now, these are individuals who have a strong understanding 
of the culture and economic environment of their home 
countries. They understand American business, American know-
how, and they have been able to be successful businesses here 
in this country.
    How can we engage that element, that force, in a positive 
way? I think we should call upon them and encourage them to get 
involved and not just leave it up to the folks back home. Would 
you all respond to that please? Ms. Tandy, you can comment also 
on this. Start with----
    Ms. Cook. I think this is a really interesting and almost 
intractable problem it seems because, for instance in Nigeria, 
I was advising the President Obasangu with Jeffrey Sacks 
before, and one of the things that Obasangu was trying to do 
was come up with a list of all professionals, all Nigerian 
professionals living abroad. The first statistic that came 
across my desk was that a quarter of the health service in 
Great Britain was staffed by Nigerian doctors, and the question 
is whether this is an underestimate rather than the true 
number.
    But they are definitely everywhere. High human capital 
everywhere. The economists published an article in, I think it 
was about 1996, saying that the most educated group--it is a 
very, very small group. The most educated group coming to the 
U.S. is from Africa, and that is a very small number of visas, 
very small number of people coming. That is a talent pool that 
can be tapped, and I think it can be tapped in several 
different ways.
    Congresswoman Watson was talking about the introduction to 
Africa, and I think this is where they can be critical. I will 
not take my friends to--I will take my friends to Africa in a 
sequence. They have to get used to the environment before they 
actually sort of fall in love with Africa as, I think, everyone 
eventually does.
    But I think this is where they are going to be critical, 
critical in interpreting signals, critical in interpreting the 
linkages that are able to be tapped, and also, we have to be 
careful because just as you see in Iran, those people who have 
been outside and educated and are trying to make their way back 
inside, sometimes they are not welcomed and embraced as we 
think they might be. So we have to be very careful about how we 
are leveraging their services, their knowledge. But I think 
there is something there to be tapped nonetheless.
    Mr. Hayes. I would also say that I think right now the 
diaspora is probably the leading investor in Africa, but it is 
going by way of remittances and by the millions and overall 
billions when you look over. So it is going back to families, 
but the amount is enormous. Now, if you could transform that 
into investment as opposed to sustenance of families.
    I seem to be following Congressman Payne everywhere he goes 
in Africa lately, and he was in Zimbabwe right before I was, 
but the--as well as a few other countries. But when I went to 
Zimbabwe, I was staggered by the fact that the bank, they said 
look, the second largest investor right now in Zimbabwe 
diaspora community, and I had no idea there was such a large 
Zimbabwe and diaspora community. You know, I would assume it 
came from South Africa. He said no, Britain and then followed 
by the United States, there is more remittances back to 
Zimbabwe through the expatriate community, the diaspora than 
any other country.
    So how do you translate that though into real investment? 
If you could translate that into real investment, the amount of 
money they are putting in is much more than some countries are 
putting in. So that is the challenge. I don't have an easy 
answer for you.
    Mr. Lebedev. Well, Mr. Chairman, it is actually a very 
interesting question that you raise because the diaspora, and 
it is really multiple diasporas since there are many countries. 
But they really are a great resource, and to Dr. Cook's point, 
they bring in a cultural and emotional understanding to the 
marketplace that in fact would be invaluable.
    One of the things the chamber is doing right now is working 
with folks who are part of the Liberian diaspora who are moving 
back, and we have a project ongoing that is hoping to link them 
with existing businesses. So in a manner of speaking, they 
become a technical and cultural resource as foreigners try to 
set up enterprises there using them as part of that process. 
They have the potential to be invaluable. It also is an 
opportunity for them because they can become stand-alone 
enterprises in their own right as they are part of a process. 
But I think it is a question that is worthy of far deeper 
exploration that you raise.
    Ms. Tandy. Thank you, Mr. Chairman. Motorola is actually 
focused on trying to prevent the diaspora. We are focused on 
the e-learning and bringing opportunities to rural Africa to 
connect through distance learning and stay home and build and 
invest in Africa and build Africa from within.
    So I am in a poor position to address the possibilities of 
the community, the larger community within the United States 
and how to leverage that. We are very focused on investing 
within the population within Africa.
    Mr. Payne. Thank you. Let us see. Ms. Woolsey.
    Ms. Woolsey. Thank you, Mr. Chairman. Mr. Lebedev, could 
you do me a favor and expand on your meaning of when you 
referred to Africa's bad press and then, a little bit later, 
African stereotypes? I kind of thought I knew what you were 
talking about, but then I thought well no, I don't know what 
you are talking about. What does the U.S. Chamber of Commerce 
mean by that?
    Mr. Lebedev. What I mean by that is that too often the 
whole continent, as many of us have said, the whole continent 
tends to be misunderstood as one homogeneous entity when, in 
fact, it is more than 50 countries with their own cultures and 
experiences. The problem is there has been a history of 
violence and disruption in a number of African countries as we 
all know.
    The unfortunate aspect is that the media tends to portray 
that as just Africa, as if those bad experiences that happen 
periodically and in fact are ongoing right now in certain 
places, is a statement about the entire place, not a particular 
incident or a particular country. And it is that 
misrepresentation, that stereotype of a continent, if you will, 
which we believe misrepresents the opportunities that are there 
and badly, and does a tremendous disservice to those competent 
African government officials, those superb African business 
people who, in fact, deserve the opportunities that are 
presented by foreign direct investment trade and other business 
initiatives.
    Ms. Woolsey. OK, thank you very much. Dr. Cook, when you 
spoke of the product, the American product that is going to 
Africa, I had this vision of landfills with all of our--like we 
have in the United States of all of our throwaway products. Is 
there any work going on so that Africa doesn't repeat all of 
our same mistakes?
    Ms. Cook. So I would share your concern, but I would have 
to beg ignorance here. I don't know the specifics of the deal, 
but I would have the same concern about plastic bottles or any 
kind of packaging winding up in large landfills in Africa. But 
I would agree that this would be an important component and one 
that we should pay attention to when striking these deals.
    Ms. Woolsey. OK, well do you--and, Ms. Tandy, you may want 
to respond to this. Are we providing Africa with third- and 
second-generation technology, or are we getting there with the 
newest technologies, or is there an affordability piece of that 
that we need to take into consideration?
    Ms. Tandy. Motorola has been working very closely with our 
carrier partners throughout Africa, and Africa is receiving the 
current technology. And, as I mentioned, the future technology 
has now entered Africa with the WiMAX trial that just launched 
this past spring. So I think Africa is at the same level as the 
rest of the continents. The rural segments of Africa and the 
infrastructure that needs to be built out into connecting the 
rural unconnected is certainly a challenge and a key focus for 
the carriers as well as for Motorola.
    Ms. Woolsey. Do you see any future for our clean 
technologies being a product, an import to Africa?
    Ms. Tandy. We actually--as a company, we have had some 
projects in Africa that I could provide you some more 
information about. Some wind-powered projects in Namibia as 
well as solar powered infrastructure that one of the mining 
companies has utilized in the rural area of South Africa. So we 
do see some potential there.
    Ms. Woolsey. Anybody else?
    Mr. Hayes. Yes.
    Ms. Woolsey. Yes?
    Mr. Hayes. There is actually enormous potential on the 
renewable energy resources. Germany and Sweden are already 
doing quite a bit in Africa. South Africa is turning to a lot 
of renewable resources in terms of its planning. So there is 
just an enormous market there also for U.S. companies of 
smaller to medium-sized to become engaged with Africa. Again, 
the issues of financing, where are they going to get it to get 
in, and government coordination.
    Ms. Woolsey. Thank you very much.
    Mr. Payne. Thank you. Let me ask a question or two. As we 
know, the U.S. imports primarily are Nigeria--well, natural 
resources in generally speaking either mined products or oil 
and so forth. And I am just wondering if there are, in your 
opinion, any other promising markets? For example, agriculture 
is, I think, underutilized. For example, in Zimbabwe, they are 
getting ready to do a second crop. The first crop was pretty 
good, but the second crop they expect to be very good. In 
Nigeria, you could probably do three crops.
    Are there any--and livestock with cost of commodities 
increasing. At least a year or so ago, they were very high. 
They dropped a bit, but commodities are--and the whole, you 
know, agriculture business, is something that is going to be a 
strong industry. Has there been any work on the part of the 
business, Steve, that maybe your corporate counsel or the 
chamber that are trying to--I know you are in technology, Ms. 
Tandy, so you wouldn't be telling people--you can't grow 
computers. So I am just talking about the--what about that? 
Have there been a stressing of that to African countries?
    Mr. Hayes. There has been on our part, and--but the African 
countries know they can grow anything. Every country can 
produce agriculture. As you know, Zimbabwe could feed the 
continent under the right circumstances. Again, it wouldn't 
take too much to change that.
    The issues are on two different ends. One is the secondary 
and tertiary benefits on agribusiness, canning and so forth. 
That production capacity is lacking. They could sell to--with 
the production capacity, they could sell to the United States 
market very easily. And so that is another area where the 
United States companies, and certainly in California with the 
canneries, could expand again with the right inducements and 
the right encouragement.
    The second problem though again is the agricultural 
subsidies here that prevent a lot of--that prevent competition 
from Africa. So, we have to also address the subsidy issues 
that Senator Luger has also pointed out. But Agribusiness is 
greatly underutilized. I am concerned that AGOA is too 
dependent on textiles. We have to broaden that, and yes, so I 
have said enough.
    Mr. Payne. I agree with Senator Luger. I don't know who 
agrees with whom first because I was talking about ending 
agricultural subsidies, you know, right when I first came to 
Congress. And I think we are finally hopefully going to get 
around to that. I mean it is going to be slow and people 
kicking and screaming, especially from our farm belt. But I do 
see hopefully that subsidy, because it really is in opposition 
to WTO and other world organizations.
    I wonder, Ms. Tandy, if there is any possibility for 
technology to grow in Africa. For example, I understand that 
Rwanda was interested in trying to see if they could wire their 
country to be sort of a center for broadband or, you know, are 
there any possibilities for that kind of--even why not have a 
call center in Ghana, where they speak English, or Kenya? You 
could probably less detect it than the Indian saying I am Sam, 
with this I am Sam, and I live down the street so to speak. Is 
there any possibility of having call centers in Africa, in your 
opinion?
    Ms. Tandy. I don't know whether that has been explored. 
However, it makes sense that it is certainly possible in 
Africa. There are tremendous number of entrepreneurs springing 
up throughout the continent that we are also investing and 
giving grant money too, and technology. So, there is no reason 
why a call center, as far as I know, couldn't be part of the 
future in Africa.
    Mr. Lebedev. I would echo that, that Africa has a wonderful 
resource of English language speakers. Certainly there is some 
market maturation in India right now, and one could argue that 
there might be cost competitive advantages in Africa. So I 
think that, to your point and Ms. Tandy's point, I think that 
is a sensible area in which to look.
    Going quickly to your question about agribusiness, I think 
also, again, as Steve said, creating the right inducements to 
get the right companies there and even setting aside the 
barriers to shipping back to the United States. There is a 
billion people there that need to be fed, and too many of these 
countries are already net importers of food. And for sure there 
is an opportunity for domestic consumption of a variety of 
things that big companies can help grow there on the spot.
    Similarly, I think you could look at certain grains because 
it is from grains that we can do some very interesting things 
with biofuels. And again, looking forward, these are the sorts 
of things that should be indigenous industries in Africa. We 
wouldn't, you know, it would be nice to have them sort of grow 
from the bottom up some opportunities like that that also 
affect climate issues very directly.
    Mr. Payne. Yes, Dr. Cook.
    Ms. Cook. So I think on the last point that you make, this 
is really perceptive in terms of technology. When I was 
advising the Rwandan government for its first post-genocide IMF 
program, one of the things that I included in terms of a 
recommendation it was taking advantage of the fact that 90 
percent of its phone system was digital. There is no other 
phone system in Africa that could claim that. And this provides 
a number of different opportunities, a number of different 
applications that would be possible through this digital 
system.
    So I think that there are a number of opportunities not 
just with call centers. I was suggesting that it become the 
Memphis of Africa in terms of Memphis being the center of 
FedEx, where FedEx is located. And it is centrally located. If 
you can have high school graduates who could use technology 
really easily, this is a great place to locate that kind of 
application.
    But to go back to your first question about what kind of 
agricultural products might the U.S. partner with Africa to 
develop. Specialty coffee and teas. I was mentioning before 
that Kenyan and Ethiopian coffees are becoming ubiquitous in 
America, and I think that the same is true for Burundi. I mean 
this is a burgeoning market for Tanzania, for other countries 
in east Africa.
    Tourism. So I think that developing tourism is a non-
trivial thing in Africa. I think it could have huge benefits. 
It is a niche market, but it is a niche market just like 
specialty coffees and teas. And I think it is growing by leaps 
and bounds.
    And in terms of other kinds of agricultural products, 
cassava, I think that this is all over Africa. And it has so 
many different applications. It is almost like our garlic, and 
there are so many different things it could be used for. 
Biofuel, starch in clothes, dyes. And I think that if there was 
a way we could help with developing their research to be able 
to use these products, I think we would be doing them a 
tremendous service, and we would benefit from that, too, 
because I think we would learn a lot more from these products 
that we don't have that aren't indigenous to the U.S.
    Mr. Payne. Well, that is good. When you mentioned Memphis, 
I thought they were doing some blues over there. But no, so 
the--let me--I have just been informed that President Dubaki 
just recently connected the first of several fiber optic cables 
in Mombasa. So this seems like they are starting to move 
forward in that regard, and I do think there are tremendous 
opportunities.
    Let me certainly thank the panel, and I thank all of you 
for your patience. Once again we apologize for this day. It 
will be the same tomorrow though and Friday. So you wouldn't 
have escaped it if it was not on this day. And so, we do intend 
to have a follow up.
    Chairman Rush has a strong interest and since his 
jurisdiction is commerce, trade, and consumer protection, we 
are really going to try to work together. This is probably the 
first time this particular subcommittee have dealt with trade 
in Africa, and it just happens that his interests coincide with 
the interest of the Africa and Global Health Subcommittee. So I 
think that we will try to really have some Rush-Payne or Payne-
Rush activities to see if we could kind of stimulate this area.
    And I would like to thank the members who did come and 
stay. Let me just conclude by saying I ask unanimous consent 
from members to submit additional questions for the record, and 
for members to have five days to revise and extend their 
remarks. Without objection, so ordered.
    Secondly, I ask unanimous consent for entering into the 
record a statement provided by Francois Baird about a survey of 
the views of U.S. corporate executives about foreign direct 
investment in Africa. Without objection, so ordered. Thank you 
very much. The meeting is adjourned.
    [Whereupon, at 5:55 p.m., the subcommittees were 
adjourned.]
    [Material submitted for inclusion in the record follows:]

    [GRAPHIC] [TIFF OMITTED] T6816.021
    
    [GRAPHIC] [TIFF OMITTED] T6816.022
    
    [GRAPHIC] [TIFF OMITTED] T6816.023
    
    [GRAPHIC] [TIFF OMITTED] T6816.024
    
    [GRAPHIC] [TIFF OMITTED] T6816.025
    
    [GRAPHIC] [TIFF OMITTED] T6816.026
    
    [GRAPHIC] [TIFF OMITTED] T6816.027
    
    [GRAPHIC] [TIFF OMITTED] T6816.028
    
    [GRAPHIC] [TIFF OMITTED] T6816.029
    
    [GRAPHIC] [TIFF OMITTED] T6816.030
    
    [GRAPHIC] [TIFF OMITTED] T6816.031
    
    [GRAPHIC] [TIFF OMITTED] T6816.032
    
    [GRAPHIC] [TIFF OMITTED] T6816.033
    
    [GRAPHIC] [TIFF OMITTED] T6816.034
    
    [GRAPHIC] [TIFF OMITTED] T6816.035
    
    [GRAPHIC] [TIFF OMITTED] T6816.036
    
    [GRAPHIC] [TIFF OMITTED] T6816.037
    
    [GRAPHIC] [TIFF OMITTED] T6816.038
    
    [GRAPHIC] [TIFF OMITTED] T6816.039
    
    [GRAPHIC] [TIFF OMITTED] T6816.040
    
    [GRAPHIC] [TIFF OMITTED] T6816.041
    
    [GRAPHIC] [TIFF OMITTED] T6816.042
    
    [GRAPHIC] [TIFF OMITTED] T6816.043
    
    [GRAPHIC] [TIFF OMITTED] T6816.044
    
    [GRAPHIC] [TIFF OMITTED] T6816.045
    
    [GRAPHIC] [TIFF OMITTED] T6816.046
    
    [GRAPHIC] [TIFF OMITTED] T6816.047
    
    [GRAPHIC] [TIFF OMITTED] T6816.048
    
    [GRAPHIC] [TIFF OMITTED] T6816.049
    
    [GRAPHIC] [TIFF OMITTED] T6816.050
    
    [GRAPHIC] [TIFF OMITTED] T6816.051
    
    [GRAPHIC] [TIFF OMITTED] T6816.052
    
    [GRAPHIC] [TIFF OMITTED] T6816.053
    
    [GRAPHIC] [TIFF OMITTED] T6816.054
    
    [GRAPHIC] [TIFF OMITTED] T6816.055
    
    [GRAPHIC] [TIFF OMITTED] T6816.056
    
    [GRAPHIC] [TIFF OMITTED] T6816.057
    
    [GRAPHIC] [TIFF OMITTED] T6816.058
    
    [GRAPHIC] [TIFF OMITTED] T6816.059
    
    [GRAPHIC] [TIFF OMITTED] T6816.060
    
    [GRAPHIC] [TIFF OMITTED] T6816.061
    
    [GRAPHIC] [TIFF OMITTED] T6816.062
    
    [GRAPHIC] [TIFF OMITTED] T6816.063
    
    [GRAPHIC] [TIFF OMITTED] T6816.064
    
    [GRAPHIC] [TIFF OMITTED] T6816.065
    
    [GRAPHIC] [TIFF OMITTED] T6816.066
    
    [GRAPHIC] [TIFF OMITTED] T6816.067
    
    [GRAPHIC] [TIFF OMITTED] T6816.068
    
    [GRAPHIC] [TIFF OMITTED] T6816.069
    
    [GRAPHIC] [TIFF OMITTED] T6816.070
    
    [GRAPHIC] [TIFF OMITTED] T6816.071
    
    [GRAPHIC] [TIFF OMITTED] T6816.072
    
    [GRAPHIC] [TIFF OMITTED] T6816.073
    
    [GRAPHIC] [TIFF OMITTED] T6816.074
    
    [GRAPHIC] [TIFF OMITTED] T6816.075
    
    [GRAPHIC] [TIFF OMITTED] T6816.076
    
    [GRAPHIC] [TIFF OMITTED] T6816.077
    
    [GRAPHIC] [TIFF OMITTED] T6816.078
    
    [GRAPHIC] [TIFF OMITTED] T6816.079
    
    [GRAPHIC] [TIFF OMITTED] T6816.080
    
    [GRAPHIC] [TIFF OMITTED] T6816.081
    
    [GRAPHIC] [TIFF OMITTED] T6816.082
    
    [GRAPHIC] [TIFF OMITTED] T6816.083
    
    [GRAPHIC] [TIFF OMITTED] T6816.084
    
    [GRAPHIC] [TIFF OMITTED] T6816.085
    
    [GRAPHIC] [TIFF OMITTED] T6816.086
    
    [GRAPHIC] [TIFF OMITTED] T6816.087
    
    [GRAPHIC] [TIFF OMITTED] T6816.088
    
    [GRAPHIC] [TIFF OMITTED] T6816.089
    
    [GRAPHIC] [TIFF OMITTED] T6816.090
    
    [GRAPHIC] [TIFF OMITTED] T6816.091
    
    [GRAPHIC] [TIFF OMITTED] T6816.092
    
    [GRAPHIC] [TIFF OMITTED] T6816.093
    
    [GRAPHIC] [TIFF OMITTED] T6816.094
    
    [GRAPHIC] [TIFF OMITTED] T6816.095
    
    [GRAPHIC] [TIFF OMITTED] T6816.096
    
    [GRAPHIC] [TIFF OMITTED] T6816.118
    
    [GRAPHIC] [TIFF OMITTED] T6816.119
    
    [GRAPHIC] [TIFF OMITTED] T6816.120
    
    [GRAPHIC] [TIFF OMITTED] T6816.121
    
    [GRAPHIC] [TIFF OMITTED] T6816.122
    
    [GRAPHIC] [TIFF OMITTED] T6816.123
    
    [GRAPHIC] [TIFF OMITTED] T6816.124
    

                                 
