[Congressional Record Volume 144, Number 31 (Thursday, March 19, 1998)]
[Extensions of Remarks]
[Page E425]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                   AFRICAN GROWTH AND OPPORTUNITY ACT

                                 ______
                                 

                               speech of

                           HON. JIM McDERMOTT

                             of washington

                    in the house of representatives

                       Wednesday, March 11, 1998

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 1432) to 
     authorize a new trade and investment policy for sub-Saharan 
     Africa:

  Mr. McDERMOTT. Mr. Chairman, the most important thing about the U.S. 
trade policy towards sub-Saharan Africa is that there isn't one. 
Congress has an opportunity to change that situation by passing HR 
1432, the African Growth and Opportunity Act, a widely supported 
bipartisan bill, that creates the framework for qualified African 
countries to move from aid to trade.
  For the first time since the end of the colonial era, the United 
States is proposing to engage the countries of sub-Saharan Africa on 
the same basis as we do the rest of the world, as trading partners. The 
old donor and recipient paradigm, that has historically defined U.S. 
relations with Africa, is being replaced by a new and more dynamic 
paradigm that states that:

       . . . it is in the mutual economic interest of the United 
     States and the countries of Africa to promote programs, 
     policies and strategies that reduce poverty through economic 
     growth, self reliance, and commerce. Traditional aid, while 
     still necessary in some countries, is not sufficient to bring 
     about fundamental change in Africa. Economic growth, self 
     reliance, and commerce are not only vital for raising living 
     standards on a broad basis, but also for addressing the 
     critical social and health needs that plague Africa. Without 
     a strong commitment to economic growth, self reliance, and 
     commerce, no social programs, no schedule expenditures, no 
     amount of aid will make a sustained improvement in the 
     quality of life of Africa's citizens. Africa needs economic 
     growth to make its social objectives feasible.

  HR 1432 is the beginning of a process that will change our negative 
bureaucratic culture towards Africa. HR 1432 is strongly supported by 
all of Africa's political and economic leaders. The response from 
Africa had been clear, Africans want to be trading partners with the 
U.S. and the world, not perpetual recipients of donor assistance. HR 
1432 explicitly states that the U.S. should continue to provide 
traditional development assistance to those countries attempting to 
build civil societies. In fact, the bill also states that economic 
growth depends on establishing a receptive environment for trade and 
investment, and that to achieve this objective USAID should continue to 
pursue programs in Africa. The Clinton Administration, including USAID, 
have strongly endorsed this legislation.
  Many of the countries of Africa are moving in the right direction. 
Political and economic reform are beginning to take hold and a new 
generation of leaders have assumed power through elections. Things are 
much better, albeit not perfect, but better. Many countries in Africa 
have experienced positive growth rates over the last five years. Africa 
currently has 14 stock markets and the number is growing. Trade between 
the U.S. is growing, it is currently larger than trade between the U.S. 
and the former Soviet Union. The American corporate community has 
developed a renewed interest in Africa. Now is the time to seize the 
initiative and work to solidify the positive developments that are 
taking place in Africa. HR 1432 gives the world's largest economy a 
plan to help the smallest economies to grow and prosper without harming 
U.S. consumes, manufacturers, or workers.
  In addition to establishing a trade policy towards Africa, HR 1432 is 
composed of three primary cornerstones and several key initiatives. The 
first cornerstone is the negotiation of U.S.-Africa free trade 
agreements. The negotiation of the free trade agreements gives us the 
opportunity to begin the process of bilateral and multilateral 
discussion that, over a number of years, will lead to the type of 
economic and trade relations that are mutually beneficial to Africa and 
the U.S. HR 1432 is not a free trade agreement--it promotes free trade 
with African countries as a goal for the future.
  The second cornerstone is the creation of a U.S.-African Economic 
Cooperation Forum, loosely modeled on APEC. The forum will begin to 
change the perception of Africa as anything other than a recipient of 
donor aid, or as a humanitarian basket case. The forum will be the 
place where trade and investment issues and concerns will be discussed 
at by Cabinet level officials and will demonstrate to the international 
community that the United States takes Africa seriously. The forum will 
also send a signal to our business community that the U.S. government 
is committed to making it easier to do business in Africa.
  The third cornerstone is the U.S.-Africa investment partnership. OPIC 
will be directed to establish a privately managed equity fund and an 
infrastructure fund that will leverage private financing for small and 
moderate sized U.S. and African businesses, and expand opportunities 
for infrastructure development throughout Africa. The demand for 
infrastructure in Africa is enormous but, the response from the 
international finance community has not been promising. It is clear 
that Africa's future competitiveness depends on reliable 
telecommunications, roads, railways, and power plants.
  The principal goal of our three cornerstones is to attract 
international project financing to Africa, and to make it financially 
feasible for U.S. investors to participate in profitable business 
opportunities in Africa. If successful, there will be substantial job 
growth, increase in per capita incomes, and expanded trade between the 
U.S. and Africa.
  While the three cornerstone programs will take time to implement, 
there is one initiative that could have an immediate impact on Africa 
countries. African textile and clothing exports to the U.S. represent 
less than 1% (about $383 million) of the total import market of $46 
billion. HR 1432 contains a provision that could be implemented 
immediately and would not compete with U.S. products or cost U.S. jobs. 
In fact, when the World Bank analyzed HR 1432, it reported that the 
impact on U.S. manufacturers would be negligible. The provision 
eliminates the existing quotas on textiles and clothing exports from 
the countries of Africa as long as a cost effective and efficient visa 
system to guard against transshipment is in place. This provision 
represents a major opportunity to expand Africa's exports to the U.S. 
and generates more than 200,000 jobs and millions of dollars in tax 
revenue for Africa. Moreover, African and American products would not 
compete with each other.
  HR 1432 is a commitment to a major shift in emphasis towards a 
private sector and market incentives approach to stimulating economic 
growth and reducing poverty in Africa. To participate, a country will 
have to meet eligibility requirements based on a strong commitment to 
economic, political, and trade liberalization.
  Some think this initiative is naive, overly optimistic, or just 
completely unrealistic. I think that it is time that the U.S. becomes 
actively involved in building an economic partnership with the 
countries of Africa. That's what HR 1432 intends to do.
  Mr. Speaker, on the floor of the House of Representatives, we often 
hear of days which are declared ``historic''. However, with the passage 
of HR 1432, the African Growth and Opportunity Act, today is truly a 
historic day.

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