[Congressional Record Volume 144, Number 90 (Thursday, July 9, 1998)]
[Senate]
[Pages S7710-S7713]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE AFRICAN GROWTH AND OPPORTUNITY ACT

  Mr. LUGAR. Mr. President, I rise to discuss the African Growth and 
Opportunity Act which has passed the House in March and is now before 
the Finance Committee and the Foreign Relations Committee. I am the 
principal Senate sponsor of the bill which I introduced some fourteen 
months ago. There are ten co-sponsors.
  I introduced the Africa bill because I believe that our policy 
towards sub-Saharan Africa should be revised to reflect changing global 
and regional realities. For too long, our policy has been based on 
country-by-country aid relationships and devoid of any comprehensive 
strategy towards the continent. As important as our child survival, 
health, agriculture, educational and humanitarian programs have been, 
they have not promoted much economic development, political stability 
or self-reliance. Nor have they benefitted the American economy. For 
that reason, it is time to re-evaluate our policy. That is the purpose 
of the African bill.
  The African Growth and Opportunity Act is the first serious attempt 
to formulate a new American strategy towards Africa. It provides a 
general road map for expanding economic engagement and involvement in 
Africa through enhanced trade and investment. It seeks to establish the 
foundation for a more mature partnership with those countries in Africa 
undertaking serious economic and political reforms.
  I'm pleased to note that virtually all African Ambassadors have 
endorsed this bill. It has wide support in the American business 
community, non-governmental organizations, the African-American 
community, and the Administration. Indeed, President Clinton mentioned 
the bill in his State of the Union address in January and Secretary of 
State Albright included it in her list of the top four leadership 
challenges for l998.
  Let me summarize the bill.
  First, it urges the President to negotiate free trade agreements with 
African countries with the ultimate goal of a U.S.-Sub-Saharan Africa 
Free Trade Area. The President will need Fast Track authority to 
negotiate this and other free trade measures and I strongly support 
that effort as well.
  The bill establishes a US-Africa Economic Cooperation Forum to 
facilitate senior level discussions on trade and investment. No such 
dialogue now exists and there exists no long term agenda involving the 
private sectors here and in Africa. Doing business in Africa will 
require high-level dialogue and this Forum will signal to the 
investment and trading communities that we take Africa seriously.
  Africa lacks the infrastructure needed to promote and sustain 
economic growth and development. The bill establishes two privately-
managed funds to leverage private financing for small and medium sized 
companies. The two funds would operate under OPIC guidelines and 
require no official USG appropriations. One is a $150 million equity 
fund, the other a $500 million infrastructure fund. Given the enormity 
of the needs, these are modest sized funds.
  Each of these initiatives will take time to mature. They have worked 
in other parts of the world.
  The initiatives in the bill that would bring more immediate economic 
benefits to Africa and the United States would provide greater access 
to our markets for African exports. The bill authorizes the President 
to grant duty-free treatment for products now excluded from the GSP 
program--subject to a sensitivity analysis by the International Trade 
Commission. It extends the GSP program to Africa for 10 years, which is 
important for business planning and predictability.
  The bill also eliminates quotas on textiles and apparel from Kenya 
and Mauritius, the two countries in sub-Saharan Africa which do not 
have quota-free access to the United States. They would receive this 
status only after adopting a visa system to guard against illegal 
transhipment of goods. Since global textile quotas are scheduled to 
disappear in the year 2005 under terms of the GATT, our bill merely 
gives Africa a small head start in a more competitive textile market of 
the future.

  Some have argued that granting quota-free and duty-free access to 
American markets will weaken our domestic textile industries. If that 
were true, I would not be advocating this provision. African imports of 
textiles and apparel now account for less than one percent of our total 
textile imports. The International Trade Commission looked at this 
issue and concluded that enactment of our bill would increase U.S. 
imports of textiles and apparel from Africa to between one and two 
percent of our total textile and apparel imports, a negligible impact.
  While this amount is small in terms of our overall textile and 
apparel imports, it can have sizable benefits for Africa. The lower 
costs of African textiles will also benefit American retailers and 
American consumers.
  Warnings about the illegal transhipment of Asian-origin garments 
through Africa, under liberalized arrangements, are false alarms. The 
House strengthened these safeguards substantially during its 
consideration of the bill.
  Mr. President, let me conclude by saying that we have an historic 
opportunity to help integrate African countries into the world economy 
and to

[[Page S7711]]

wind down our excessive dependency on public assistance as the 
signature of our ties with Africa. Africa is one of the last frontiers 
of untapped markets in the world. There are nearly 700 million people 
in sub-Saharan Africa. Yet, 33 of the world's forty-eight least 
developed countries are in Africa. Despite this, prospects for enhanced 
trade and investment are bright. Our exports now are twenty percent 
greater than to all the states of the former Soviet Union combined. 
Economic growth in Africa will create new markets and new opportunities 
for U.S. goods but that won't happen if we don't act to make it happen.
  We now have an opportunity to help strengthen civil societies and 
political institutions and to assist African societies on the path to 
greater self-reliance, economic growth and political stability. Nearly 
thirty countries in the region have conducted democratic elections.
  Private investment tends to follow good governance and economic 
reform but the private sector takes cues from government policies and 
involvement. It is very much in our interest to play a constructive 
role in the evolving political and economic transition in Africa.
  That transition is taking place and must continue. If we had ignored 
Taiwan and Korea in the l960s when they were at stages of economic 
development comparable to many African societies today, we would have 
missed enormous opportunities in East Asia. Years from now, I hope we 
can look back and be able to say that we were there at a crucial 
juncture in Africa's growth and development, that we played a 
constructive role in that change and that we did the right thing at the 
right time.
  Mr. President, if the United States is a major player, a pro-active 
player in Africa's economic and political development, we will also be 
a major beneficiary.
  I'm pleased the Finance Committee will be marking up the African bill 
later this month. I hope this bill will be brought to the floor as soon 
as possible for full Senate consideration.
  I urge all members to take a close look at the Africa Growth and 
Opportunity Act, look at the mutual long-term benefits it brings to 
Africa and to our country and support this important bill when it 
reaches the floor.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I rise today to join my colleague from 
Indiana in urging the Senate to move forward on the Africa trade bill. 
Who among us has not stood on the floor of the Senate when we voted on 
foreign aid and watched hundreds of millions of dollars spent by our 
government, knowing that this money was probably not going to be used 
in the end to help people, but instead would likely have a net product 
that was either crony capitalism or socialism, who among us has watched 
such a vote and not wished for an alternative?
  We have an alternative today. That alternative is trade. The 
wonderful thing about trade is that it makes people equal in free 
transactions of buyers and sellers, producers and consumers. It creates 
jobs and opportunities, and we benefit together with those who are 
engaged in trade with us.
  What we have in the Africa trade bill is a very modest proposal. The 
bill would allow the President, in those cases where a country in Sub-
Saharan Africa has taken steps toward establishing a market-based 
economy, where a country is not engaged in a violation of human rights, 
and where a country is not engaged in activities contrary to the U.S. 
national security and foreign policy interests, to expand our markets 
and increase out trade with that country.
  I think it is clear that there are business opportunities in Africa. 
I would like to see us as leaders in the effort to expand our mutual 
business relations. But the bottom line is we are dealing with 
countries that are hopelessly poor, and where poverty is a crushing 
presence in everyday life. We have an opportunity by expanding trade to 
help lift that weight of poverty, promote free enterprise, democracy, 
and the things that we believe in here at home, the things that we want 
people around the world to benefit from.
  There are those who will oppose this bill because it will mean that 
people in Africa will be producing textiles to sell in the United 
States.
  First of all, we must understand that today we do not have limits on 
textile imports from any of the countries in this region of Africa 
except two. Second, I think it is important to note, as Senator Lugar 
mentioned, that currently all of Sub-Saharan Africa sells to us less 
than two-thirds of 1 percent of all the textiles we import. The 
International Trade Commission has estimated that under the best of 
circumstances, where this region of Africa experienced as much 
investment in producing textiles as possible, their degree of exports 
could never exceed, in the period of time we are talking about under 
this bill, about 3 percent of our textile import market.
  Here is the question: Is it worth it to us to open up trade, and in 
the process bring goods into our country that our consumers can choose 
to buy or not buy if they believe that those goods are better or 
cheaper, and in the process make it possible for 750 million of our 
fellow human beings on this planet to have some of the opportunities we 
have?
  Quite frankly, while the President went to Africa, gave a lot of 
speeches, did a lot of photo-ops, he has done far too little to push 
the passage of the Africa trade bill. Most of the opponents of this 
bill are in the President's party.
  My basic position is this: I am tired of giving away foreign aid that 
does not work, that does not help anybody. We have an opportunity to 
let people produce products to sell on the world market. The worst 
thing that could happen to us from the provisions of this bill is that 
some poor working family in America would have lower priced textile 
products, could buy a shirt that is cheaper, or a shirt that they 
wanted more.
  It seems to me that we ought not to allow greedy special interests 
who are already ripping off the American consumer--as we are paying 
more than the world market prices for textiles every single day in 
every store in America--we ought to be ashamed of ourselves to let a 
small number of special interest groups prevent a very modest bill from 
passing, a bill that could literally represent a turning point for 750 
million human beings on this planet.
  So I feel strongly about this bill. I think it is outrageous that we 
are not moving ahead on it. It does so little already that there can be 
no good objection to taking this very modest step.
  I remind my colleagues that under the current agreements we have 
under the World Trade Organization, in the year 2005 all these textile 
quotas are coming off anyway. So all we are trying to do with this bill 
is help this continent, which is so poor, which has so much 
hopelessness, get a head start in producing textiles. We can help them 
lift themselves out of their grinding poverty.
  There are some who will say, ``OK; great. Let's let them. Let's make 
them use American cloth, and let's make them use American thread.'' The 
problem is that the costs in this competitive industry are such that 
you cannot ship all of this thread and fabric to Africa and have 
products produced there, and bring them back here to compete with 
products from those who are doing the same thing in Mexico for 
virtually no transportation costs.
  So I urge my colleagues, when we are talking about nothing in terms 
of impact on our domestic textile market, when at worst we as American 
consumers will benefit, let us take this opportunity to try to open up 
trade with Africa, to let people enjoy the one system we know works--
trade, economic growth, economic freedom.
  I hope we will move ahead on this bill. It is going to be my goal, if 
we cannot get this bill to the floor through the committee, to offer it 
as an amendment on some other bill. I want us to vote on Africa trade, 
and move ahead.
  Mr. HOLLINGS. Mr. President, the distinguished Senator from Indiana 
and the distinguished Senator from Texas raised the question of the 
sub-Sahara bill. I had heard the expression that ``trade,'' says the 
Senator from Texas, ``makes people equal,'' and then went on, of 
course, to say that the sub-Sahara bill should not be blocked by 
``greedy special interests''; they shouldn't prevent the passage of the 
bill; ``special interests,'' namely, of course, the textile industry.

[[Page S7712]]

  What happens, in all candor, is almost like the Community Chest and 
the United Fund, ``giving at the office,'' doing your fair share.
  This started way, way back in the 1950s. This particular Senator 
appeared as Governor back before the International Tariff Commission at 
the time that Tom Dewey represented the Japanese industry, and chased 
me around the hearing at that particular time whereby we were concerned 
that 10 percent of the consumption of textiles and apparels in America 
was represented by imports. And they had a provision in law under the 
national security section that you had to find before a President could 
take action, that there be a finding that the particular product was 
important to our national security.
  President Kennedy, when he took office, appointed his Secretaries of 
State, Labor, Commerce, Defense, and Treasury--Secretary Dillon, at 
that particular time, Secretary Goldberg, Secretary Dean Rusk, 
Secretary Hodges, and then, of course, Secretary Freeman from Labor. 
And we presented the witnesses. The findings were that next to steel 
textiles was the second most important to national security; that we 
couldn't send them to war in a Japanese uniform.
  Since that time, of course, there have been various initiatives 
whereby we have given more than ``at the office.'' We have given more 
than our ``fair share,'' so that in the limited time let me 
categorically state that two-thirds of the clothing in this Chamber 
this minute is imported. We gradually are going out of business, and 
more particularly, since NAFTA, have gone out of business.
  What happens in my State, so as to understand, is that we have lost 
24,000 textile and apparel jobs since the enactment of NAFTA in the 
State of South Carolina. We actually had 1 million apparel workers over 
the country when President Clinton came in, and we are down now to 
781,000 in 1998. We have lost 219,000.
  Rather than being ``greedy,'' Mr. President--that is what I really 
want to correct--the textile industry is geared up competitively.
  You ought to go into one. Incidentally, calling them ``greedy,'' I 
have been through, I think, 13 of the Milliken plants. There is no 
bigger Republican than Roger Milliken. So you don't want to go around 
saying ``greedy'' Republican interests. Let's get away from that 
connotation, because the truth of the matter is you will find no more 
competitive industry than Milliken Textiles. They have won the Baldrige 
Award. They have set the pace for modernization, computerization, 
mechanization, and otherwise, electronically controlled. You ought to 
visit those people. They have cut back and downsized, and are extremely 
competitive, with the industry itself investing over $2 billion a year 
each year for the past 10 years, and trying to stay competitive and 
exist as an industry--not ``greedy'' at all.
  But what really happens is that these jobs are extremely important to 
our economy. They average around $7 to $10. It is up to $10 now.
  I am showing you a headline of Thursday, July 9, on breaking news in 
South Carolina.
  I ask unanimous consent that the entire article be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  South Carolina's Factory Workers Lowest Paid in Southeast Economic 
                                 Grade

       Columbia, SC (AP)--For years, South Carolina has sold 
     itself as a low-cost, low-wage place for businesses to expand 
     or locate factories, College of Charleston economist Frank 
     Hefner says.
       ``The kind of industry that comes . . . creates low-wage 
     jobs,'' he said.
       South Carolina doesn't win the engineering-intensive and 
     research-and-development jobs that surround corporate 
     headquarters. ``We're the piece shop,'' Hefner said.
       But factory workers do not appear to have shared equally in 
     the state's much-heralded economic boom, according to federal 
     statistics that rank them the worst paid in the Southeast.
       Still, there is some good news in the wage numbers. The 
     factory jobs ``pay higher wages higher wages than farm 
     workers and service workers,'' Hefner said.
       Between 1990 and 1998's first quarter, the average wages of 
     South Carolina factory workers grew by 17 percent to $10.44 
     an hour. During the same period, average factory wages 
     increased 24 percent in the Southeast to $11.68 an hour>
       As he seeks re-election, Republican Gov. David Beasley has 
     proclaimed his administration successful in attracting new 
     and higher-paying jobs to the state. His opponent, Democrat 
     Jim Hodges, says workers have missed out on the economic good 
     times.
       The Hodges campaign this week pointed to an annual economic 
     development study that graded South Carolina an F in economic 
     performance.
       However, the latest figures from the Corporation for 
     Enterprise Development show South Carolina has improved to a 
     C.
       The 1998 study said strong employment conditions were key 
     to the recovery. South Carolina had the third-fastest 
     employment growth over the preceding year and the 13th-lowest 
     unemployment rate.
       Beasley says since his 1995 inauguration, South Carolina 
     has attracted $16.5 billion in economic investment, creating 
     80,000 jobs. His administration, however, has been unable to 
     provide documentation for some of its economic development 
     numbers.
       Some of the promised investments, for instance, may not be 
     fulfilled for years and the state has said it does not check 
     which ones actually are completed. It also has refused to 
     identify all the companies doing the investing, thwarting 
     easy checks.
       Those new jobs largely have paid more than the state's low 
     average manufacturing wage, Beasley spokesman Gary Karr said.
       ``The jobs we've announced over the last two or three years 
     are getting close to $30,000 a year,'' Karr said. ``That's a 
     huge increase (compared with) the average wage.''
       The national average for manufacturing workers is $36,000 a 
     year, according to Bureau of Labor Statistics.
       Karr said the bureau numbers miss the point. The low 
     average factory wage does not reflect that higher-wage jobs 
     are growing more rapidly than lower-wage jobs, he said.
       First Union economist Mark Vitner agrees.
       ``The majority of (job) growth is occurring in industries 
     that pay 20 percent above the average manufacturing wage,'' 
     Vitner said. At the same time, the state is losing low-paying 
     manufacturing jobs, particularly in textiles and apparel.
       Still, low-paying textile companies with a total of 77,500 
     workers represent about one-fifth of South Carolina's 
     manufacturing work force.

  Mr. HOLLINGS. I thank the Chair.
  ``South Carolina's factory workers lowest paid in SoutheastEconomic 
Grade.''
  So, on the one hand, we are ``greedy,'' because we are not giving our 
jobs to the Sub Sahara Africa bill. And, on the other hand, we are low 
paying and slovenly because we are not paying them enough as the 
industry and labor sees it.
  So the textile manufacturers are caught between a rock and a hard 
place. There is no question that they are just as competitive as all 
that get out.
  But Washington should sober up from this global competition singsong. 
Specifically, let's go to Oneita, a manufacturing plant in Andrews, SC, 
that made T-shirts. They had 487 workers. They closed down because they 
went to Mexico because anybody can make a T-shirt.
  What happens, as we politicians say, ``Wait a minute.'' Before you 
open Oneita, you have to have clean air, you have to have clean water, 
Social Security, Medicare, Medicaid, minimum wage, plant-closing 
notice, parental leave, safe workplace, safe working machinery. All of 
that goes into the cost of the product. You go down to 58 cents an hour 
in Mexico and have none of those requirements. So if your competition 
leaves, you have to leave. So you are losing the jobs.
  So the stance of the textile industry and the concern over the sub-
Sahara bill is not ``greed;'' so-called ``trade'' makes people equal. 
Trade makes people unemployed.
  That is what has occurred. We are here to represent the industrial 
backbone, the manufacturing backbone of this Nation. As Akio Morita 
said some years back, talking about Third World countries, they have 
got to develop a strong manufacturing sector in order to become a 
nation state. And then, looking at me, he said, ``Senator, that world 
power that ceases to have its manufacturing capacity will cease to be a 
world power.''
  So we have the three-legged stool. On the first leg, the one of 
values, we are strong; the second leg, the one of military, we are 
strong; but the third leg over the past 50 years has been fractured 
economically. It has shortened. And that is the danger to the Nation's 
economy, and not just to the textile workers of South Carolina. It is a 
fundamental concern that these excellent jobs and excellent industries 
receive fair treatment.
  We have done more than our fair share to spread capitalism in the 
Pacific rim, into Korea and everywhere else, down to Mexico, over into 
Europe initially after the Marshall Plan, and

[[Page S7713]]

now to Africa. But let's see that we contain that industry in America's 
economic self-interest.
  I yield the floor and thank the distinguished Chair.
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. DeWINE. Mr. President, how much time remains on this side?
  The PRESIDING OFFICER. Thirteen minutes.
  Mr. DeWINE. I ask the Chair to notify me after I have used 6 minutes.


                         privilege of the floor

  Mr. DeWINE. Mr. President, I ask unanimous consent that a member of 
my staff, Jason Small, be granted floor privileges for the day.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DeWINE. Mr. President, let me first join my colleagues, Senator 
Lugar and Senator Gramm, in support of the African Trade Group and 
Opportunities Act, and the reasons they have stated this is the right 
thing to do. It is in our national self-interest. It will do a lot of 
good.
  (The remarks of Mr. DeWine pertaining to the introduction of S. 2283 
are located in today's Record under ``Statements on Introduced Bills 
and Joint Resolutions.'')
  Mr. DEWINE. Mr. President, I thank the Chair and yield the floor.
  Mr. GORTON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Washington.

                          ____________________