[Congressional Record (Bound Edition), Volume 159 (2013), Part 5]
[Extensions of Remarks]
[Pages 6550-6551]
[From the U.S. Government Publishing Office, www.gpo.gov]




       INCREASING AMERICAN JOBS THROUGH GREATER EXPORTS TO AFRICA

                                 ______
                                 

                       HON. CHRISTOPHER H. SMITH

                             of new jersey

                    in the house of representatives

                         Wednesday, May 8, 2013

  Mr. SMITH of New Jersey. Mr. Speaker, yesterday, I chaired a 
Subcommittee on Africa, Global Health, Global Human Rights, and 
International Organizations hearing that examined the issues 
surrounding U.S. exports to Africa, which are supposed to at least 
balance African exports to the United States. This included looking at 
existing obstacles to two-way trade with Africa. The hearing 
specifically examined the Increasing American Jobs Through Greater 
Exports to Africa Act of 2013 (H.R. 1777). The bill was reintroduced in 
the House by myself, Ranking Member Karen Bass, and Congressman Bobby 
Rush on April 26th and was introduced in the Senate on April 11th as S. 
718.
   The purpose of H.R. 1777 (and S. 718) is to increase U.S. exports to 
Africa by 200 percent over the next decade. This bill does not replace 
AGOA. It complements it by providing

[[Page 6551]]

for a rebalancing that makes it as beneficial to Americans as it is to 
Africans. The bill intends to reach its ambitious, but achievable, goal 
by taking several steps, including the creation of a comprehensive 
U.S.-Africa trade strategy and a coordinator to ensure that all U.S. 
agencies involved in trade work in concert with one another.
   This legislation also calls for not less than 25 percent of 
available U.S. financing for trade deals to be devoted to facilitating 
U.S.-Africa trade. Furthermore, it encourages the descendants of Africa 
in this country, who largely operate small and medium-sized businesses, 
to play a greater role in trade with the countries in Africa.
   Various studies show that every additional $1 billion in exports 
generates 6,000-7,000 new U.S. jobs. According to current data from the 
U.S. International Trade Administration export-supported jobs linked to 
manufacturing account for an estimated 3.3 percent of my home state of 
New Jersey's total private-sector employment. More than one-sixth, or 
17.2 percent, of all manufacturing workers in New Jersey depend on 
exports for their jobs.
   But U.S. exports have suffered during the global economic downturn 
because traditional markets, such as in Europe, are buying fewer U.S. 
products. According to the USITA, we are the largest importer of 
African goods, receiving 20.2 percent of the continent's total global 
exports. However, U.S. exports to Africa fell sharply during the height 
of the global recession. From 2008 to 2009, U.S. exports to Africa 
dropped 45 percent from $78.3 billion to $42.8 billion.
   According to statistics released by the U.S. Census Bureau, African 
exports to the United States since AGOA took effect in 2001 increased 
from $25.4 billion to $66.9 billion in 2012--an increase of more than 
262 percent. By far, petroleum exports from Africa led the way with 
more than $28.6 billion in 2012. Meanwhile, Census Bureau statistics 
showed that U.S. exports to Africa increased from $12.1 billion in 2001 
to $32.8 billion in 2012--an increase of 271 percent. Consequently, 
while U.S. exports to Africa showed a robust increase since the 
inception of AGOA, the U.S. trade deficit with Africa increased from 
$13.3 billion in 2001 to more than $34 billion last year.
   The five most popular import sectors for African countries are: 
machinery and equipment, chemicals, petroleum products (including 
lubricating oils, plastics and synthetics fibers), scientific 
instruments and food products. That means that small and medium 
companies across the United States have commercial opportunities 
available in exporting goods and services to African countries. The 
African Development Bank estimates that one out of three Africans is 
considered to be in the middle class--that's nearly 314 million 
Africans who have escaped poverty and can now buy consumer goods, 
including those from the United States.
   In the supermarkets and department stores that have sprung up across 
Africa in recent years, there are some American products already on the 
shelves, but there is space for more contributions from U.S. producers. 
Companies such as Proctor and Gamble have long realized the potential 
of African markets. Two years ago, Wal-Mart, the world's largest retail 
outlet, purchased South Africa's Massmart and its 288 stores in 14 
African countries.
   The Economist magazine created a significant buzz within the U.S.-
Africa trade community two years ago when it announced that six of the 
world's 10 fastest growing economies in the first decade of this 
century were in Africa: Angola, Chad, Ethiopia, Mozambique, Nigeria and 
Rwanda. In the following five years, The Economist projected that seven 
of the top 10 fasted growing global economies would be African: the 
Democratic Republic of the Congo, Ethiopia, Ghana, Mozambique, Nigeria, 
Tanzania and Zambia.
   Whether or not you agree with the popular slogan--Africa Is Rising--
markets on the continent are attracting foreign trade and investment in 
increasing amounts. It is not only China that has its sights set on 
African markets. Countries as diverse as India, Japan, Brazil and 
Turkey all see the potential of selling their products in Africa.
   The Anglo-Dutch consumer goods giant Unilever has long considered 
Africa a lucrative environment for consumer sales, earning a fifth of 
its profits in Africa until the 1970s, when it turned its main 
commercial attention to Asia. Now Unilever is back in Africa in force, 
selling $3.7 billion of everything from soup to soap. Frank Braeken, 
head of Unilever's Africa operations, said African consumers are 
underserved and overcharged. To meet the continent's need for personal 
care products for African skin and hair, Unilever developed its Motions 
range of products.
   At our hearing on this legislation last spring, we heard from Luster 
Products, which produces items that fit that description. There is 
little reason why this company and other U.S. producers can't follow 
suit and meet the needs Unilever says are now unmet.
   We will hear today from four witnesses with expertise on the 
opportunities and challenges faced by U.S. companies in trade with 
countries in Africa. We expect to learn why U.S. exports to Africa have 
not kept pace with U.S. imports from Africa and find out what Congress 
can do to better balance U.S.-Africa trade.

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