[House Report 105-423]
[From the U.S. Government Publishing Office]



105th Congress                                            Rept. 105-423
 2d Session             HOUSE OF REPRESENTATIVES                 Part 1
_______________________________________________________________________


 
                   AFRICAN GROWTH AND OPPORTUNITY ACT

                                _______
                                

 March 2, 1998.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


 Mr. Gilman, from the Committee on International Relations, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 1432]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on International Relations, to whom was 
referred the bill (H.R. 1432) to authorize a new trade and 
investment policy for sub-Saharan Africa, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``African Growth and Opportunity Act''.

SEC. 2. FINDINGS.

  The Congress finds that it is in the mutual economic interest of the 
United States and sub-Saharan Africa to promote stable and sustainable 
economic growth and development in sub-Saharan Africa. To that end, the 
United States seeks to facilitate market-led economic growth in, and 
thereby the social and economic development of, the countries of sub-
Saharan Africa. In particular, the United States seeks to assist sub-
Saharan African countries, and the private sector in those countries, 
to achieve economic self-reliance by--
          (1) strengthening and expanding the private sector in sub-
        Saharan Africa, especially women-owned businesses;
          (2) encouraging increased trade and investment between the 
        United States and sub-Saharan Africa;
          (3) reducing tariff and nontariff barriers and other trade 
        obstacles;
          (4) expanding United States assistance to sub-Saharan 
        Africa's regional integration efforts;
          (5) negotiating free trade areas;
          (6) establishing a United States-Sub-Saharan Africa Trade and 
        Investment Partnership;
          (7) focusing on countries committed to accountable 
        government, economic reform, and the eradication of poverty;
          (8) establishing a United States-Sub-Saharan Africa Economic 
        Cooperation Forum; and
          (9) continuing to support development assistance for those 
        countries in sub-Saharan Africa attempting to build civil 
        societies.

SEC. 3. STATEMENT OF POLICY.

  The Congress supports economic self-reliance for sub-Saharan African 
countries, particularly those committed to--
          (1) economic and political reform;
          (2) market incentives and private sector growth;
          (3) the eradication of poverty; and
          (4) the importance of women to economic growth and 
        development.

SEC. 4. ELIGIBILITY REQUIREMENTS.

  (a) In General.--A sub-Saharan African country shall be eligible to 
participate in programs, projects, or activities, or receive assistance 
or other benefits under this Act if the President determines that the 
country does not engage in gross violations of internationally 
recognized human rights and has established, or is making continual 
progress toward establishing, a market-based economy, such as the 
establishment and enforcement of appropriate policies relating to--
          (1) promoting free movement of goods and services between the 
        United States and sub-Saharan Africa and among countries in 
        sub-Saharan Africa;
          (2) promoting the expansion of the production base and the 
        transformation of commodities and nontraditional products for 
        exports through joint venture projects between African and 
        foreign investors;
          (3) trade issues, such as protection of intellectual property 
        rights, improvements in standards, testing, labeling and 
        certification, and government procurement;
          (4) the protection of property rights, such as protection 
        against expropriation and a functioning and fair judicial 
        system;
          (5) appropriate fiscal systems, such as reducing high import 
        and corporate taxes, controlling government consumption, 
        participation in bilateral investment treaties, and the 
        harmonization of such treaties to avoid double taxation;
          (6) foreign investment issues, such as the provision of 
        national treatment for foreign investors and other measures to 
        create an environment conducive to domestic and foreign 
        investment;
          (7) supporting the growth of regional markets within a free 
        trade area framework;
          (8) governance issues, such as eliminating government 
        corruption, minimizing government intervention in the market 
        such as price controls and subsidies, and streamlining the 
        business license process;
          (9) supporting the growth of the private sector, in 
        particular by promoting the emergence of a new generation of 
        African entrepreneurs;
          (10) encouraging the private ownership of government-
        controlled economic enterprises through divestiture programs;
          (11) removing restrictions on investment; and
          (12) observing the rule of law, including equal protection 
        under the law and the right to due process and a fair trial.
  (b) Additional Factors.--In determining whether a sub-Saharan African 
country is eligible under subsection (a), the President shall take into 
account the following factors:
          (1) An expression by such country of its desire to be an 
        eligible country under subsection (a).
          (2) The extent to which such country has made substantial 
        progress toward--
                  (A) reducing tariff levels;
                  (B) binding its tariffs in the World Trade 
                Organization and assuming meaningful binding 
                obligations in other sectors of trade; and
                  (C) eliminating nontariff barriers to trade.
          (3) Whether such country, if not already a member of the 
        World Trade Organization, is actively pursuing membership in 
        that Organization.
          (4) Where applicable, the extent to which such country is in 
        material compliance with its obligations to the International 
        Monetary Fund and other international financial institutions.
          (5) The extent to which such country has a recognizable 
        commitment to reducing poverty, providing basic health and 
        education for poor citizens, the expansion of physical 
        infrastructure in a manner designed to maximize accessibility, 
        increased access to market and credit facilities for small 
        farmers and producers, and improved economic opportunities for 
        women as entrepreneurs and employees.
          (6) Whether or not such country engages in activities that 
        undermine United States national security or foreign policy 
        interests.
  (c) Continuing Compliance.--
          (1) Monitoring and review of certain countries.--The 
        President shall monitor and review the progress of sub-Saharan 
        African countries in order to determine their current or 
        potential eligibility under subsection (a). Such determinations 
        shall be based on quantitative factors to the fullest extent 
        possible and shall be included in the annual report required by 
        section 15.
          (2) Ineligibility of certain countries.--A sub-Saharan 
        African country described in paragraph (1) that has not made 
        continual progress in meeting the requirements with which it is 
        not in compliance shall be ineligible to participate in 
        programs, projects, or activities, or receive assistance or 
        other benefits, under this Act.
  (d) Violations of Human Rights and Ineligible Countries.--It is the 
sense of the Congress that a sub-Saharan African country should not be 
eligible to participate in programs, projects, or activities, or 
receive assistance or other benefits under this Act if the government 
of that country is determined by the President to engage in a 
consistent pattern of gross violations of internationally recognized 
human rights.

SEC. 5. ADDITIONAL AUTHORITIES AND INCREASED FLEXIBILITY TO PROVIDE 
                    ASSISTANCE UNDER THE DEVELOPMENT FUND FOR AFRICA.

  (a) Use of Sustainable Development Assistance To Support Further 
Economic Growth.--It is the sense of the Congress that sustained 
economic growth in sub-Saharan Africa depends in large measure upon the 
development of a receptive environment for trade and investment, and 
that to achieve this objective the United States Agency for 
International Development should continue to support programs which 
help to create this environment. Investments in human resources, 
development, and implementation of free market policies, including 
policies to liberalize agricultural markets and improve food security, 
and the support for the rule of law and democratic governance should 
continue to be encouraged and enhanced on a bilateral and regional 
basis.
  (b) Declarations of Policy.--The Congress makes the following 
declarations:
          (1) The Development Fund for Africa established under chapter 
        10 of part I of the Foreign Assistance Act of 1961 (22 U.S.C. 
        2293 et seq.) has been an effective tool in providing 
        development assistance to sub-Saharan Africa since 1988.
          (2) The Development Fund for Africa will complement the other 
        provisions of this Act and lay a foundation for increased trade 
        and investment opportunities between the United States and sub-
        Saharan Africa.
          (3) Assistance provided through the Development Fund for 
        Africa will continue to support programs and activities that 
        promote the long term economic development of sub-Saharan 
        Africa, such as programs and activities relating to the 
        following:
                  (A) Strengthening primary and vocational education 
                systems, especially the acquisition of middle-level 
                technical skills for operating modern private 
                businesses and the introduction of college level 
                business education, including the study of 
                international business, finance, and stock exchanges.
                  (B) Strengthening health care systems.
                  (C) Strengthening family planning service delivery 
                systems.
                  (D) Supporting democratization, good governance and 
                civil society and conflict resolution efforts.
                  (E) Increasing food security by promoting the 
                expansion of agricultural and agriculture-based 
                industrial production and productivity and increasing 
                real incomes for poor individuals.
                  (F) Promoting an enabling environment for private 
                sector-led growth through sustained economic reform, 
                privatization programs, and market-led economic 
                activities.
                  (G) Promoting decentralization and local 
                participation in the development process, especially 
                linking the rural production sectors and the industrial 
                and market centers throughout Africa.
                  (H) Increasing the technical and managerial capacity 
                of sub-Saharan African individuals to manage the 
                economy of sub-Saharan Africa.
                  (I) Ensuring sustainable economic growth through 
                environmental protection.
          (4) The African Development Foundation has a unique 
        congressional mandate to empower the poor to participate fully 
        in development and to increase opportunities for gainful 
        employment, poverty alleviation, and more equitable income 
        distribution in sub-Saharan Africa. The African Development 
        Foundation has worked successfully to enhance the role of women 
        as agents of change, strengthen the informal sector with an 
        emphasis on supporting micro and small sized enterprises, 
        indigenous technologies, and mobilizing local financing. The 
        African Development Foundation should develop and implement 
        strategies for promoting participation in the socioeconomic 
        development process of grassroots and informal sector groups 
        such as nongovernmental organizations, cooperatives, artisans, 
        and traders into the programs and initiatives established under 
        this Act.
  (c) Additional Authorities.--
          (1) In general.--Section 496(h) of the Foreign Assistance Act 
        of 1961 (22 U.S.C. 2293(h)) is amended--
                  (A) by redesignating paragraph (3) as paragraph (4); 
                and
                  (B) by inserting after paragraph (2) the following:
          ``(3) Democratization and conflict resolution capabilities.--
        Assistance under this section may also include program 
        assistance--
                  ``(A) to promote democratization, good governance, 
                and strong civil societies in sub-Saharan Africa; and
                  ``(B) to strengthen conflict resolution capabilities 
                of governmental, intergovernmental, and nongovernmental 
                entities in sub-Saharan Africa.''.
          (2) Conforming amendment.--Section 496(h)(4) of such Act, as 
        amended by paragraph (1), is further amended by striking 
        ``paragraphs (1) and (2)'' in the first sentence and inserting 
        ``paragraphs (1), (2), and (3)''.
  (d) Waiver Authority.--Section 496 of the Foreign Assistance Act of 
1961 (22 U.S.C. 2293) is amended by adding at the end the following:
  ``(p) Waiver Authority.--
          ``(1) In general.--Except as provided in paragraph (2), the 
        President may waive any provision of law that earmarks, for a 
        specified country, organization, or purpose, funds made 
        available to carry out this chapter if the President 
        determines, subject to the notification procedures under 
        section 634A, that the waiver of such provision of law would 
        provide improved conditions for the people of Africa. The 
        President shall notify the appropriate congressional 
        committees, in accordance with the procedures applicable to 
        reprogramming notifications under section 634A of this Act, at 
        least 15 days before any determination under this paragraph 
        takes effect.
          ``(2) Exceptions.--
                  ``(A) Child survival activities.--The authority 
                contained in paragraph (1) may not be used to waive a 
                provision of law that earmarks funds made available to 
                carry out this chapter for the following purposes:
                          ``(i) Immunization programs.
                          ``(ii) Oral rehydration programs.
                          ``(iii) Health and nutrition programs, and 
                        related education programs, which address the 
                        needs of mothers and children.
                          ``(iv) Water and sanitation programs.
                          ``(v) Assistance for displaced and orphaned 
                        children.
                          ``(vi) Programs for the prevention, 
                        treatment, and control of, and research on, 
                        tuberculosis, HIV/AIDS, polio, malaria, and 
                        other diseases.
                          ``(vii) Basic education programs for 
                        children.
                          ``(viii) Contribution on a grant basis to the 
                        United Nations Children's Fund(UNICEF) pursuant 
to section 301 of this Act.
                  ``(B) Requirement to supersede waiver authority.--The 
                provisions of this subsection shall not be superseded 
                except by a provision of law enacted after the date of 
                the enactment of the African Growth and Opportunity Act 
                which specifically repeals, modifies, or supersedes 
                such provisions.''.

SEC. 6. UNITED STATES-SUB-SAHARAN AFRICA TRADE AND ECONOMIC COOPERATION 
                    FORUM.

  (a) Declaration of Policy.--The President shall convene annual high-
level meetings between appropriate officials of the United States 
Government and officials of the governments of sub-Saharan African 
countries in order to foster close economic ties between the United 
States and sub-Saharan Africa.
  (b) Establishment.--Not later than 12 months after the date of the 
enactment of this Act, the President, after consulting with the 
governments concerned, shall establish a United States-Sub-Saharan 
Africa Trade and Economic Cooperation Forum (hereafter in this section 
referred to as the ``Forum'').
  (c) Requirements.--In creating the Forum, the President shall meet 
the following requirements:
          (1) The President shall direct the Secretary of Commerce, the 
        Secretary of the Treasury, the Secretary of State, and the 
        United States Trade Representative to host the first annual 
        meeting with the counterparts of such Secretaries from the 
        governments of sub-Saharan African countries eligible under 
        section 4, the Secretary General of the Organization of African 
        Unity, and government officials from other appropriate 
        countries in Africa, to discuss expanding trade and investment 
        relations between the United States and sub-Saharan Africa and 
        the implementation of this Act.
          (2)(A) The President, in consultation with the Congress, 
        shall encourage United States nongovernmental organizations to 
        host annual meetings with nongovernmental organizations from 
        sub-Saharan Africa in conjunction with the annual meetings of 
        the Forum for the purpose of discussing the issues described in 
        paragraph (1).
          (B) The President, in consultation with the Congress, shall 
        encourage United States representatives of the private sector 
        to host annual meetings with representatives of the private 
        sector from sub-Saharan Africa in conjunction with the annual 
        meetings of the Forum for the purpose of discussing the issues 
        described in paragraph (1).
          (3) The President shall, to the extent practicable, meet with 
        the heads of governments of sub-Saharan African countries 
        eligible under section 4 not less than once every two years for 
        the purpose of discussing the issues described in paragraph 
        (1). The first such meeting should take place not later than 
        twelve months after the date of the enactment of this Act.
  (d) Dissemination of Information by USIA.--In order to assist in 
carrying out the purposes of the Forum, the United States Information 
Agency shall disseminate regularly, through multiple media, economic 
information in support of the free market economic reforms described in 
this Act.
  (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 7. UNITED STATES-SUB-SAHARAN AFRICA FREE TRADE AREA.

  (a) Declaration of Policy.--The Congress declares that a United 
States-Sub-Saharan Africa Free Trade Area should be established, or 
free trade agreements should be entered into, in order to serve as the 
catalyst for increasing trade between the United States and sub-Saharan 
Africa and increasing private sector development in sub-Saharan Africa.
  (b) Plan Requirement.--
          (1) In general.--The President, taking into account the 
        provisions of the treaty establishing the African Economic 
        Community and the willingness of the governments of Sub-Saharan 
        African countries to engage in negotiations to enter into free 
        trade agreements, shall develop a plan for the purpose of 
        entering into one or more trade agreements with sub-Saharan 
        African countries eligible under section 4 in order to 
        establish a United States-Sub-Saharan Africa Free Trade Area 
        (hereafter in this section referred to as the ``Free Trade 
        Area'').
          (2) Elements of plan.--The plan shall include the following:
                  (A) The specific objectives of the United States with 
                respect to the establishment of the Free Trade Area and 
                a suggested timetable for achieving those objectives.
                  (B) The benefits to both the United States and sub-
                Saharan Africa with respect to the Free Trade Area.
                  (C) A mutually agreed-upon timetable for establishing 
                the Free Trade Area.
                  (D) The implications for and the role of regional and 
                sub-regional organizations in sub-Saharan Africa with 
                respect to the Free Trade Area.
                  (E) Subject matter anticipated to be covered by the 
                agreement for establishing the Free Trade Area and 
                United States laws, programs, and policies, as well as 
                the laws of participating eligible African countries 
                and existing bilateral and multilateral and economic 
                cooperation and trade agreements, that may be affected 
                by the agreement or agreements.
                  (F) Procedures to ensure the following:
                          (i) Adequate consultation with the Congress 
                        and the private sector during the negotiation 
                        of the agreement or agreements for establishing 
                        the Free Trade Area.
                          (ii) Consultation with the Congress regarding 
                        all matters relating to implementation of the 
                        agreement or agreements.
                          (iii) Approval by the Congress of the 
                        agreement or agreements.
                          (iv) Adequate consultations with the relevant 
                        African governments and African regional and 
                        subregional intergovernmental organizations 
                        during the negotiations of the agreement or 
                        agreements.
  (c) Reporting Requirement.--Not later than 12 months after the date 
of the enactment of this Act, the President shall prepare and transmit 
to the Congress a report containing the plan developed pursuant to 
subsection (b).

SEC. 8. ELIMINATING TRADE BARRIERS AND ENCOURAGING EXPORTS.

  (a) Findings.--The Congress makes the following findings:
          (1) The lack of competitiveness of sub-Saharan Africa in the 
        global market, especially in the manufacturing sector, make it 
        a limited threat to market disruption and no threat to United 
        States jobs.
          (2) Annual textile and apparel exports to the United States 
        from sub-Saharan Africa represent less than 1 percent of all 
        textile and apparel exports to the United States, which totaled 
        $45,932,000,000 in 1996.
          (3) Sub-Saharan Africa has limited textile manufacturing 
        capacity. During 1998 and the succeeding 4 years, this limited 
        capacity to manufacture textiles and apparel is projected to 
        grow at a modest rate. Given this limited capacity to export 
        textiles and apparel, it will be very difficult for these 
        exports from sub-Saharan Africa, during 1998 and the succeeding 
        9 years, to exceed 3 percent annually of total imports of 
        textile and apparel to the United States. If these exports from 
        sub-Saharan Africa remain around 3 percent of total imports, 
        they will not represent a threat to United States workers, 
        consumers, or manufacturers.
  (b) Sense of the Congress.--It is the sense of the Congress that--
          (1) it would be to the mutual benefit of the countries in 
        sub-Saharan Africa and the United States to ensure that the 
        commitments of the World Trade Organization and associated 
        agreements are faithfully implemented in each of the member 
        countries, so as to lay the groundwork for sustained growth in 
        textile and apparel exports and trade under agreed rules and 
        disciplines;
          (2) reform of trade policies in sub-Saharan Africa with the 
        objective of removing structural impediments to trade, 
        consistent with obligations under the World Trade Organization, 
        can assist the countries of the region in achieving greater and 
        greater diversification of textile and apparel export 
        commodities and products and export markets; and
          (3) the President should support textile and apparel trade 
        reform in sub-Saharan Africa by, among other measures, 
        providing technical assistance, sharing of information to 
        expand basic knowledge of how to trade with the United States, 
        and encouraging business-to-business contacts with the region.
  (c) Treatment of Quotas.--
          (1) Kenya and mauritius.--Pursuant to the Agreement on 
        Textiles and Clothing, the United States shall eliminate the 
        existing quotas on textile and apparel exports to the United 
        States--
                  (A) from Kenya within 30 days after that country 
                adopts a cost-effective and efficient visa system to 
                guard against unlawful transshipment of textile and 
                apparel goods; and
                  (B) from Mauritius within 30 days after that country 
                adopts such a visa system.
        The Customs Service shall provide the necessary assistance to 
        Kenya and Mauritius in the development and implementation of 
        those visa systems. The Customs Service shall monitor and the 
        Commissioner of Customs shall submit to the Congress, not later 
        than March 31 of each year, a report on the effectiveness of 
        those visa systems during the preceding calendar year.
          (2) Other sub-saharan countries.--The President shall 
        continue the existing no quota policy for countries in sub-
        Saharan Africa. The President shall submit to the Congress, not 
        later than March 31 of each year, a report on the growth in 
        textiles and apparel exports to the United States from 
        countries in sub-Saharan Africa in order to protect United 
        States consumers, workers, and textile manufacturers from 
        economic injury on account of the no quota policy. The 
        President should ensure that any country in sub-Saharan Africa 
        that intends to export substantial textile and apparel goods to 
        the United States has in place a functioning and efficient visa 
        system to guard against unlawful transshipment of textile and 
        apparel goods.
  (d) Definition.--For purposes of this section, the term ``Agreement 
on Textiles and Clothing'' means the Agreement on Textiles and Clothing 
referred to in section 101(d)(4) of the Uruguay Round Agreements Act 
(19 U.S.C. 3511(d)(4)).

SEC. 9. GENERALIZED SYSTEM OF PREFERENCES.

  (a) Preferential Tariff Treatment for Certain Articles.--Section 
503(a)(1) of the Trade Act of 1974 (19 U.S.C. 2463(a)) is amended--
          (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
          (2) by inserting after subparagraph (B) the following:
                  ``(C) Eligible countries in sub-saharan africa.--The 
                President may provide duty-free treatment for any 
                article set forth in paragraph (1) of subsection (b) 
                that is the growth, product, or manufacture of an 
                eligible country in sub-Saharan Africa that is a 
                beneficiary developing country, if, after receiving the 
                advice of the International Trade Commission in 
                accordance with subsection (e), the President 
                determines that such article is not import-sensitive in 
                the context of imports from eligible countries in sub-
                Saharan Africa. This subparagraph shall not affect the 
                designation of eligible articles under subparagraph 
                (B).''.
  (b) Rules of Origin.--Section 503(a)(2) of the Trade Act of 1974 (19 
U.S.C. 2463(a)(2)) is amended by adding at the end the following:
                  ``(C) Eligible countries in sub-saharan africa.--For 
                purposes of determining the percentage referred to in 
                subparagraph (A) in the case of an article of an 
                eligible country in sub-Saharan Africa that is a 
                beneficiary developing country--
                          ``(i) if the cost or value of materials 
                        produced in the customs territory of the United 
                        States is included with respect to that 
                        article, an amount not to exceed 15 percent of 
                        the appraised value of the article at the time 
                        it is entered that is attributed to such United 
                        States cost or value may be applied toward 
                        determining the percentage referred to in 
                        subparagraph (A); and
                          ``(ii) the cost or value of the materials 
                        included with respect to that article that are 
                        produced in any beneficiary developing country 
                        that is an eligible country in sub-Saharan 
                        Africa shall be applied in determining such 
                        percentage.''.
  (c) Waiver of Competitive Need Limitation.--Section 503(c)(2)(D) of 
the Trade Act of 1974 (19 U.S.C. 2463(c)(2)(D)) is amended to read as 
follows:
                  ``(D) Least-developed beneficiary developing 
                countries and eligible countries in sub-saharan 
                africa.--Subparagraph (A) shall not apply to any least-
                developed beneficiary developing country or any 
                eligible country in sub-Saharan Africa.''.
  (d) Extension of Program.--Section 505 of the Trade Act of 1974 (19 
U.S.C. 2465) is amended to read as follows:

``SEC. 505. DATE OF TERMINATION.

  ``(a) Countries in Sub-Saharan Africa.--No duty-free treatment 
provided under this title shall remain in effect after May 31, 2007, 
with respect to beneficiary developing countries that are eligible 
countries in sub-Saharan Africa.
  ``(b) Other Countries.--No duty-free treatment provided under this 
title shall remain in effect after May 31, 1997, with respect to 
beneficiary developing countries other than those provided for in 
subsection (a).''.
  (e) Definition.--Section 507 of the Trade Act of 1974 (19 U.S.C. 
2467) is amended by adding at the end the following:
          ``(6) Eligible country in sub-saharan africa.--The terms 
        `eligible country in sub-Saharan Africa' and `eligible 
        countries in sub-Saharan Africa' means a country or countries 
        that the President has determined to be eligible under section 
        4 of the African Growth and Opportunity Act.''.

SEC. 10. INTERNATIONAL FINANCIAL INSTITUTIONS AND DEBT REDUCTION.

  (a) Better Mechanisms To Further Goals for Sub-Saharan Africa.--It is 
the sense of the Congress that the Secretary of the Treasury should 
instruct the United States Executive Directors of the International 
Bank for Reconstruction and Development, the International Monetary 
Fund, and the African Development Bank to use the voice and votes of 
the Executive Directors to encourage vigorously their respective 
institutions to develop enhanced mechanisms which further the following 
goals in eligible countries in sub-Saharan Africa:
          (1) Strengthening and expanding the private sector, 
        especially among women-owned businesses.
          (2) Reducing tariffs, nontariff barriers, and other trade 
        obstacles, and increasing economic integration.
          (3) Supporting countries committed to accountable government, 
        economic reform, the eradication of poverty, and the building 
        of civil societies.
          (4) Supporting deep debt reduction at the earliest possible 
        date with the greatest amount of relief for eligible poorest 
        countries under the ``Heavily Indebted Poor Countries'' (HIPC) 
        debt initiative.
  (b) Sense of Congress.--It is the sense of the Congress that relief 
provided to countries in sub-Saharan Africa which qualify for the 
Heavily Indebted Poor Countries debt initiative should primarily be 
made through grants rather than through extended-term debt, and that 
interim relief or interim financing should be provided for eligible 
countries that establish a strong record of macroeconomic reform.
  (c) Executive Branch Initiatives.--The Congress supports and 
encourages the implementation of the following initiatives of the 
executive branch:
          (1) American-african business partnership.--The Agency for 
        International Development devoting up to $1,000,000 annually to 
        help catalyze relationships between United States firms and 
        firms in sub-Saharan Africa through a variety of business 
        associations and networks.
          (2) Technical assistance to promote reforms.--The Agency for 
        International Development providing up to $5,000,000 annually 
        in short-term technical assistance programs to help the 
        governments of sub-Saharan African countries to--
                  (A) liberalize trade and promote exports;
                  (B) bring their legal regimes into compliance with 
                the standards of the World Trade Organization in 
                conjunction with membership in that Organization; and
                  (C) make financial and fiscal reforms, as well as the 
                United States Department of Agriculture providing 
                support to promote greater agribusiness linkages.
          (3) Agricultural market liberalization.--The Agency for 
        International Development devoting up to $15,000,000 annually 
        as part of the multi-year Africa Food Security Initiative to 
        help address such critical agricultural policy issues as market 
        liberalization, agricultural export development, and 
        agribusiness investment in processing and transporting 
        agricultural commodities.
          (4) Trade promotion.--The Trade Development Agency increasing 
        the number of reverse trade missions to growth-oriented 
        countries in sub-Saharan Africa.
          (5) Trade in services.--Efforts by United States embassies in 
        the countries in sub-Saharan Africa to encourage their host 
        governments--
                  (A) to participate in the ongoing negotiations on 
                financial services in the World Trade Organization;
                  (B) to revise their existing schedules to the General 
                Agreement on Trade in Services of the World Trade 
                Organization in light of the successful conclusion of 
                negotiations on basic telecommunications services; and
                  (C) to make further commitments in their schedules to 
                the General Agreement on Trade in Services in order to 
                encourage the removal of tariff and nontariff barriers 
                and to foster competition in the services sector in 
                those countries.

SEC. 11. SUB-SAHARAN AFRICA EQUITY AND INFRASTRUCTURE FUNDS.

  (a) Initiation of Funds.--It is the sense of the Congress that the 
Overseas Private Investment Corporation should, within 12 months after 
the date of the enactment of this Act, exercise the authorities it has 
to initiate 2 or more equity funds in support of projects in the 
countries in sub-Saharan Africa.
  (b) Structure and Types of Funds.--
          (1) Structure.--Each fund initiated under subsection (a) 
        should be structured as a partnership managed by professional 
        private sector fund managers and monitored on a continuing 
        basis by the Corporation.
          (2) Capitalization.--Each fund should be capitalized with a 
        combination of private equity capital, which is not guaranteed 
        by the Corporation, and debt for which the Corporation provides 
        guaranties.
          (3) Types of funds.--
                  (A) Equity fund for sub-saharan africa.--One of the 
                funds should be an equity fund, with assets of up to 
                $150,000,000, the primary purpose of which is to 
                achieve long-term capital appreciation through equity 
                investments in support of projects in countries in sub-
                Saharan Africa.
                  (B) Infrastructure fund.--One or more of the funds, 
                with combined assets of up to $500,000,000, should be 
                used in support of infrastructure projects in countries 
                of sub-Saharan Africa. The primary purpose of any such 
                fund would be to achieve long-term capital appreciation 
                through investing in financing for infrastructure 
                projects in sub-Saharan Africa, including for the 
                expansion of businesses in sub-Saharan Africa, 
                restructurings, management buyouts and buyins, 
                businesses with local ownership, and privatizations.
          (4) Emphasis.--The Corporation shall ensure that the funds 
        are used to provide support in particular to women 
        entrepreneurs and to innovative investments that expand 
        opportunities for women and maximize employment opportunities 
        for poor individuals.

SEC. 12. OVERSEAS PRIVATE INVESTMENT CORPORATION AND EXPORT-IMPORT BANK 
                    INITIATIVES.

  (a) Overseas Private Investment Corporation.--
          (1) Advisory committee.--Section 233 of the Foreign 
        Assistance Act of 1961 is amended by adding at the end the 
        following:
  ``(e) Advisory Committee.--The Board shall take prompt measures to 
increase the loan, guarantee, and insurance programs, and financial 
commitments, of the Corporation in sub-Saharan Africa, including 
through the establishment and use of an advisory committee to assist 
the Board in developing and implementing policies, programs, and 
financial instruments with respect to sub-Saharan Africa. In addition, 
the advisory committee shall make recommendations to the Board on how 
the Corporation can facilitate greater support by the United States for 
trade and investment with and in sub-Saharan Africa. The advisory 
committee shall terminate 4 years after the date of the enactment of 
this subsection.''.
          (2) Reports to the congress.--Within 6 months after the date 
        of the enactment of this Act, and annually for each of the 4 
        years thereafter, the Board of Directors of the Overseas 
        Private Investment Corporation shall submit to the Congress a 
        report on the steps that the Board has taken to implement 
        section 233(e) of the Foreign Assistance Act of 1961 and any 
        recommendations of the advisory board established pursuant to 
        such section.
  (b) Export-Import Bank.--
          (1) Advisory committee for sub-saharan africa.--Section 2(b) 
        of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)) is 
        amended by inserting after paragraph (8) the following:
  ``(9)(A) The Board of Directors of the Bank shall take prompt 
measures, consistent with the credit standards otherwise required by 
law, to promote the expansion of the Bank's financial commitments in 
sub-Saharan Africa under the loan, guarantee, and insurance programs of 
the Bank.
  ``(B)(i) The Board of Directors shall establish and use an advisory 
committee to advise the Board of Directors on the development and 
implementation of policies and programs designed to support the 
expansion described in subparagraph (A).
  ``(ii) The advisory committee shall make recommendations to the Board 
of Directors on how the Bank can facilitate greater support by United 
States commercial banks for trade with sub-Saharan Africa.
  ``(iii) The advisory committee shall terminate 4 years after the date 
of the enactment of this subparagraph.''.
          (2) Reports to the congress.--Within 6 months after the date 
        of the enactment of this Act, and annually for each of the 4 
        years thereafter, the Board of Directors of the Export-Import 
        Bank of the United States shall submit to the Congress a report 
        on the steps that the Board has taken to implement section 
        2(b)(9)(B) of the Export-Import Bank Act of 1945 and any 
        recommendations of the advisory committee established pursuant 
        to such section.

SEC. 13. ESTABLISHMENT OF ASSISTANT UNITED STATES TRADE REPRESENTATIVE 
                    FOR SUB-SAHARAN AFRICA.

  (a) Establishment.--The President shall establish a position of 
Assistant United States Trade Representative within the Office of the 
United States Trade Representative to focus on trade issues relating to 
sub-Saharan Africa.
  (b) Funding and Staff.--The President shall ensure that the Assistant 
United States Trade Representative appointed pursuant to paragraph (1) 
has adequate funding and staff to carry out the duties described in 
paragraph (1).

SEC. 14. EXPANSION OF THE UNITED STATES AND FOREIGN COMMERCIAL SERVICE 
                    IN SUB-SAHARAN AFRICA.

  (a) Sense of the Congress.--It is the sense of the Congress that the 
United States and Foreign Commercial Service should expand its presence 
in sub-Saharan Africa by increasing the number of posts and the number 
of personnel it allocates to sub-Saharan Africa.
  (b) Reporting Requirement.--Not later than 120 days after the date of 
the enactment of this Act, the Secretary of Commerce, in consultation 
with the Secretary of State, should report to the Congress on the 
feasibility of expanding the presence in sub-Saharan Africa of the 
United States and Foreign Commercial Service.

SEC. 15. REPORTING REQUIREMENT.

  The President shall submit to the Congress, not later than 1 year 
after the date of the enactment of this Act, and not later than the end 
of each of the next 4 1-year periods thereafter, a report on the 
implementation of this Act.

SEC. 16. SUB-SAHARAN AFRICA DEFINED.

  For purposes of this Act, the terms ``sub-Saharan Africa'', ``sub-
Saharan African country'', ``country in sub-Saharan Africa'', and 
``countries in sub-Saharan Africa'' refer to the following:
          Republic of Angola (Angola)
          Republic of Botswana (Botswana)
          Republic of Burundi (Burundi)
          Republic of Cape Verde (Cape Verde)
          Republic of Chad (Chad)
          Democratic Republic of Congo
          Republic of the Congo (Congo)
          Republic of Djibouti (Djibouti)
          State of Eritrea (Eritrea)
          Gabonese Republic (Gabon)
          Republic of Ghana (Ghana)
          Republic of Guinea-Bissau (Guinea-Bissau)
          Kingdom of Lesotho (Lesotho)
          Republic of Madagascar (Madagascar)
          Republic of Mali (Mali)
          Republic of Mauritius (Mauritius)
          Republic of Namibia (Namibia)
          Federal Republic of Nigeria (Nigeria)
          Democratic Republic of Sao Tome and Principe (Sao Tome and 
        Principe)
          Republic of Sierra Leone (Sierra Leone)
          Somalia
          Kingdom of Swaziland (Swaziland)
          Republic of Togo (Togo)
          Republic of Zimbabwe (Zimbabwe)
          Republic of Benin (Benin)
          Burkina Faso (Burkina)
          Republic of Cameroon (Cameroon)
          Central African Republic
          Federal Islamic Republic of the Comoros (Comoros)
          Republic of Cote d'Ivoire (Cote d'Ivoire)
          Republic of Equatorial Guinea (Equatorial Guinea)
          Ethiopia
          Republic of the Gambia (Gambia)
          Republic of Guinea (Guinea)
          Republic of Kenya (Kenya)
          Republic of Liberia (Liberia)
          Republic of Malawi (Malawi)
          Islamic Republic of Mauritania (Mauritania)
          Republic of Mozambique (Mozambique)
          Republic of Niger (Niger)
          Republic of Rwanda (Rwanda)
          Republic of Senegal (Senegal)
          Republic of Seychelles (Seychelles)
          Republic of South Africa (South Africa)
          Republic of Sudan (Sudan)
          United Republic of Tanzania (Tanzania)
          Republic of Uganda (Uganda)
          Republic of Zambia (Zambia)

                         Background and Purpose

    H.R. 1432, the African Growth and Opportunity Act (AGOA), 
is the product of years of bipartisan congressional efforts to 
promote increased trade and investment between the United 
States and sub-Saharan Africa. The bill authorizes a new trade 
and investment policy toward the countries of sub-Saharan 
Africa and expresses the willingness of the U.S. to assist the 
eligible countries of the region with the reduction of trade 
barriers, the creation of an Economic Cooperation Forum, the 
promotion of a free trade area and a variety of other trade and 
aid related mechanisms.
    The bill has very broad support in the Congress and in the 
International Relations Committee. Recently, the Administration 
has also become supportive of the legislation.
    AGOA would set up a series of mechanisms by which the 
President would determine the eligibility of a specific sub-
Saharan African nation to participate in the programs and 
benefits listed in the bill. The President shall determine 
eligibility based on adherence to human rights norms and 
demonstrated commitment to economic policy reform, as specified 
in Section 4.
    The President shall take into account additional factors 
when considering AGOA eligibility including an expression of 
its commitment to be an eligible country and the extent to 
which the country has made substantial progress in the 
reduction of tariff levels, the binding of its tariff levels in 
the World Trade Organization, and eliminating non-tariff 
barriers to trade. These additional factors are also elaborated 
on in Section 4.
    With the end of the Cold War and the demise of apartheid in 
South Africa, sub-Saharan Africa has opened up to the world as 
never before. Numerous countries are moving toward democracy, 
liberalizing their economies and seeking a better standard of 
living for their people. The United States has played a role in 
these changes with development assistance and other means. With 
AGOA, the Congress directs the Overseas Private Investment 
Corporation and the Export-Import Bank to establish special 
advisory committees that would help expand exports to and 
investment in the countries of the region.
    Africa is a continent of 48 nations and over 500 million 
people. It supplies many important natural resources to the 
United States, from petroleum to uranium to timber. Trade 
between the U.S. and Africa is greater than that between the 
U.S. and the former Soviet Union and Eastern Europe combined. 
Yet, there exists great possibilities for this trade to be 
expanded.
    Many African nations are only now starting to make the 
economic reforms necessary for them to become part of the world 
economy. Barriers to foreign investment are coming down and 
investor-friendly laws are being written. Two-thirds of African 
nations have adopted significant macro-economic policy reforms.
    In 1996, thirty-one African nations experienced growth in 
real per capita income. Senegal, Ghana, Ethiopia and Cote 
d'Ivoire are among the fastest growing economies in the world. 
The United States is the largest recipient (at 18%) of Africa's 
exports, but is only the fifth largest exporter to Africa.
    The new economic realities of Africa must be reflected in a 
new U.S. government approach to the continent. Currently, the 
imperatives of development assistance and humanitarian relief 
drive U.S. policies toward African nations. While these should 
continue to remain priorities, the considerable talent of the 
U.S. foreign policy apparatus should also be directed towards 
the promotion of stronger trade and investment ties between 
Americans and Africans.
    This is the purpose of AGOA.

                            Committee Action

    H.R. 1432, ``The African Growth and Opportunity Act'' was 
introduced by Representative Crane on April 24, 1997 and was 
referred to the Committee on International Relations and in 
addition to the Committee on Ways and Means and Banking and 
Financial Services for a period to be subsequently determined 
by the Speaker.
    On May 8, the bill was referred to the Subcommittee on 
Africa and on May 22 that subcommittee held a mark-up of H.R. 
1432. By voice vote, the subcommittee adopted an amendment in 
the nature of a substitute offered by Subcommittee Chairman 
Edward Royce of California that provided for enhanced 
transparency and monitoring in the process of deciding which 
countries will participate in the benefits of the Act. It also 
asked the United States Information Agency to assist in the 
establishment of the United States-Sub-Saharan Africa Trade and 
Economic Cooperation Forum by disseminating information 
regarding the free market economic reforms contained in the 
Act.
    The Subcommittee also adopted an amendment by voice vote 
offered by the ranking Democratic member, Mr. Menendez from New 
Jersey expressing the sense of Congress that the Foreign 
Commercial Service of the Department of Commerce should expand 
its presence in sub-Saharan Africa by increasing the number of 
posts and the number of personnel it allocates to that region. 
It also contains a reporting requirement from the Secretary of 
Commerce on the feasibility of increasing the presence of the 
Foreign Commercial Service in Africa.
    By voice vote, the Subcommittee adopted an amendment 
offered by Mr. Payne from New Jersey that requires the 
President to take into account whether any sub-Saharan country 
is engaging in activities that undermine U.S. national security 
or foreign policy interests. Also adopted by voice vote was an 
amendment offered by Mr. Campbell from California that struck 
``Zaire'' from the list of defined countries and substituted in 
its place the ``Democratic Republic of Congo''. A motion to 
report the bill, as amended, to the Full Committee passed by 
voice vote.
    On June 25, the Full Committee marked up the bill in open 
session, pursuant to notice.
    The Committee first considered an amendment in the nature 
of a substitute, offered by Mr. Gilman and recommended by the 
Subcommittee on Africa, by unanimous consent, as original text 
for the purpose of amendment.
    An en bloc amendment to the amendment in the nature of a 
substitute was offered, and adopted by voice vote, by the 
Chairman of the Committee, Mr. Benjamin Gilman from New York, 
that includes: (1) A sense of Congress provision barring a 
country's eligibility from the benefits under the Act to the 
extent it engages in a consistent pattern of human rights 
violations; (2) a series of clarifying and conforming changes 
throughout the bill; (3) a provision requiring the Overseas 
Private Investment Corporation, OPIC, to establish an advisory 
committee to assist the OPIC Board in developing and 
implementing policies with respect to sub-Saharan Africa; and 
(4) a series of provisions requested by the Chairman of the 
Committee on Banking and Financial Services, Mr. Jim Leach from 
Iowa.
    These banking-related provisions express the sense of 
Congress that the Secretary of the Treasury should instruct the 
U.S. Executive Directors at the International Bank for 
Reconstruction and Development, the International Monetary Fund 
and the African Development Bank to use their voice and vote in 
these institutions to support policy goals that expand the 
private sector; reduce tariff and non-tariff barriers; support 
countries committed to accountable government, economic reform, 
eradication of poverty and the building of civil societies; and 
encourage the adoption of deep debt reduction under the 
``Heavily Indebted Poor Countries'' (HIPC) debt initiative. 
These provisions also direct the Export-Import Bank to 
establish an advisory Committee for sub-Saharan Africa.
    Mr. Smith from New Jersey offered an amendment to the 
amendment in the nature of a substitute which included a human 
rights provision in the eligibility requirements section of the 
Act. It provides for the eligibility of a sub-Saharan country 
if the President determines that it does not engage in gross 
violations of internationally recognized human rights. The 
amendment passed by voice vote.
    Mr. Payne from New Jersey offered an amendment that 
conditioned the exercise of the waiver authority in Section 5 
of the bill relating to the Development Fund for Africa. The 
amendment specified that the President would have to notify the 
appropriate congressional committees pursuant to the 
reprogramming notifications of section 634A of the Foreign 
Assistance Act that the waiver of any earmark would provide 
improved conditions for the people of Africa. The amendment 
passed by voice vote.
    The Committee adopted the amendment in the nature of a 
substitute, as amended, by voice vote.
    A quorum being present, the Full Committee by voice vote 
ordered the bill reported to the House with the recommendation 
that the bill, as amended, do pass.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto. No recorded votes developed during the consideration 
of this legislation.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
the findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    The Committee adopts the cost estimate of the Congressional 
Budget Office, set out below, as its submission of any required 
information on new budget authority, new spending authority, 
new credit authority, or an increase or decrease in the 
national debt required by clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    Section 12(a) of H.R. 1432 as reported provides for the 
establishment of an ``advisory committee'' to the Board of the 
Overseas Private Investment Corporation to assist the Board in 
developing and implementing policies, programs, and financial 
instruments with respect to sub-Saharan Africa, and to make 
recommendation to the Board on how the Corporation can 
facilitate greater support by the United States for trade and 
investment with and in sub-Saharan Africa. The advisory 
committee would terminate 4 years after the date of enactment. 
Section 12(b) provides for the establishment of an advisory 
Committee to the Board of Directors of the Export-Import Bank 
to assist the Board for similar purposes as the advisory 
committee established under section 12(a). The advisory 
committee thus established would also terminate after 4 years. 
In the view of the Committee, the work of these panels are not 
and could not be accomplished by one or more other agencies or 
by an advisory committee or committees already in existence, or 
by enlarging the mandate of an existing advisory committee or 
committees.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                   Constitutional Authority Statement

    In compliance with clause 2(l)(4) of rule XI of the Rules 
of the House of Representatives, the Committee cites the 
following specific powers granted to the Congress in the 
Constitution as authority for enactment of H.R. 1432 as 
reported by the Committee: Article I, section 8, clause 3 
(relating to the regulation of commerce with foreign nations 
and among the several states); and Article I, section 8, clause 
18 (relating to making all laws necessary and proper for 
carrying into execution powers vested by the Constitution in 
the government of the United States).

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(3)(C) of rule XI of the 
Rules of the House of Representatives, the Committee sets forth 
with respect to H.R. 1432 as reported by the Committee the 
following estimate and comparison prepared by the Director of 
the Congressional Budget Office under section 403 of the Budget 
Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 9, 1997.
Hon. Benjamin A. Gilman,
Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1432, the African 
Growth and Opportunity Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephanie 
Weiner.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 1432--The African Growth and Opportunity Act

    Summary: H.R. 1432 would authorize a new trade and 
investment policy for sub-Saharan Africa. CBO estimates that 
enacting the trade preferences in the bill would reduce 
governmental receipts by about $46 million in 1998 and $234 
million over the 1998-2002 period, net of income and payroll 
tax offsets. Because enacting H.R. 1432 would affect receipts 
in 1998, pay-as-you-go procedures would apply to the bill. In 
addition, subject to appropriation of the necessary funds, CBO 
estimates that implementing H.R. 1432 would result in 
additional discretionary spending of $3 million over the 1998-
2002 period.
    H.R. 1432 contains no new private-sector or 
intergovernmental mandates as defined in the Unfunded Mandates 
Reform Act of 1995 (UMRA), and would not impose any costs on 
state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1432 is shown in the following table.


----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--      
                                                           -----------------------------------------------------
                                                              1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                                    REVENUES                                                    
                                                                                                                
Proposed Changes..........................................        0      -46      -44      -46      -48      -50
                                                                                                                
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Estimated Authorization Level.............................        0        1    (\1\)    (\1\)    (\1\)    (\1\)
Estimated Outlays.........................................        0        1    (\1\)    (\1\)    (\1\)    (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         
                                                                                                                
Note.--The outlay effects of this legislation fall within budget function 800 (general government).             

            Revenues
    The Generalized System of Preferences (GSP) affords 
nonreciprocal tariff preferences to approximately 145 
developing countries to aid their economic development and to 
diversify and expand their production and exports. The United 
States GSP expired on May 31, 1997. H.R. 1432 would renew GSP 
for eligible sub-Saharan African countries, retroactive to May 
31, 1997, and extend the program through May 31, 2007. The bill 
also would amend the program to lessen the rule of origin and 
competitive need limitation requirements for products from the 
region. CBO estimates that the renewal of GSP for those 
countries would reduce governmental receipts by about $194 
million over the 1998-2002 period. CBO assumes that this 
provision would be effective October 1, 1997.
    This provision was estimated independently of the proposal 
in the House-passed version of H.R. 2014 that would reinstate 
GSP to all beneficiary countries, through May 31, 1999. Should 
that proposal be enacted first, the renewal of GSP for sub-
Saharan African countries in H.R. 1432 would be effective from 
May 31, 1999, through May 31, 2007, and would reduce receipts 
by $125 million over the 1998-2002 period.
    In addition, the bill would authorize the President to 
grant duty-free GSP treatment for products currently excluded 
from GSP that the International Trade Commission 
(ITC)determines are not import-sensitive in the context of imports from 
sub-Saharan Africa. CBO estimates that this provision would reduce 
governmental receipts by about $40 million over the 1998-2002 period. 
This estimate assumes that some products (including most textile and 
apparel goods) that have been considered import-sensitive by ITC in the 
past would remain ineligible for GSP under the bill. CBO assumes that 
the expansion of products from sub-Saharan Africa eligible for GSP 
would be effective October 1, 1998. H.R. 1432 also would eliminate the 
existing textile quotas on imports from Kenya and Mauritius, if these 
countries adopt an effective visa system to guard against 
transhipments. CBO estimates that this provision would have a 
negligible effect on receipts.
    The ITC is currently conducting a study, expected to be 
released in September 1997, to determine the impact of 
extending quota-free and duty-free treatment to textile and 
apparel imports from sub-Saharan Africa. This estimate is 
subject to change pending ITC's findings.
            Spending subject to appropriations
    Section 6 would establish a forum consisting of high-level 
officials of the United States government and the governments 
of sub-Saharan African countries. The forum would meet annually 
to foster trade and economic ties, and the first meeting would 
be hosted by the United States. Based on experience with the 
Asia-Pacific Economic Cooperation and information from the 
Office of the United States Trade Representative, CBO estimates 
that the costs could run as high as $1 million for the initial 
meeting during fiscal year 1998 and less than $500,000 annually 
for subsequent meetings.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act of 1985 sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts through 1998. CBO estimates that H.R. 1432 would 
reduce receipts by $46 million in 1998.
    Intergovernmental and private-sector impact: The bill 
contains no new private-sector or intergovernmental mandates as 
defined in UMRA, and would not impose any costs on state, 
local, or tribal governments.
    Estimate prepared by: Federal Cost: Stephanie Weiner. 
Impact on State, Local, and Tribal Governments: Pepper 
Santalucia. Impact on the Private Sector: Lesley Frymier.
    Estimate approved by: Rosemary Marcuss, Assistant Director 
for Tax Analysis.

                Jurisdictional Issues and Other Matters

    The following material is included for the interest of 
Members:

                          House of Representatives,
               Committee on Banking and Financial Services,
                                  Washington, DC, October 28, 1997.
Hon. Newt Gingrich,
Speaker,
The Capitol.
    Dear Mr. Speaker: I am writing concerning H.R. 1432, the 
``Africa Growth and Opportunity Act,'' which the House of 
Representatives may consider later this year. The legislation 
contains two provisions falling within the jurisdiction of the 
Committee on Banking and Financial Services under Rule X of the 
Rules of the House of Representatives. These provisions are 
found in Sections 10 and 12.
    The Banking Committee strongly applauds this bipartisan 
initiative to enhance U.S. economic engagement with sub-Saharan 
Africa. This is a timely and important effort to help integrate 
the reform-minded countries of sub-Saharan Africa into the 
world economy, emphasizing expanded U.S. trade and investment 
ties.
    The Committee is pleased to report that during 
consideration of H.R. 1432 by the Committee on International 
Relations and the Committee on Ways and Means, the Banking 
Committee's language concerning the international financial 
institutions and the Heavily Indebted Poor Country debt 
initiative (HIPC), as well as the Committee's language creating 
an Advisory Committee on sub-Saharan Africa for the Export-
Import Bank of the United States (Eximbank), was incorporated 
into the bill as amended. As a result, the Committee has no 
need to consider and mark up H.R. 1432.
    By way of background, Section 10 of the bill contains 
language relating to the international financial institutions 
and the HIPC debt initiative. This provision falls under the 
jurisdiction of the Banking Committee related to international 
financial and monetary organizations. Section 12 would 
establish an Eximbank Advisory Committee on sub-Saharan Africa. 
This provision falls under the jurisdiction of the Banking 
Committee related to international finance. The Committee 
addressed these issues in H.R. 1488, the International 
Financial Institution Reform and Authorization Act of 1997, and 
in H.R. 1370, legislation to reauthorize the Export-Import Bank 
of the United States. In conclusion, the Banking Committee 
appreciates the cooperation extended to it by the Committee on 
International Relations and the Committee on Ways and Means. 
Because the Committee's legislative language has already been 
incorporated into the bill as amended, the Banking Committee 
declines to exercise its jurisdiction over H.R. 1432 and 
requests to be discharged of further consideration of Sections 
10 and 12 without prejudice.
            Sincerely,
                                          James A. Leach, Chairman.

                      Section-by-Section Analysis

                         Section 1. Short Title

    This section states that this Act may be cited as the 
``African Growth and Opportunity Act''.

                          Section 2. Findings

    The Congress finds that it is in the mutual economic 
interest of the United States and sub-Saharan Africa to promote 
sustainable economic growth and development in sub-Saharan 
Africa The U.S. seeks to assist these sub-Saharan African 
countries to achieve economic self-reliance by (1) 
strengthening the private sector, especially women-owned 
businesses; (2) encouraging increased trade and investment 
between the United States and sub-Saharan Africa; (3) reducing 
trade barriers; (4) expanding assistance to regional 
integration efforts; (5) negotiating free trade areas; (6) 
establishing a Trade and Investment Partnership and an Economic 
Cooperation Forum between the U.S. and sub-Saharan Africa; (7) 
focusing on those countries committed to accountable 
government, reform and the eradication of poverty; and (8) 
continuing to support development assistance for those 
countries attempting to build civil societies.

                     Section 3. Statement of Policy

    This section reiterates congressional support for economic 
self-reliance in sub-Saharan African nations, particularly 
those countries committed to economic and political reforms; 
market incentives and private sector growth; eradication of 
poverty and the importance of women to economic growth and 
development.

                  Section 4. Eligibility Requirements

    This section describes the mechanism by which sub-Saharan 
African nations become eligible for programs and benefits of 
AGOA. The President shall determine eligibility based on 
adherence to human rights norms and and demonstrated commitment 
to economic policy reform. The President shall ``take into 
account'' other factors when making his determination.
    Human Rights. As described in subsection (a), a country 
that the President determines does not engage in gross 
violations of internationally recognized human rights shall be 
eligible. Subsection (d) elaborates further the sense of 
Congress that a country should not be eligible if the 
government of that country is determined by the President to 
engage in a ``consistent pattern'' of gross violations of 
internationally recognized human rights.
    Economic Reform. To be eligible under the AGOA, a country 
must also make continual progress toward establishing a market 
economy, as evidenced by the establishment and enforcement of 
policies: (1) Promoting free movement of goods between the U.S. 
and sub-Saharan Africa; (2) promoting the expansion of the 
production base and the transformation of commodities for 
exports through joint ventures between African and foreign 
investors; (3) protecting intellectual property rights and 
improving product testing, labeling and certification; (4) 
protecting property rights and against expropriation; (5) 
reducing import and corporate taxes, controlling government 
consumption and participating in bilateral investment treaties; 
(6) providing national treatment for foreign investors and a 
policy environment conducive to domestic and foreign 
investment; (7) supporting the growth of regional markets; (8) 
supporting an end to corruption and government interference in 
the marketplace; (9) supporting a new generation of African 
entrepreneurs; (10) encouraging divestiture of government-
controlled economic enterprises; (11) removing investment 
restrictions; and (12) observing the rule of law.
    Additional Factors. The President shall take into account 
additional factors when considering AGOA eligibility including 
an expression of its commitment to be an eligible country and 
the extent to which the country has made substantial progress 
in the reduction of tariff levels, the binding of its tariff 
levels in the World Trade Organization, and eliminating non-
tariff barriers to trade. In addition, the President should 
also take into account whether the country is already a member 
of the World Trading Organization or is pursuing membership in 
that body; the extent to which the country is in compliance 
with its obligations to the International Monetary Fund; the 
extent to which the country has a commitment to reducing 
poverty, providing basic education for its citizens, providing 
access to market and credit facilities for small farmers and 
improving economic opportunities for women as entrepreneurs; 
and the extent to which a country engages in activities that 
undermine the national security or the foreign policy interests 
of the United States.
    Continuing Compliance. Subsection (c) requires the 
President to continually monitor sub-Saharan African nations' 
compliance with subsection (a) and include quantitative 
evaluations in the annual report required by section 15. 
Subsection (c) further states that nations not making continual 
progress toward the requirements listed in subsection (a) shall 
not be eligible under AGOA.

Section 5. Additional Authorities and Increased Flexibility to Provide 
            Assistance Under the Development Fund for Africa

    Subsections (a) and (b) make a number of statements of 
policy regarding the Development Fund for Africa and the 
African Development Foundation and their roles in promoting 
stronger economic links between the United States and sub-
Saharan African nations. In particular, it is noted that 
sustainable development, as advanced by the U.S. Agency for 
International Development, is an essential component in any 
effort to promote trade and investment in Africa. The bill 
encourages USAID to continue to support programs that advance 
sustainable development, including investments in human 
resources, development and implementation of free market 
policies, including policies to liberalize agricultural markets 
and improve food security, and the support for the rule of law 
and democratic governance.
    Other activities that enhance trade and investment 
possibilities include: strengthening primary and vocational 
education systems, strengthening health care systems, 
strengthening family planning service delivery systems, 
supporting democratization, good governance and civil society 
and conflict resolution efforts, increasing food security, 
promoting an enabling environment for private sector-led 
growth, promoting decentralization and local participation in 
the development process, increasing technical and managerial 
capacity of Africans, and ensuring sustainable economic growth 
through environmental protection.
     Subsection (c) amends the Foreign Assistance Act of 1961, 
as amended, to provide increased flexibility to the Agency for 
International Development in providing program assistance 
promoting democratization, good government and strong civil 
societies and strengthening conflict resolution capabilities of 
governmental, intergovernmental and non-governmental entities 
in sub-Saharan Africa.
    Subsection (d) amends the Foreign Assistance Act of 1961 to 
provide additional authority to the President to waive 
provisions of law that earmark funds provided under the 
Development Fund for Africa, Chapter 10 of Part 1 of the 
Foreign Assistance Act, as amended if the President determines 
that the waiver of such law would provide improved conditions 
for the people of Africa. The waiver does not apply to 
provisions of law that earmark funds for child survival 
activities, as enumerated in the amendment.

    Section 6. United States-Sub-Saharan Africa Trade and Economic 
                           Cooperation Forum

    This section directs the President to convene, on an annual 
basis, meetings of high-level officials between the government 
of the United States and those nations in sub-Saharan Africa 
that meet the requirements of AGOA. The first of these meetings 
(the Forum) shall take place not less than twelve months after 
the passage of AGOA. In creating the Forum, the President is 
required to meet the following requirements: (1) Direct certain 
U.S. cabinet officials to meet with their counterparts of 
eligible African nations at the first Forum and include the 
Secretary-General of the Organization of African Unity to 
discuss trade and investment issues; (2) encourage, in 
consultation with Congress, participation of the private sector 
and American and African NGOs in the Forum; and (3) meet with 
the heads of state of eligible African nations not less than 
once every two years beginning in the first year after the 
passage of AGOA. The section further provides for the 
dissemination of information about the Forum by the United 
States Information Agency. Funds necessary to carry out this 
section are authorized.

      Section 7. United States-Sub-Saharan Africa Free Trade Area

    Not in HIRC jurisdiction.

     Section 8. Eliminating Trade Barriers and Encouraging Exports

    Not in HIRC jurisdiction.

              Section 9. Generalized System of Preferences

    Not in HIRC jurisdiction.

  Section 10. International Financial Institutions and Debt Reduction

    Several of the following provisions fall within the 
jurisdiction of the Committee on Banking and Financial Services 
and are included in AGOA pursuant to a request by the Chairman 
of that Committee, Mr. Leach. Subsection (a) expresses the 
sense of Congress that the U. S. Executive Directors at the 
International Bank for Reconstruction and Development, the 
International Monetary Fund and the African Development Bank 
work to strengthen the private sector, the reduction of trade 
barriers, economic reform, the eradication of poverty as well 
as deep debt reduction in eligible countries under the 
``Heavily Indebted Poor Countries'' (HIPC) initiative. 
Subsection (b) expresses the sense of Congress that whatever 
debt relief is provided under HIPC it be made through grants 
rather than through extended term debt.
    Subsection (c) contains an expression of support for a 
number of the initiatives of the Executive Branch including 
business partnerships, technical assistance, agricultural 
market liberalization, trade promotion and trade in services.

     Section 11. Sub-Saharan Africa Equity and Infrastructure Funds

    Subsection (a) expresses the sense of Congress that OPIC, 
within one year of the date of enactment of this Act, shall 
launch two or more equity funds in support ofprojects in sub-
Saharan Africa. Subsection (b) describes the structure and types of 
these funds, including provisions for a $150 million equity fund and a 
$500 million infrastructure project fund. The Corporation is directed 
to ensure that both funds are used to provide support in particular to 
women entrepreneurs and to maximize employment opportunities for poor 
individuals.

 Section 12. Overseas Private Investment Corporation And Export-Import 
                            Bank Initiatives

    Section 12(a) amends Section 233 of the Foreign Assistance 
Act of 1961 to direct the Board of the Overseas Private 
Investment Corporation to increase its programs and financial 
commitments in sub-Saharan Africa including through the 
establishment of an advisory committee assisting the Board in 
the development of policies and programs toward sub-Saharan 
Africa. The advisory committee shall terminate after four 
years. Within six months of the date of enactment of this Act, 
the OPIC Board shall submit to Congress a report on its 
implementation of this section and the findings and 
recommendations of the advisory board. Annually thereafter for 
the next four years, in its annual report to Congress, OPIC 
shall provide updates about its implementation and 
recommendations of the advisory committee.
    Pursuant to Section 12(b) the Export-Import Bank is also 
directed to increase its loan, guarantee and insurance programs 
to sub-Saharan Africa, consistent with its other credit 
standards, and to establish an advisory committee on sub-
Saharan Africa with the same mandate life span and periodic 
reporting requirements under the previous subsection.

      Section 13. Establishment of Assistant United States Trade 
                 Representative For Sub-Saharan Africa

    Not in HIRC jurisdiction.

   Section 14. Expansion of the United States and Foreign Commercial 
                     Service in Sub-Saharan Africa

    This section expresses the sense of Congress that the 
Foreign Commercial Service of the Department of Commerce should 
expand its presence in sub-Saharan Africa by increasing the 
number of posts and personnel it allocates to that region. Not 
more than 120 days after the enactment of the bill, it directs 
the Secretary of Commerce to report on the feasibility of 
increasing the presence of the Foreign Commercial Service in 
Africa.

                   Section 15. Reporting Requirement

    This section requires the President to submit to Congress, 
within one year of the enactment of AGOA, and again not later 
than the end of each of the next four years, a report on the 
implementation of AGOA.
    The Committee expects that these reports will detail the 
reasons why each specific country was deemed eligible or 
ineligible by the President for programs and benefits under 
AGOA. In particular, the extent to which each country has made 
progress on the criteria listed in subsection 4(a) should be 
included in the reports.

                 Section 16. Sub-Saharan Africa Defined

    The Committee amended this list to reflect the new name, 
Democratic Republic of Congo, of the former Republic of Zaire.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                     FOREIGN ASSISTANCE ACT OF 1961

          * * * * * * *

                                 PART I

          * * * * * * *

                       Chapter 2--Other Programs

          * * * * * * *
  Sec. 233. Organization and Management.--(a) * * *
          * * * * * * *
  (e) Advisory Committee.--The Board shall take prompt measures 
to increase the loan, guarantee, and insurance programs, and 
financial commitments, of the Corporation in sub-Saharan 
Africa, including through the establishment and use of an 
advisory committee to assist the Board in developing and 
implementing policies, programs, and financial instruments with 
respect to sub-Saharan Africa. In addition, the advisory 
committee shall make recommendations to the Board on how the 
Corporation can facilitate greater support by the United States 
for trade and investment with and in sub-Saharan Africa. The 
advisory committee shall terminate 4 years after the date of 
the enactment of this subsection.
          * * * * * * *

                Chapter 10--Development Fund for Africa

          * * * * * * *
  Sec. 496. Long-Term Development Assistance for Sub-Saharan 
Africa.--(a) * * *
          * * * * * * *
  (h) Types of Assistance.--
          (1) * * *
          * * * * * * *
          (3) Democratization and conflict resolution 
        capabilities.--Assistance under this section may also 
        include program assistance--
                  (A) to promote democratization, good 
                governance, and strong civil societies in sub-
                Saharan Africa; and
                  (B) to strengthen conflict resolution 
                capabilities of governmental, 
                intergovernmental, and nongovernmental entities 
                in sub-Saharan Africa.
          [(3)] (4) Other assistance.--Funds made available to 
        carry out this section shall be used almost exclusively 
        for assistance in accordance with [paragraphs (1) and 
        (2)] paragraphs (1), (2), and (3). Assistance 
        consistent with the purpose of subsection (c) may also 
        be furnished under this section to carry out the 
        provisions of sections 103 through 106 of this Act.
          * * * * * * *
  (p) Waiver Authority.--
          (1) In general.--Except as provided in paragraph (2), 
        the President may waive any provision of law that 
        earmarks, for a specified country, organization, or 
        purpose, funds made available to carry out this chapter 
        if the President determines, subject to the 
        notification procedures under section 634A, that the 
        waiver of such provision of law would provide improved 
        conditions for the people of Africa. The President 
        shall notify the appropriate congressional committees, 
        in accordance with the procedures applicable to 
        reprogramming notifications under section 634A of this 
        Act, at least 15 days before any determination under 
        this paragraph takes effect.
          (2) Exceptions.--
                  (A) Child survival activities.--The authority 
                contained in paragraph (1) may not be used to 
                waive a provision of law that earmarks funds 
                made available to carry out this chapter for 
                the following purposes:
                          (i) Immunization programs.
                          (ii) Oral rehydration programs.
                          (iii) Health and nutrition programs, 
                        and related education programs, which 
                        address the needs of mothers and 
                        children.
                          (iv) Water and sanitation programs.
                          (v) Assistance for displaced and 
                        orphaned children.
                          (vi) Programs for the prevention, 
                        treatment, and control of, and research 
                        on, tuberculosis, HIV/AIDS, polio, 
                        malaria, and other diseases.
                          (vii) Basic education programs for 
                        children.
                          (viii) Contribution on a grant basis 
                        to the United Nations Children's Fund 
                        (UNICEF) pursuant to section 301 of 
                        this Act.
                  (B) Requirement to supersede waiver 
                authority.--The provisions of this subsection 
                shall not be superseded except by a provision 
                of law enacted after the date of the enactment 
                of the African Growth and Opportunity Act which 
                specifically repeals, modifies, or supersedes 
                such provisions.
          * * * * * * *
                              ----------                              


                           TRADE ACT OF 1974

          * * * * * * *

               TITLE V--GENERALIZED SYSTEM OF PREFERENCES

          * * * * * * *

SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.

  (a) Eligible Articles.--
          (1) Designation.--
                  (A) * * *
          * * * * * * *
                  (C) Eligible countries in sub-saharan 
                africa.--The President may provide duty-free 
                treatment for any article set forth in 
                paragraph (1) of subsection (b) that is the 
                growth, product, or manufacture of an eligible 
                country in sub-Saharan Africa that is a 
                beneficiary developing country, if, after 
                receiving the advice of the International Trade 
                Commission in accordance with subsection (e), 
                the President determines that such article is 
                not import-sensitive in the context of imports 
                from eligible countries in sub-Saharan Africa. 
                This subparagraph shall not affect the 
                designation of eligible articles under 
                subparagraph (B).
                  [(C)] (D) Three-year rule.--If, after 
                receiving the advice of the International Trade 
                Commission under subsection (e), an article has 
                been formally considered for designation as an 
                eligible article under this title and denied 
                such designation, such article may not be 
                reconsidered for such designation for a period 
                of 3 years after such denial.
          (2) Rule of origin.--
                  (A) * * *
          * * * * * * *
                  (C) Eligible countries in sub-saharan 
                africa.--For purposes of determining the 
                percentage referred to in subparagraph (A) in 
                the case of an article of an eligible country 
                in sub-Saharan Africa that is a beneficiary 
                developing country--
                          (i) if the cost or value of materials 
                        produced in the customs territory of 
                        the United States is included with 
                        respect to that article, an amount not 
                        to exceed 15 percent of the appraised 
                        value of the article at the time it is 
                        entered that is attributed to such 
                        United States cost or value may be 
                        applied toward determining the 
                        percentage referred to in subparagraph 
                        (A); and
                          (ii) the cost or value of the 
                        materials included with respect to that 
                        article that are produced in any 
                        beneficiary developing country that is 
                        an eligible country in sub-Saharan 
                        Africa shall be applied in determining 
                        such percentage.
          * * * * * * *
  (c) Withdrawal, Suspension, or Limitation of Duty-Free 
Treatment; Competitive Need Limitation.--
          (1) * * *
          (2) Competitive need limitation.--
                  (A) * * *
          * * * * * * *
                  [(D) Least-developed beneficiary developing 
                countries.--Subparagraph (A) shall not apply to 
                any least-developed beneficiary developing 
                country.]
                  (D) Least-developed beneficiary developing 
                countries and eligible countries in sub-saharan 
                africa.--Subparagraph (A) shall not apply to 
                any least-developed beneficiary developing 
                country or any eligible country in sub-Saharan 
                Africa.
          * * * * * * *

[SEC. 505. DATE OF TERMINATION.

  [No duty-free treatment provided under this title shall 
remain in effect after May 31, 1997.]

SEC. 505. DATE OF TERMINATION.

  (a) Countries in Sub-Saharan Africa.--No duty-free treatment 
provided under this title shall remain in effect after May 31, 
2007, with respect to beneficiary developing countries that are 
eligible countries in sub-Saharan Africa.
  (b) Other Countries.--No duty-free treatment provided under 
this title shall remain in effect after May 31, 1997, with 
respect to beneficiary developing countries other than those 
provided for in subsection (a).
          * * * * * * *

SEC. 507. DEFINITIONS.

    For purposes of this title:
          (1) * * *
          * * * * * * *
          (6) Eligible country in sub-saharan africa.--The 
        terms ``eligible country in sub-Saharan Africa'' and 
        ``eligible countries in sub-Saharan Africa'' means a 
        country or countries that the President has determined 
        to be eligible under section 4 of the African Growth 
        and Opportunity Act.
          * * * * * * *
                              ----------                              


            SECTION 2 OF THE EXPORT-IMPORT BANK ACT OF 1945

  Sec. 2. (a) * * *
  (b)(1) * * *
          * * * * * * *
  (9)(A) The Board of Directors of the Bank shall take prompt 
measures, consistent with the credit standards otherwise 
required by law, to promote the expansion of the Bank's 
financial commitments in sub-Saharan Africa under the loan, 
guarantee, and insurance programs of the Bank.
  (B)(i) The Board of Directors shall establish and use an 
advisory committee to advise the Board of Directors on the 
development and implementation of policies and programs 
designed to support the expansion described in subparagraph 
(A).
  (ii) The advisory committee shall make recommendations to the 
Board of Directors on how the Bank can facilitate greater 
support by United States commercial banks for trade with sub-
Saharan Africa.
  (iii) The advisory committee shall terminate 4 years after 
the date of the enactment of this subparagraph.
          * * * * * * *

                                
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