[House Report 106-19]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
1st Session             HOUSE OF REPRESENTATIVES         106-19, Part 1
_______________________________________________________________________


 
                   AFRICAN GROWTH AND OPPORTUNITY ACT

                                _______
                                

               February 16, 1999.--Ordered to be printed

_______________________________________________________________________


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

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 434]

  The Committee on International Relations, to whom was 
referred the bill (H.R. 434) 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 and that 
sustained economic growth in sub-Saharan Africa depends in large 
measure upon the development of a receptive environment for trade and 
investment. 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) the protection of internationally recognized worker 
        rights, including the right of association, the right to 
        organize and bargain collectively, a prohibition on the use of 
        any form of forced or compulsory labor, a minimum age for the 
        employment of children, and acceptable conditions of work with 
        respect to minimum wages, hours of work, and occupational 
        safety and health;
          (6) 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;
          (7) foreign investment issues, such as the provision of 
        national treatment for foreign investors, removing restrictions 
        on investment, and other measures to create an environment 
        conducive to domestic and foreign investment;
          (8) supporting the growth of regional markets within a free 
        trade area framework;
          (9) 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;
          (10) supporting the growth of the private sector, in 
        particular by promoting the emergence of a new generation of 
        African entrepreneurs;
          (11) encouraging the private ownership of government-
        controlled economic enterprises through divestiture programs; 
        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, increasing the availability of 
        health care and educational opportunities, 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, and 
        promoting and enabling the formation of capital to support the 
        establishment and operation of micro-enterprises.
          (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.

SEC. 5. 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 Congress 
and 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 including encouraging joint 
        ventures between small and large businesses.
          (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.
  (f) Limitation on Use of Funds.--None of the funds authorized under 
this section may be used to create or support any nongovernmental 
organization for the purpose of expanding or facilitating trade between 
the United States and sub-Saharan Africa.

SEC. 6. 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. 7. 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 
        $54,001,863,000 in 1997.
          (3) Sub-Saharan Africa has limited textile manufacturing 
        capacity. During 1999 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 1999 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 an efficient visa system to guard against 
                unlawful transshipment of textile and apparel goods and 
                the use of counterfeit documents; and
                  (B) from Mauritius within 30 days after that country 
                adopts such a visa system.
        The Customs Service shall provide the necessary technical 
        assistance to Kenya and Mauritius in the development and 
        implementation of those visa systems.
          (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.
  (d) Customs Procedures and Enforcement.--
          (1) Actions by countries against transshipment and 
        circumvention.--The President should ensure that any country in 
        sub-Saharan Africa that intends to export textile and apparel 
        goods to the United States--
                  (A) has in place a functioning and effective visa 
                system and domestic laws and enforcement procedures to 
                guard against unlawful transshipment of textile and 
                apparel goods and the use of counterfeit documents; and
                  (B) will cooperate fully with the United States to 
                address and take action necessary to prevent 
                circumvention, as provided in Article 5 of the 
                Agreement on Textiles and Clothing.
          (2) Penalties against exporters.--If the President 
        determines, based on sufficient evidence, that an exporter has 
        willfully falsified information regarding the country of 
        origin, manufacture, processing, or assembly of a textile or 
        apparel article for which duty-free treatment under section 
        503(a)(1)(C) of the Trade Act of 1974 is claimed, then the 
        President shall deny to such exporter, and any successors of 
        such exporter, for a period of 2 years, duty-free treatment 
        under such section for textile and apparel articles.
          (3) Applicability of united states laws and procedures.--All 
        provisions of the laws, regulations, and procedures of the 
        United States relating to the denial of entry of articles or 
        penalties against individuals or entities for engaging in 
        illegal transshipment, fraud, or other violations of the 
        customs laws shall apply to imports from Sub-Saharan countries.
          (4) Monitoring and reports to congress.--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 the visa systems described in subsection 
        (c)(1) and paragraph (1) of this subsection and on measures 
        taken by countries in Sub-Saharan Africa which export textiles 
        or apparel to the United States to prevent circumvention as 
        described in Article 5 of the Agreement on Textiles and 
        Clothing.
  (e) 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. 8. 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)(1)) 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 June 30, 2009, 
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 June 30, 1999, 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' mean a country or countries 
        that the President has determined to be eligible under section 
        4 of the African Growth and Opportunity Act.''.
  (f) Effective Date.--The amendments made by this section take effect 
on July 1, 1999.

SEC. 9. 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.

SEC. 10. EXECUTIVE BRANCH INITIATIVES.

  (a) Statement of Congress.--The Congress recognizes that the stated 
policy of the executive branch in 1997, the ``Partnership for Growth 
and Opportunity in Africa'' initiative, is a step toward the 
establishment of a comprehensive trade and development policy for sub-
Saharan Africa. It is the sense of the Congress that this Partnership 
is a companion to the policy goals set forth in this Act.
  (b) Technical Assistance To Promote Economic Reforms and 
Development.--In addition to continuing bilateral and multilateral 
economic and development assistance, the President shall target 
technical assistance toward--
          (1) developing relationships between United States firms and 
        firms in sub-Saharan Africa through a variety of business 
        associations and networks;
          (2) providing assistance to 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;
                  (C) make financial and fiscal reforms; and
                  (D) promote greater agribusiness linkages;
          (3) addressing such critical agricultural policy issues as 
        market liberalization, agricultural exportdevelopment, and 
agribusiness investment in processing and transporting agricultural 
commodities;
          (4) increasing the number of reverse trade missions to 
        growth-oriented countries in sub-Saharan Africa;
          (5) increasing trade in services; and
          (6) encouraging greater sub-Saharan participation in future 
        negotiations in the World Trade Organization on services and 
        making further commitments in their schedules to the General 
        Agreement on Trade in Services in order to encourage the 
        removal of tariff and nontariff barriers.

SEC. 11. SUB-SAHARAN AFRICA INFRASTRUCTURE FUND.

  (a) Initiation of Funds.--It is the sense of the Congress that the 
Overseas Private Investment Corporation should exercise the authorities 
it has to initiate an equity fund or equity funds in support of 
projects in the countries in sub-Saharan Africa, in addition to the 
existing equity fund for sub-Saharan Africa created by the Corporation.
  (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) 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.
          (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 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 (as added 
        by paragraph (1)) 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 (12) the following:
  ``(13)(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 ofthe United States shall submit to the Congress a report 
on the steps that the Board has taken to implement section 2(b)(13)(B) 
of the Export-Import Bank Act of 1945 (as added by paragraph (1)) and 
any recommendations of the advisory committee established pursuant to 
such section.

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

  (a) Sense of Congress.--It is the sense of the Congress that the 
position of Assistant United States Trade Representative for African 
Affairs is integral to the United States commitment to increasing 
United States--sub-Saharan African trade and investment.
  (b) Maintenance of Position.--The President shall maintain a position 
of Assistant United States Trade Representative for African Affairs 
within the Office of the United States Trade Representative to direct 
and coordinate interagency activities on United States-Africa trade 
policy and investment matters and serve as--
          (1) a primary point of contact in the executive branch for 
        those persons engaged in trade between the United States and 
        sub-Saharan Africa; and
          (2) the chief advisor to the United States Trade 
        Representative on issues of trade with Africa.
  (c) Funding and Staff.--The President shall ensure that the Assistant 
United States Trade Representative for African Affairs has adequate 
funding and staff to carry out the duties described in subsection (b), 
subject to the availability of appropriations.

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

  (a) Findings.--The Congress makes the following findings:
          (1) The United States and Foreign Commercial Service 
        (hereafter in this section referred to as the ``Commercial 
        Service'') plays an important role in helping United States 
        businesses identify export opportunities and develop reliable 
        sources of information on commercial prospects in foreign 
        countries.
          (2) During the 1980s, the presence of the Commercial Service 
        in sub-Saharan Africa consisted of 14 professionals providing 
        services in eight countries. By early 1997, that presence had 
        been reduced by half to seven, in only four countries.
          (3) Since 1997, the Department of Commerce has slowly begun 
        to increase the presence of the Commercial Service in sub-
        Saharan Africa, adding five full-time officers to established 
        posts.
          (4) Although the Commercial Service Officers in these 
        countries have regional responsibilities, this kind of coverage 
        does not adequately service theneeds of United States 
businesses attempting to do business in sub-Saharan Africa.
          (5) The Congress has, on several occasions, encouraged the 
        Commercial Service to focus its resources and efforts in 
        countries or regions in Europe or Asia to promote greater 
        United States export activity in those markets.
          (6) Because market information is not widely available in 
        many sub-Saharan African countries, the presence of additional 
        Commercial Service Officers and resources can play a 
        significant role in assisting United States businesses in 
        markets in those countries.
  (b) Appointments.--Subject to the availability of appropriations, by 
not later than December 31, 2000, the Secretary of Commerce, acting 
through the Assistant Secretary of Commerce and Director General of the 
United States and Foreign Commercial Service, shall take steps to 
ensure that--
          (1) at least 20 full-time Commercial Service employees are 
        stationed in sub-Saharan Africa; and
          (2) full-time Commercial Service employees are stationed in 
        not less than ten different sub-Saharan African countries.
  (c) Commercial Service Initiative for Sub-Saharan Africa.--In order 
to encourage the export of United States goods and services to sub-
Saharan African countries, the Commercial Service shall make a special 
effort to--
          (1) identify United States goods and services which are not 
        being exported to sub-Saharan African countries but which are 
        being exported to those countries by competitor nations;
          (2) identify, where appropriate, trade barriers and 
        noncompetitive actions, including violations of intellectual 
        property rights, that are preventing or hindering sales of 
        United States goods and services to, or the operation of United 
        States companies in, sub-Saharan Africa;
          (3) present, periodically, a list of the goods and services 
        identified under paragraph (1), and any trade barriers or 
        noncompetitive actions identified under paragraph (2), to 
        appropriate authorities in sub-Saharan African countries with a 
        view to securing increased market access for United States 
        exporters of goods and services;
          (4) facilitate the entrance by United States businesses into 
        the markets identified under paragraphs (1) and (2); and
          (5) monitor and evaluate the results of efforts to increase 
        the sales of goods and services in such markets.
  (d) Reports to Congress.--Not later than one year after the date of 
the enactment of this Act, and each year thereafter for five years, the 
Secretary of Commerce, in consultation with the Secretary of State, 
shall report to the Congress on actions taken to carry out subsections 
(b) and (c). Each report shall specify--
          (1) in what countries full-time Commercial Service Officers 
        are stationed, and the number of such officers placed in each 
        such country;
          (2) the effectiveness of the presence of the additional 
        Commercial Service Officers in increasing United States exports 
        to sub-Saharan African countries; and
          (3) the specific actions taken by Commercial Service 
        Officers, both in sub-Saharan African countries and in the 
        United States, to carry out subsection (c), including 
        identifying a list of targeted export sectors and countries.

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 6 1-year periods thereafter, a comprehensive report 
on the trade and investment policy of the United States for sub-Saharan 
Africa, and on the implementation of this Act. The last report required 
by section 134(b) of the Uruguay Round Agreements Act (19 U.S.C. 
3554(b)) shall be consolidated and submitted with the first report 
required by this section.

SEC. 16. DONATION OF AIR TRAFFIC CONTROL EQUIPMENT TO ELIGIBLE SUB-
                    SAHARAN AFRICAN COUNTRIES.

  It is the sense of the Congress that, to the extent appropriate, the 
United States Government should make every effort to donate to 
governments of sub-Saharan African countries (determined to be eligible 
under section 4 of this Act) air traffic control equipment that is no 
longer in use, including appropriate related reimbursable technical 
assistance.

SEC. 17. 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)''.

SEC. 18. 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 or any 
successor political entities:
          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. 434, 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 it 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 UnitedStates 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.

                            Committee Action

               Introduction and Consideration of the Bill

    H.R. 434, The African Growth and Opportunity Act, was 
introduced by Representative Crane on February 2, 1999. It was 
referred to the Committee on International Relations, and in 
addition to the Committees on Ways and Means and Banking and 
Financial Services, for a period to be determined by the 
Speaker, in each case for consideration of such provisions as 
fall within the jurisdiction of the committee concerned.
    The Trade subcommittee of the Committee on Ways and Means 
held a hearing and marked up H.R. 434 on February 3, 1999.
    On February 9, the Subcommittee on Africa held a hearing on 
the bill with private sector witnesses. On February 11, it held 
a second hearing with the Assistant Secretary of State for 
African Affairs, Susan E. Rice.
    Immediately following the hearing, the full Committee held 
a mark up of the bill in open session, pursuant to notice.
    The Ranking Member, Rep. Gejdenson, offered an amendment 
adding internationally recognized worker rights and 
international environmental norms to the eligibility 
requirements in Section 4 of the bill. He called for a division 
of the question. The first part of his amendment, the worker 
rights provision, was adopted by voice vote; the second part, 
relating to the environment provision, was defeated by a voice 
vote.
    Rep. Brown offered, and then withdrew, an amendment 
providing for a cause of action in a United States District 
Court with respect to a workers' rights determination under 
subsection (a)(5) of Section 4.
    Rep. Sanford offered an amendment to Sections 11 and 12(a) 
deleting those provisions and thus any reference to the 
Overseas Private Investment Corporation and an OPIC 
Infrastructure Fund for Sub-Saharan Africa, or the advisory 
committee set up under Section 12(b). The amendment was 
defeated on a voice vote.
    Rep. Payne offered an amendment inserting a new text for 
Section 17 (and renumbering existing Section 17). The new text 
authorized various provisions of the Development Fund for 
Africa and made other changes to existing law. It was adopted 
by voice vote.
    Rep. McKinney offered, and then withdrew, an amendment 
providing for unconditional debt relief to all the countries of 
sub-Saharan Africa.
    At the conclusion of the reading of the bill for amendment, 
the Committee, by unanimous consent, adopted an amendment in 
the nature of a substitute consisting of the bill as amended to 
that point.
    After concluding the amending process, with a quorum being 
present, the Committee ordered the bill favorably reported to 
the House by a record vote of 24-8.

            Record Votes on Amendments and Motion to Report

    Clause (3)(b) of rule XIII of the Rules of the House of 
Representatives requires that the results of each record vote 
on an amendment or motion to report, together with the names of 
those voting for or against, be printed in the committee 
report.

Description of amendment, motion, order, or other proposition (Vote 
        during markup of H.R. 434--February 11, 1999)

    Vote No. 1.--On motion to favorably report H.R. 434, as 
amended.
    Voting yes: Gilman, Bereuter, Burton, Gallegly, Ros-
Lehtinen, Manzullo, Royce, Chabot, Houghton, Campbell, 
Tancredo, Gejdenson, Martinez, Payne, Menendez, McKinney, 
Hilliard, Wexler, Rothman, Davis, Pomeroy, Meeks, Crowley, and 
Hoeffel.
    Voting no: Goodling, Ballenger, Burr, Brown, Danner, 
Sherman, Delahunt, and Lee. Ayes, 24. Noes, 8.

                             Other Matters

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, theCommittee 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 Findings

    Clause 3(c)(4) of rule XIII of the Rules of the House of 
Representatives requires each committee report to contain a 
summary of the oversight findings and recommendations made by 
the Government Reform Committee pursuant to clause (4)(c)(2) of 
rule X of those Rules. The Committee on International Relations 
has received no such findings or recommendations from the 
Committee on Government Reform.

                      Advisory Committee Statement

    Section 12(a) of H.R. 434 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 the advisory 
committee to the Board of the Overseas Private Investment 
Corporation is 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. Because the Export-
Import Bank is not within the legislative jurisdiction of the 
Committee on International Relations, the Committee takes no 
position to the extent that the advisory committee to the Board 
of Directors of the Export-Import Bank could 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 3(d)(1) of rule XIII 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. 434 as reported 
by the Committee: Article I, section 8, clause 1 (relating to 
providing for the common defense and general welfare of the 
United States); Article I, section 8, clause 3 (relating to the 
regulation of commerce with foreign nations); 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).

                        Preemption Clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any committee on a bill or joint 
resolution to include a committee statement on the extent to 
which the bill or joint resolution is intended to preempt state 
or local law. The Committee states that H.R. 434 is not 
intended to preempt any state or local law.

New Budget Authority and Tax Expenditures, Congressional Budget Office 
             Cost Estimate, and Federal Mandates Statements

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives requires each committee report that accompanies 
a measure providing new budget authority, new spending 
authority, or new credit authority or changing revenues or tax 
expenditures to contain a cost estimate, as required by section 
308(a)(1) of the Congressional Budget Act of 1974, as amended, 
and, when practicable with respect to estimates of new budget 
authority, a comparison of the estimated funding level for the 
relevant program (or programs) to the appropriate levels under 
current law.
    Clause 3(d) of rule XIII of the Rules of the House of 
Representatives requires committees to include their own cost 
estimates in certain committee reports, which include, when 
practicable, a comparison of the total estimated funding level 
for the relevant program (or programs) with the appropriate 
levels under current law.
    Clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives requires the report of any committee on a 
measure which has been approved by the Committee to include a 
cost estimate prepared by the Director of the Congressional 
Budget Office, pursuant to section 403 of the Congressional 
Budget Act of 1974, if the cost estimate is timely submitted.
    Section 423 of the Congressional Budget Act requires the 
report of any committee on a bill or joint resolution that 
includes any Federal mandate to include specific information 
about such mandates. The Committee states that H.R. 434 does 
not include any Federal mandate.
    The Committee expects to adopt a cost estimate of the 
Congressional Budget Office as its own submission of any new 
required information related to H.R. 434 on new budget 
authority, new spending authority, new credit authority, or an 
increase or decrease in the national debt. It also expects to 
adopt the estimate of Federal mandates prepared by the Director 
of the Congressional Budget Office pursuant to section 423 of 
the Unfunded Mandates Reform Act. No estimate and report was 
received from the Congressional Budget Office.

                      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; (8) 
establishing a sub-Saharan African Economic Cooperation Forum; 
and (9) 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 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.
    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 Trade 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 protects internationally recognized 
worker rights, including the right to organize and bargain 
collectively, a prohibition on the use of any form of forced or 
compulsory labor, a minimum age for the employment of children, 
and acceptable conditions of work with respect to minimum 
wages, hours of work, and occupational safety and health; 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. 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 6. United States-Sub-Saharan Africa free trade area

    Not in HIRC jurisdiction.

Section 7. Eliminating trade barriers and encouraging exports

    Not in HIRC jurisdiction.

Section 8. Generalized system of preferences

    Not in HIRC jurisdiction.

Section 9. International financial institutions and debt reduction

    Not in HIRC jurisdiction.

Section 10. Executive branch initiatives

    This section expresses the sense of the Congress that the 
Administration's ``Partnership for Growth and Opportunity in 
Africa'' initiative is a companion to the policy goals set 
forth in this Act. It also directs the President to target 
technical assistance for the purpose of: promoting 
relationships between U.S. firms and firms in sub-Saharan 
Africa; liberalizing trade; bringing legal regimes into 
compliance with the standards of the World Trading 
Organization; making financial and fiscal reforms; promoting 
greater agribusiness linkages; addressing agricultural policy 
issues including market liberalization, agricultural export 
development, and agribusiness investment; increasing the number 
of reverse trade missions; increasing trade in services; and 
encouraging greater participation by sub-Saharan countries in 
future negotiations of the World Trade Organization.

Section 11. Sub-Saharan Africa infrastructure fund

    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 of projects 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. 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. Donation of air traffic control equipment to eligible Sub-
        Saharan African countries

    Sense of Congress that unused air traffic control equipment 
should be donated to African governments.

Section 17. 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 18. Sub-Saharan Africa defined

    The specification of Somalia shall not be construed to 
prevent the extension of provisions under this act to any parts 
of Somalia that might benefit from and qualify for such 
benefits, including, but not limited to, the area commonly 
known as Somaliland, even if other parts of Somalia would not 
be held to qualify for such benefits.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(g) 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):

                    TITLE V OF THE 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 June 30, 1999.]

SEC. 505. DATE OF TERMINATION.

  (a) Countries in Sub-Saharan Africa.--No duty-free treatment 
provided under this title shall remain in effect after June 30, 
2009, 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 June 30, 1999, 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'' mean a 
        country or countries that the President has determined 
        to be eligible under section 4 of the African Growth 
        and Opportunity Act.

           *       *       *       *       *       *       *

                              ----------                              


                     FOREIGN ASSISTANCE ACT OF 1961

                                 PART I

          * * * * * * *

           TITLE IV--OVERSEAS PRIVATE INVESTMENT CORPORATION

          * * * * * * *
  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 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.

           *       *       *       *       *       *       *

                              ----------                              


            SECTION 2 OF THE EXPORT-IMPORT BANK ACT OF 1945

  Sec. 2. (a) * * *
  (b)(1) * * *

           *       *       *       *       *       *       *

  (13)(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.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

    We, like our fellow Members of Congress, desire to improve 
the economic conditions of the people in Sub-Saharan Africa. We 
applaud current efforts and commend this Congress for its 
attention to the region. Unfortunately, we believe the 
provisions of the legislation recently passed by the 
International Relations Committee, H.R. 434, the African Growth 
& Opportunity Act, will not meet its intended goals. While the 
sections of the bill we find objectionable were not referred to 
the International Relations Committee for its consideration, we 
do not believe the Committee could or should be silent on those 
provisions we question. We could not in good conscience support 
the referred provisions and ignore the balance of the 
legislation. For this reason, we were forced to oppose this 
legislation in full Committee markup.
    The proponents of this legislation base their support of 
the bill on a number of flawed principles. Our primary 
objection to the legislation is centered on the likely massive 
increase in customs fraud, including a huge increase in the 
transshipment of Asian textile and apparel products, we believe 
will occur upon the enactment of this legislation. 
Additionally, this bill has other serious flaws: it allows 
Asian manufacturers to legally exploit an ineffective rule-of-
origin to gain the benefits of the bill by doing very little 
manufacturing in the bill's target region; it opens up the U.S. 
market without providing any reciprocal benefits to U.S. 
workers; it relies on a U.S. International Trade Commission 
(ITC) report that is seriously flawed; and it violates the 
commitments made by the Clinton Administration to maintain the 
balance of concessions whereby quota phaseouts and tariff 
reductions will follow the WTO agreement during the Uruguay 
Round GATT talks.
    As currently drafted, H.R. 434 creates a new incentive to 
transship and commit customs fraud in the form of dramatic 
savings from duty reductions for Asian textile and apparel 
manufacturers. For example, by transshipping garments from 
production facilities in Asia or doing only minor assembly work 
in Africa, manufacturers will reap huge benefits at the expense 
of American textile workers. Asian textile and apparel 
manufacturers pay more than $4 billion each year in duties to 
the United States Treasury. If these manufacturers can save 
billions by transshipping goods through the weak enforcement 
mechanisms provided in this bill, why won't they?
    This legislation also either fails to recognize, or simply 
ignores, the transshipping history of Asian textile and apparel 
manufacturers. These manufacturers have been illegally 
transshipping goods into the United States for more than 15 
years. In fact, the United States Customs Service has estimated 
that transshipments from Asia grew from $500 million in 1985 to 
$2 billion in 1995. This year, that number could actually be as 
high as $4 billion. According to U.S. Customs, Asian 
manufacturers have used more than 30 countries, including eight 
Sub-Saharan countries, as major transshipment routes. This 
legislation simply provides these manufacturers with a larger 
playing field.
    In addition, there is the potential for a flood of new 
transshipments from Asia under this legislation. At this time, 
only those manufacturers who fill quota have an incentive to 
transship. This applies mainly to manufacturers in China. Under 
this bill, which lowers duties from approximately 18% to zero, 
every Asian manufacturer which ships products to the United 
States will have an incentive to transship through Africa. In 
the textile and apparel sector, where profit margins are small, 
a duty savings of 18% represents an almost irresistible 
incentive to game the legal system.
    The enforcement mechanisms in H.R. 434 are flawed as well. 
The visa system that many supporters point to as the silver 
bullet of transshipment prevention will not stop this illegal 
activity. Every major Asian exporter currently operates under a 
visa system and transshipments still run into the billions of 
dollars each year. Visas have been used in Hong Kong since 
1976, but it is important toremember that Hong Kong is the 
largest transshipment port in the world. In 1997 alone, Hong Kong 
Customs found that 422 apparel factors of the 2,200 inspected, all of 
which used the visa system, were found to be involved in transshipping. 
The visa system was never designed to stop transshipments--it was 
designed to allow exporters to know exactly how much product they had 
shipped in order to prevent a violation of quota restrictions.
    The removal of trade benefits for two years for companies 
found to be in violation of the transshipping provisions 
provided in the bill is not prohibitive. One of the most widely 
used customs scams among transshipping exporters is for the 
company in question to simply change its name. Because US 
Customs lacks a permanent presence in many countries, and 
because its jurisdiction is severely limited by laws in foreign 
countries, it is almost impossible for US Customs to adequately 
enforce regulations. The great detail required to successfully 
prosecute a transshipping case against an overseas manufacturer 
severely limits the number of cases which can be successfully 
initiated.
    The overwhelming odds against US Customs requires US 
Customs requires African customs agencies to be the primary 
enforcers of our law, which is simply unfair. The customs 
agencies of these countries are poorly staffed, underequipped, 
underpaid, and under trained. Corruption in the carrying out of 
their duties, in a duty- and quota-free area three times the 
size of the United States, is a legitimate concern. In May 
1998, Acting USAID Administrator for Africa Carol Peasely 
testified before the Africa Subcommittee that ``Systemic 
corruption in Africa typically occurs in the management of 
public companies, in public markets, in fiscal administration, 
in customs and in the justice system.'' She also noted that 
``the problem is often fostered and encouraged by non-Africans 
seeking special status or privilege.'' HR 434 contains no 
requirements that African customs agencies be corruption-free, 
and there are no effective remedies against the country 
involved if systems fail and transshipments are allowed to 
continue.
    The bill's rule-of-origin stipulates that only 35% of the 
value of a garment must be added in a Sub-Saharan country for 
origin to be claimed. Under these rules the products 
components, from yarn to fabric to zippers and buttons, may be 
sourced from anywhere. It is almost guaranteed that these 
components will be sourced in Asia, where there is substantial 
over-capacity.
    This bill also represents a unilateral trade concession the 
likes of which this country has never seen. The supporters of 
the bill, with their votes in favor of passage, are doing 
nothing less than eliminating tariffs on over 2,000 United 
States textile and apparel products, while not requiring the 
beneficiary countries of the Sub-Saharan region to lower even a 
single tariff line by a single percentage point. South Africa 
will still be able to block United States exports with tariffs 
as high as 30%; Nigeria will be able to continue its ban on all 
textile imports from the United States; and the United States 
has no recourse under this bill if a beneficiary country 
decides to raise tariffs or even ban United States products 
altogether.
    The import sensitive nature of the textile and apparel 
sector in this country has long been acknowledged in our trade 
policy. That sensitivity is the very reason textiles and 
apparel were originally excluded from the Generalized System of 
Preferences program. This legislation not only strips textiles 
and apparel of their protected status, but also removes the 
Competitive Need Limitation which all other countries must 
adhere to and which prevents imports of GSP products from 
surging into the United States market. It also prevents the 
United States from instituting quotas in the event of import 
surges, which every country in the world has under the rules of 
the World Trade Organization.
    This bill relies on an International Trade Commission (ITC) 
study that is itself seriously flawed. The ITC report based its 
findings solely on an analysis of the competitive strengths of 
the textile and apparel sectors of the 48 beneficiary countries 
of the Sub-Saharan region. Despite the fact that six domestic 
industry organizations cited increased transshipment and 
customs fraud--not legal imports from Africa--as the primary 
threat from the bill, the ITC spent little of the report's 125 
pages reviewing the transshipment problem. In the report, the 
ITC cited three measures: a visa system, jump teams and quota 
chargebacks as potential weapons against transshipments. The 
Commission failed, however, to evaluate how those measures 
might be employed if free trade access was granted to Sub-
Saharan Africa or whether they have been successful in 
combating the transshipment problem. Despite the ITC's mandate 
to measure the potential impact of the legislation on the 
domestic industry, the ITC report failed to consider even 
whether the prospect of reducing duties from around 18% to zero 
would act as an additional incentive for increased 
transshipments and fraud from non-beneficiary countries.
    Finally, and perhaps most importantly, HR 434 violates 
commitments made by the Clinton Administration to the domestic 
textile and apparel industry. In a letter to Congress following 
the Uruguay Round trade talks, President Clinton promised the 
textile and apparel industry that it would receive ``gradual 
and even staging of tariff reductions and quota integration.'' 
The President elaborated, saying ``tariff cuts should be staged 
over a period at least as long as the phaseout of the Multi-
Fiber Agreement'' (MFA) and that the Administration did not 
intend ``to integrate sensitive products until the end of the 
phaseout period.'' In addition, President Clinton stated that 
he would insist ``that our willingness to phaseout the MFA be 
linked directly to the achievement of effective market access 
in individual countries by the removal of non-tariff barriers 
and the lowering of tariffs.'' This bill guts the commitments 
and promises President Clinton made to the hardworking textile 
and apparel workers of this country. Tariffs will go to zero 
immediately, quotas will be removed, and there is not a single 
shred of market access achieved for United States products. 
This bill, in effect, permits the de facto removal of tariff 
and quota controls on Asian textile and apparel manufacturers.
    If HR 434 is signed into law as currently written, the 
livelihoods of thousands of fiber, textile and apparel workers 
in this country will be threatened. We believe it will 
jeopardize existing trade agreements with Mexico and Canada and 
threaten special arrangements made with the nations of the 
Caribbean Basin Initiative. It will impose substantial new 
burdens on the United States Customs Service. It will cause 
substantial loss of revenue to the United States Treasury. And, 
contrary to the goals of the supporters of the bill and every 
Member of Congress, it will not benefit the people of Africa as 
intended.

                                   Richard Burr.
                                   Brad Sherman.
                                   Cass Ballenger.
                                   Bill Goodling.

                                
