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Thank you, Mr. Chairman. Let me begin by commending you and Representatives Payne, Houghton, Campbell, Chabot, Radanovich, and Meeks for your particularly strong efforts in support of the African Growth and Opportunity Act, as well as the other 60-plus co-sponsors, for introducing the legislation so early in the 106th Congress. I thank Congressmen Rangel, Crane, and McDermott for their long-term and steady leadership and note with great interest the unanimous Trade Subcommittee vote in favor of H.R. 434 last week. Finally, I want to thank the Africa Subcommittee for the opportunity today to convey the great importance the Administration attaches to this legislation. I was encouraged to see the bipartisan support the President received when he urged the House and the Senate, in his State of the Union address, to enact this bill as quickly as possible. Indeed, many in Congress, and people throughout our country, realize that this is the single-most important piece of legislation we have considered on Africa in more than a decade. We also recognize that this is a pivotal time in our relations with the African Continent. When the House approved the bill last March, the Administration was preparing for the first-ever comprehensive visit to Africa by a sitting American President. The visit highlighted Africa's substantial economic and political progress and laid out a vision for a new approach to U.S.-Africa policy, one founded on the principles of partnership embodied in this legislation. No longer is our approach rooted in Cold War, East versus West rivalries; today, we are seeking to work constructively with African nations in a spirit of mutual benefit and mutual respect. Africans and Americans share an interest in enhanced regional security, democracy, and global prosperity. Still, as we begin the process of building this partnership, we can not minimize the enormous challenges facing Africa and its people. Indeed, the news from the continent this past year often has been disheartening. The bombings of our embassies in Kenya and Tanzania last August were a sobering reminder of the real and continuous threat posed from global terrorism. This past weekend, Ethiopia and Eritrea, friends and allies of the United States, resumed fighting after a nine-month stalemate, seriously jeopardizing stability in the Horn of Africa. In recent months, we also have seen renewed conflict in Angola, the Congo, and Sierra Leone, clearly demonstrating Africa's progress has been neither linear nor universal. But it would be detrimental--both to our economic and our long-term security interests--to let problems entrenched in Africa's past cloud our approach to Africa's future. Despite continued instability in some areas, long-term trends are encouraging, and U.S. interests in Africa, growing. South Africa will hold its second national democratic election in a few months, and Nigeria is implementing a steady transition to civilian, democratic rule. Benin, Ghana, and Mali exemplify progress toward consolidating democracy and creating inclusive societies, and many nations are moving toward good governance and fighting corruption. Economies across the continent are registering positive growth rates, after years of stagnation in the 1980s. Some, such as once war-torn Mozambique, recorded double-digit growth rates last year. And the majority of African nations continue to implement far-reaching macroeconomic reforms, including liberalizing trade and investment regimes, reducing tariffs, rationalizing exchange rates, ending subsidies, modernizing regulatory regimes, and stabilizing their currencies. Both Africa's challenges and opportunities underscore the need to establish a long-term relationship with Africa that advances U.S. interests. The African Growth and Opportunity Act provides the framework for durable commercial partnerships with Africa's emerging markets, encourages successes, and builds on the progress many nations have achieved. It is thus key to meeting one of our primary goals in the region--integrating African nations more fully into the global economy. AGOA: Good for Africa This bill is good for Africa and good for America. As the African diplomatic corps has noted on many occasions, the Act includes substantial benefits for African nations undertaking necessary steps to participate fully in the world economy. As African countries reform and open their markets to our products and services, we will offer them incentives and assistance that will help them grow. Economic growth in turn will help alleviate endemic poverty--and the civil unrest which often accompanies it--leading to increased regional security. The African Growth and Opportunity Act would implement the trade provisions of the President's Partnership for Economic Growth and Opportunity. The bill establishes, as U.S. policy, support for economic self-reliance in Sub-Saharan Africa. For the first time, we will have a modest, yet revolutionary framework for using trade and investment as an economic development tool throughout Africa. For countries pursuing reforms, the Act expands duty-free access to the American market for goods now excluded under the Generalized System of Preferences program, and eliminates quotas on our imports of textiles and apparel. It also would extend the GSP program for 10 years in Africa, ensuring greater certainty for prospective traders and investors. The market access provisions of this bill are vital to our efforts to promote Africa's sustained economic growth in the next century. Developing countries around the world have traditionally relied on trade and investment-centered development to fuel the growth and diversification of a competitive economic base. Such an approach is nothing new to U.S. foreign economic policy. It is an approach tested and proven by time. Trade and investment helped rebuild Europe after World War II. Asian countries, like African countries today, once suffered from their dependence on primary commodities and lack of access to foreign capital. By opening our markets and encouraging receptive conditions for U.S. investment and exporters abroad, we were able to help Asia diversify their export bases and, in turn, become prosperous consumers of American products. Latin American economies are embarking on a similar path. I realize that these market access provisions have been opposed by some industry associations, and we want to work with them to allay their concerns regarding transshipment of textiles from other regions. The African Growth and Opportunity Act already contains strong anti-transshipment language. We must remember, as well, that African nations produce less than 1% of the textiles and apparel that the U.S. imports, and the International Trade Commission has determined that the effect of the market access provisions on the U.S. textile and apparel industry would be negligible. We want a bill with the broadest possible benefits for Africa and the United States, and this legislation has that. The potential gains for a number of Africa's relatively small economies could be significant. AGOA: Good For America Stimulating economic reform, improving two-way market access, and building strategic partnerships with Africa now makes sense for America's broader economic and political interests long-term. This has been confirmed by the many American companies and exporters that have testified on the bill's behalf. First, as economic reform takes hold, barriers to U.S. investment fall, and our businesses and labor are able to compete more effectively in Africa's emerging markets. Thus, the bill takes advantage of our most potent development tool: our private sector and its ability to create productive investments. If not for the recent reforms in Mozambique, for example, Enron Corporation would not have been able to sign a $2 billion agreement to lead a consortium in constructing a steel plant in Maputo. Mozambique has now become one of only five African countries to sign a bilateral investment treaty with the United States. Moreover, the genius of the bill is its linkage of market access provisions with eligibility criteria that encourage the proper conditions for U.S. trade and investment abroad. Contrary to some critics' charges of "neocolonialism," these criteria are strictly voluntary and do not penalize countries that choose not to participate in the bill's benefits. To the extent that countries participate, the bill will stimulate and encourage African-led market oriented reforms that enable the United States to develop stronger mutually beneficial business partnerships with Africa's opening economies. These business partnerships are key to a prosperous future for both the United States and Africa. We see African trade and investment as one of the world's great emerging economic opportunities and believe that the United States cannot be left behind. Our trade with Africa is already considerable. Last year, we exported over $6 billion of goods to the continent, and, as Secretary Daley testified last week, our exports appear to have risen 5% in 1998. And, today, offshore West and Central Africa join the Caspian Sea region as the hottest oil exploration regions in the world. One in every seven barrels of oil that the United States imports comes from Africa. One-third of our resurgent economic growth comes from exports, and 40% of those exports go to developing countries. Impressive as this may be, they are dwarfed by the opportunities that exist in this market of 700 million potential customers. In the coming decades, African countries will require a great deal of capital investment in areas from aircraft to information technologies to telecommunications. In all these areas, America leads the world. South Africa will be a prime purchaser of U.S. civil aircraft. Uganda has only 50,000 telephones for a population of 20 million, a ratio which is not uncommon among Africa's developing economies. Not surprisingly, African countries are among the strongest supporters of our efforts to introduce satellite phone services with global coverage, seeing it as a way to improve their infrastructure rapidly. Last week, you heard the Boeing Company testify that 66% of Africa's aircraft fleet is Boeing-built, representing $18 billion in U.S. high-technology exports. Boeing expects African nations to purchase over $30 billion worth of new aircraft in the next 20 years. We'd like to ensure that the majority of those purchases continue to be U.S.-made aircraft. Despite these enormous areas of potential growth, less than 1% of our global investment is in Africa, and two-way trade has lagged behind the rest of the world. In the wake of turmoil in other emerging markets--from Indonesia to Russia to Brazil--the United States and our companies cannot afford to ignore any emerging market. Africa in many ways is the last frontier for U.S. exporters and investors. Finally, and most importantly, a strong, stable, prosperous Africa will not only be a better economic partner, but a better partner for security and peace and a better partner in the fight against new transnational threats of terrorism, drug trafficking, crime, the spread of disease, and environmental degradation. Broad Support The benefits I've just outlined, for African interests and for our interests, go a long way in explaining the substantial support this bill has received. The bill's sponsors consulted African countries extensively in developing the legislation. The Organization of African Unity, the Common Market of Eastern and Southern Africa, the African Business Roundtable, and virtually all governments in Sub-Saharan Africa, including South Africa, have strongly endorsed the African Growth and Opportunity Act. From our side, a wide cross-section of Americans and concerned groups, including the National Conference of Black Mayors, the United States Conference of Mayors, Jack Kemp, David Dinkins, Andrew Young and C. Payne Lucas of Africare, and many companies that have already testified before Congress all support this legislation. Today, I would like to convey to you the depth of that support that has not only spread throughout the entire continent, but intensified over this past year during our debate here in Washington. In every single one of my trips to Africa, and in virtually all of my meetings with African heads of state, foreign and finance ministers, businesspeople, and non-governmental organizations, the question is asked: When will the African Growth and Opportunity Act be passed? The Alternatives The Administration does recognize that there are well-intentioned Members of Congress who believe that this bill does not go far enough in advancing sustained development in Africa. While I do not wish to address each detail of other proposals, I question the wisdom of legislation that demands a 100% unconditional cancellation of all debt owed to the World Bank and IMF. Alternative legislation only serves to obscure the clear and realistic goals set out in the African Growth and Opportunity Act. We cannot let a quest for the perfect be the enemy of the good. By doing so, we run the risk of obtaining nothing in our efforts to create a legislative cornerstone for the Administration's new economic engagement with Africa. We do not pretend that the African Growth Act will solve all of Africa's problems or transform its economies overnight. No legislation can do that. What it can do is offer an effective and pragmatic means to help Africa break free of old dependencies and to elevate our relationship to a mature partnership based on our common interests. Administration Support Let there be no doubt of the Administration's strong support for increased U.S. engagement in Africa. In addition to the President of the United States, Secretaries Albright, Rubin, Slater, Daley, Cohen, and Herman Export-Import Bank Chairman James Harmon and Deputy Secretary of Commerce Mallet have all traveled to the continent in the last 12 months. There has been substantial momentum in moving our relationship with Africa to a new level, and Congress has an opportunity to provide it with the biggest boost of all. Congressional approval of the Act will position the United States as a leader in a new Africa seeking to develop through trade and investment. It will demonstrate our commitment to Africa's welfare, and it will encourage the reforms conducive to American business. Indeed, with Congress' help, we are already moving forward to implement other proactive trade and investment policies through the President's Partnership for Economic Growth and Opportunity in Africa. This year, FY 1999, we are providing $245 million in bilateral concessional debt relief at a budget cost of $27 million. In FY 2000 we have requested an additional $17 million to relieve up to $230 million of debt. If authorized, our commitment in debt relief would be up to half a billion dollars. This year, as well, we are providing $30 million in technical assistance to Africa's strongest reformers. We have created an Office of the Assistant U.S. Trade Representative for Africa and an advisory branch and senior adviser on Africa at the Export-Import Bank. We are supporting African efforts to craft and ratify a binding anti-corruption convention. With the Washington-based Global Coalition on Africa and other agencies, the Administration is organizing a second meeting with 11 African countries this month to adopt a set of principles as the basis for this convention. Finally, we are opening new lines of communication with high-level African counterparts. The Administration will host the first-ever U.S.-Africa ministerial meeting this spring in Washington to discuss a range of important issues key to integrating African nations into the global economic fold. Conclusion Mr. Chairman, I began my testimony by alluding to the last time the United States Congress had the opportunity to change Africa's course in history. In 1986, also emboldened by African and American widespread support, Congress passed the Comprehensive Anti-Apartheid Act voicing our country's strong opposition to South Africa's repressive regime. When I was informed that I would be testifying before your Subcommittee today, on February 11, I could not help marveling at the significance--for it was on today's date, exactly nine years ago, that Nelson Mandela was released after 27 years of captivity. Americans and their elected officials can be proud of the part they played in that event and in improving the lives of so many Africans. Today, Congress again has the opportunity to make a difference by sending this important signal of our commitment to Africa's future prosperity. I urge the House of Representatives to consider the African Growth and Opportunity Act as the only reasonable and achievable legislation available to put U.S.-Africa relations on a new, equal footing with developing emerging markets worldwide. This is in Africa's and America's best interest. [end of document]
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