TRADE-US: Clinton Boosts Africa Trade Bill

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, Jun 17 1998 (IPS) - President Bill Clinton gave a big boost Wednesday to a bill to promote U.S. trade and investment in Africa received and the administration rolled out its big guns to urge for quick approval in the Senate.

At a crowded Senate hearing, Secretary of State Madeleine Albright, Commerce Secretary William Daley, and Deputy Treasury chief Lawrence Summers all testified in strong support of the ‘Africa Growth and Opportunity Act’ which Clinton himself touted during his 12-day visit of the continent last March.

“I think this showed the administration’s commitment,” said Michael Williams, a Congressional aide who helped write the bill and guide it through the legislative labyrinth. “There’s still a lot of work ahead, but people here clearly want to do something.” He assessed the chances of final passage this year at “better than even.”

Eight senators, as well as at least two dozen senior diplomats from African embassies here, also appeared at the hearing to show their support for the initiative. Elements of the bill are opposed by some unions and the textile industry and a number of non- governmental organisations (NGOs) concerned that beneficiaries would be forced to adopt “inappropriate” economic policies.

“The African Growth and Opportunity Act is the first serious attempt to develop a new American strategy in Africa,” said Sen. Richard Lugar, the Act’s main Senate sponsor. “(It) emerged from the realisation that the neglect of Africa is not in the short- term or long-term interests of the United States.”

The bill, which passed the House of Representatives by a comfortable 50-vote margin in March, is designed to boost U.S. commercial interests in Africa, a region long dominated by the its former colonial powers.

Economic ties between the United States and the 48 countries of sub-Saharan Africa are minimal. In 1996, for example, U.S. exports to the region came to only 6.1 billion dollars, or about one percent of total exports. U.S. imports from Africa, mostly oil, amounted to 15.2 billion dollars, or about two percent of all US imports. At the same time, US investment in Africa – mostly in South Africa and Nigeria – remains less than one percent of all its investment overseas.

Among other provisions, the bill would substantially increase the number of African-made goods that could enter the U.S. market duty-free. It also authorises the Overseas Private Investment Corporation (OPIC) to provide some 650 million dollars in investment guarantees and credits for US companies in Africa, notably those interested in infrastructure projects.

The bill also calls for the president to develop a free-trade an for eligible African countries and authorises regular meetings of U.S. cabinet secretaries and their African counterparts to spur trade investment. The first of these is tentatively scheduled to take place in Washington next December.

The administration also is trying to maintain a high level of public attention on Africa, particularly in the aftermath of Clinton’s trip, the first extended visit to the region by a sitting U.S. president. Treasury Secretary Robert Rubin is scheduled to travel there next month for meetings with his counterparts. Daley said Wednesday he will take 30 US executives to South Africa, Kenya, Cote d’Ivoire and one or two other countries in September.

“The fact is that American business have not yet aggressively pursued this market,” he said. “We rank behind France and the United Kingdom, with only a seven-percent share of the African market, a fraction of what, in my opinion, it could be and should be.”

To benefit from the bill, African countries must gain a presidential certification that they are not engaged in “gross violations” of human rights and are making “continual progress toward establishing a market-based economy.”

The latter provision is supposed to be measured, among other factors, by compliance with structural adjustment programmes, liberalisation of trade and investment regimes, and protection of foreign investment and intellectual property rights.

NGOs here and in Africa have objected to such criteria, alleging that they favour the interests of multinational companies and foreign investors at the expense of the vast number of poor Africans.

South African President Nelson Mandela denounced some criteria as “unacceptable” during a press conference held with Clinton in Cape Town but administration officials made it clear later that the president would be flexible in assessing compliance with these criteria and, in Albright’s words, would take “into account the individual circumstances of each country.”

The South African government favoured the bill, even while opposing those provisions which it describes as “conditionalities.” In an April 30 statement released here, Pretoria’s ambassador, Franklin Sonn, officially endorsed the legislation.

Virtually every other African government also supports the bill. In a letter to Sen. Jesse Helms, Djibouti Amb Roble Olhaye, dean of the African diplomatic corps here, called for early passage of the bill and criticised NGOs and African-American leaders opposed to the Act for “stat(ing) what they believe is best for Africa, without any prior interactions with us.”

Aside from the eligibility requirements, the bill’s most contentious provision would permit eligible countries to export textiles and apparel duty- and quota-free to the United States. U.S. textile interests, which oppose the measure, are particularly strong in the Senate.

At least one textile state senator, John Breaux of Louisiana, said he would support duty-free treatment only for apparel cut and assembled in Africa from fabric originally produced in bulk in the United States.

Daley pointed out that textile-assembly operations in Mexico and the Caribbean, where shipping costs to and from the United States are a fraction of what they would be for Africa, already enjoy a such an arrangement. “There is a question as to whether the African countries could be as competitive,” he said.

The administration witnesses also pointed to a recent U.S. International Trade Commission study which found that African textile and apparel exports were unlikely to exceed two percent of the total textile import market, even if duty- and quota-free treatment were granted. Current African textile imports amount to less than one percent of all textile imports.

But privately, officials here say they may have to amend the textile provisions along the lines suggested by Breaux in order to ensure Senate approval. “A deal can be worked out,” said Williams.

TRADE-US: Clinton Boosts Africa Trade Bill

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, Jun 17 1998 (IPS) - President Bill Clinton gave a big boost Wednesday to a bill to promote U.S. trade and investment in Africa received and the administration rolled out its big guns to urge for quick approval in the Senate.
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