Subcommittee on Africa and Global Health
"Beyond Oil and Gas: Africa Growth and Opportunity Act's Benefits to Africa"
July 12, 2007
Statement by Rep. Christopher H. Smith
Thank you Mr. Chairman, for holding this hearing on the African Growth and Opportunity Act. This law provides duty-free and quota-free access to the U.S. market for certain goods from designated countries in Sub-Saharan Africa. It was based on the Congressional finding that it is in the mutual interest of the United States and the countries of sub-Saharan Africa to promote stable and sustainable economic growth and development on the Continent. The criteria for beneficiary countries include evidence of progress toward a market-based economy, rule of law, economic policies to reduce poverty and promote economic growth, a system to combat corruption and bribery, and protection of internationally recognized worker and human rights.
The recent report from the U.S. Trade Representative to Congress contains some impressive information about AGOA's impact. Since it was enacted in 2000, trade between the United States and Sub-Saharan Africa has increased 143 percent, and AGOA has played an important role in this increase. In 2006, over 98 percent of U.S. imports from AGOA-eligible countries entered the United States duty-free. U.S. imports from AGOA countries totaled $44.2 billion in 2006, which was an increase of 16 percent over the previous year.
It is disappointing, however, that most of this increase in 2006 was due to oil, and non-oil trade increased by only 7 percent after having declined a precipitous 16 percent in 2005. Non-oil AGOA trade constituted only $3.2 billion of the total. These latter statistics indicate a need for greater attention to the non-oil potential on the Continent. We will hear testimony today about the need to expand U.S. trade with Sub-Sahara Africa beyond oil, textiles and apparel, and I will be interested in and supportive of ideas that will further this objective.
You will recall, Mr. Chairman, that the Subcommittee on Africa, Global Human Rights and International Operations that I chaired held a hearing on a five-year assessment of the Act in October 2005, which included two witnesses who we will be hearing from again today: Ms. Florizelle Liser and Mr. Steve Hayes. One of the issues that I raised at that hearing was the protection of labor and other human rights in AGOA-eligible countries. Ms. Liser testified at the time that AGOA was having a positive impact on worker and human rights, and she provided examples of reforms that had been undertaken by beneficiary countries which included the prevention of child trafficking and addressed the worst forms of child labor.
It is important that this issue be examined, particularly in light of the 2007 Trafficking in Persons Report that was released by the State Department last month. It contains a "Tier 2 Watch List" of countries that have a serious trafficking problem and that do not fully comply with minimum standards to eliminate trafficking. These countries will be the subject of particular scrutiny by the State Department's Trafficking Office during the coming year to ascertain whether they are making sufficient efforts to bring themselves into compliance with those standards.
It is disturbing that eight countries on the Tier 2 Watch List are AGOA beneficiaries, and that each of these countries are cited in the TIP report for child and/or forced labor concerns. Sexual exploitation, particularly of children, as cited in some of these reports would also be relevant in the AGOA context as gross violations of international human rights standards. In addition to the other human rights assessments that are legislatively mandated as part of the AGOA eligibility process, one would expect the tier placement for trafficking in persons to be a critical consideration. I hope Ms. Liser will address what kind of collaboration takes place between the US Trade Representative and the State Department Trafficking in Persons office on this issue.
While questions may be raised concerning the relation between AGOA and improvement in human rights, it does seem that the Act together with the Millennium Challenge Account is providing an impetus for other advances. The World Bank is reporting that corruption in Africa is declining, stating that even some of the poorest countries have made "significant progress" in improving governance and fighting corruption over the past decade. This trend is certainly attributable to a significant extent to the eligibility requirements for both of these U.S. initiatives.
AGOA and the MCA are also addressing infrastructure and technical capacity that are essential for long-term development, but which are arguably not receiving sufficient emphasis from other assistance sources. As I indicated earlier and in our recent hearing on the MCA, Congress needs to look at ways to improve and strengthen these benefits in both pieces of legislation.
And finally, one should not minimize the good will and positive bi-lateral relationships in Africa that are being reinforced through AGOA and the MCA, together with the President's Emergency Plan for AIDS Relief. This latter consideration, though intangible, is critical if the United States is to maintain and strengthen its presence in this region of the world that is becoming increasingly important for our own national security and global peace and prosperity.
Thank you again, Mr. Chairman, and I yield back.
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