FOR IMMEDIATE RELEASE: June 28, 2012
CONTACT: Ian Koski at 202-224-4216 or Ian_Koski@coons.senate.gov
“Economic Statecraft: Embracing Africa’s Market Potential”
Senate Foreign Relations Subcommittee on African Affairs
June 28, 2012
Slides that accompanied this statement can be found here:
http://coons.senate.gov/download/june-28-sfrc-hearing-slides
– As Prepared –
I am pleased to convene today’s hearing of the African Affairs Subcommittee entitled “Economic Statecraft: Embracing Africa’s Market Potential.” I would like to welcome my friend and partner on the Subcommittee, Senator Isakson, and thank our distinguished witnesses for sharing their insight and expertise. Today, we will hear from Assistant Secretary of State for African Affairs, Johnnie Carson; USAID Assistant Administrator for Africa, Earl Gast; and Assistant U.S. Trade Representative for Africa, Florizelle Liser. We will also convene a second hearing on this topic in July, and I look forward to testimony from the Commerce Department and other government agencies at that time, as well as the private sector.
Today’s hearing will explore Africa’s vast economic potential – both for U.S. businesses and investors, and as a means ofsustainable development – as well as steps the U.S. government could take to increase bilateral investment and trade. Sub-Saharan Africa is a continent of endless opportunity and economic potential. Its population of one billion people is expected to double in the next forty years, at which time it is projected to have the world’s largest workforce. Over the past decade, Africa has been home to six of the ten fastest growing economies in the world, which is projected to soon reach seven.
According to the IMF, the region is on track to grow by six percent this year, which is roughly the same as Asia, and the World Bank has noted that Africa “could be on the brink of an economic take-off, much like China was 30 years ago, and India 20 years ago.” Trade between Africa and the rest of the world has tripled in the last ten years, with an increase in exports of more than 200 percent and an increase in imports of 250 percent from 2001 to 2011.
Increased trade between the United States and Africa is mutually beneficial. It fosters economic growth in Africa and creates jobs here at home. That is why Senators Durbin, Isakson, Boozman, and I have introduced S.2215, the Increasing American Jobs Through Greater Exports to Africa Act, which requires theadministration to develop a strategy for increasing U.S. exports to Africa by 200 percent in the next ten years. There is more that could be done to fully capitalize on Africa’s vast economic potential and compete more aggressively with countries such as China, whichsurpassed the United States as Africa’s largest trading partner in 2009.
Today, the U.S. foreign assistance budget for Africa focuses on responding to pressing health, food security, and humanitarian crises. As we look toward the future, it is imperative to better align our investments with the reality of modern-day Africa, focusing more on economic statecraft and transitioning from “aid to trade.” When it comes to the private sector, Africa is the destination for a mere 1% of U.S. foreigndirect investment, and more than half of U.S. FDI in Africa is concentrated in extractive industries. This lack of diversification is clear in our trade relationships as well, with 82% of U.S. imports from Africa concentrated in oil Diversification in our trade and investment relationships is important as we consider the reauthorization of the African Growth and Opportunity Act (AGOA), hopefully well in advance of its expiration in 2015.
Another critically important aspect of AGOA is the Third Country Fabric Provision, which is set to expire at the end ofSeptember. This provision, which maintains AGOA eligibility for apparel regardless of the fabric’s country of origin, has been incredibly successful. It has helped American companies reduce costs and diversify supply chains, and has created tens of thousands of jobs – the majority of which for women – in countries such as Lesotho, Swaziland, Kenya and Mauritius. Given the lead-time required for apparel orders, our delay in reauthorizing this provision has reduced new apparel orders by 30-35% compared to the same period last year. Senator Isakson and I have been working with our colleagues in the Senate and the House to ensure this passes as soon aspossible, and we will not rest until the Third Country Fabric Provision is renewed.
I recently had the opportunity to travel to East Africa, where I experienced the impact of AGOA first-hand. In Kenya, I visited a locally owned companycalled, which makes footwear from recycled materials in Mathare, one of thepoorest parts of Nairobi. Ecosandals and companies like it are able to export their products to customers in the United States because of the opportunities AGOA provides, and I hope we will expand such efforts in the future.
At the same time, we must also work in partnership with African countries to expand U.S. exports to Africa. In order to do so, we must continue to urge African countries to strengthen governing institutions and lift barriers totrade, such as poor infrastructure and transportation, as well as bans on products, such as poultry from my home state of Delaware. Lifting tariff and non-tariff barriers will not only benefit Africa’s global trading partners, but it will also increase intra-regional trade, which accounts for only 11 percent of total trade on the continent and must be improved.
In conclusion, I welcome the Administration’s recently released U.S. Strategy Toward Sub-Saharan Africa because it defines as a key goal of U.S. policy the acceleration of economic growth, including through trade and investment. In order to do so, it outlines additional goals, including promoting an enabling environment for trade and investment; improving economic governance; promoting regional integration; expanding African capacity to access global markets; and encouraging U.S. companies to trade with and invest in Africa.
As we look beyond words toward implementation of this strategy, I look forward to hearing from our witnesses about how these goals will be accomplished. Specifically, how coordination will be improved among the ten key U.S. government agencies involved in trade matters, in order to become more effective in promoting our stated goals. I also hope our strategy aims to eliminate policy inconsistencies, such as plans by the Department of Commerce to reduce Foreign Commercial ServiceOfficers on the continent – including in Ghana – just as it is poised for significant economic growth.
I want to thank our witnesses for appearing before us today, and turn to Senator Isakson for his opening statement.
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Ian Koski | Communications Director
U.S. Senator Chris Coons (DE) | 202-224-4216