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2005 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act

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2005 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act ŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜ 2005 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act Prepared by the Office of the United States Trade Representative THE FIFTH OF EIGHT ANNUAL REPORTS MAY 2005 ŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜŝŜ 2005 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act The Fifth of Eight Annual Reports May 2005 Foreword........................................................................................................................................ iii I. U.S.-African Trade and Investment Highlights ..............................................................1 II. Executive Summary...........................................................................................................3 III. The African Growth and Opportunity Act (AGOA) .....................................................6 A. AGOA Summary, Eligibility, and Implementation ................................................6 B. AGOA III...............................................................................................................10 C. Outreach.................................................................................................................11 IV. Economic and Trade Overview ......................................................................................16 A. Economic Growth .................................................................................................16 B. Africa’s Global Trade ...........................................................................................16 C. Trade with the United States..................................................................................17 D. Investment and Debt ..............................................................................................19 E. Economic Reforms ...............................................................................................21 F. Regional Economic Integration .............................................................................22 G. Africa and the WTO...............................................................................................25 V. Trade Capacity Building .................................................................................................27 A. Overview................................................................................................................27 B. USTR Activities.....................................................................................................29 C. USAID Activities...................................................................................................30 D. U.S. Department of Commerce Programs .............................................................37 E. U.S. Department of Agriculture.............................................................................38 F. U.S. Trade and Development Agency ...................................................................40 G. Small Business Administration .............................................................................41 H. African Development Foundation..........................................................................42 I. Other TCB Activities .............................................................................................44 VI. Other Assistance in Support of AGOA Objectives.......................................................45 A. Millennium Challenge Account.............................................................................45 B. USAID Programs...................................................................................................46 C. Sustainable Development, the Environment, and Labor .......................................48 D. Transportation and Communication Infrastructure Development .........................51 E. Energy Infrastructure Development.......................................................................55 F. HIV/AIDS..............................................................................................................57 G. Overseas Private Investment Corporation ............................................................58 H. Export-Import Bank Initiatives..............................................................................60 I. U.S. Department of Commerce Initiatives ............................................................61 J. U.S. Bureau of Customs and Border Protection ...................................................62 VII. U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum…….…………64 VIII. Free Trade Agreement with the Southern African Customs Union ...........................65 IX. AGOA Country Reports..................................................................................................67 X. Other Resources for Information on U.S. Trade and Investment Policy Toward Africa and AGOA Implementation .............................................................122 Annexes A. AGOA Beneficiary Countries ...................................................................................124 B. AGOA Eligibility Criteria .........................................................................................125 C. List of Frequently Used Acronyms ............................................................................128 ii Foreword Section 106 of the African Growth and Opportunity Act (AGOA), Title I of the Trade and Development Act of 2000, states that the President shall submit a report to Congress annually through 2008 on trade and investment policy toward Africa and on implementation of AGOA. The Act also states that the President shall submit a report to Congress on potential free trade agreements with sub-Saharan African countries. These reports under AGOA continue a series of annual Presidential reports to Congress on U.S. trade and investment policy toward Africa under the Uruguay Round Agreements Act of 1994. This is the fifth of eight annual reports under AGOA. The current report builds on the information provided in previous reports, providing new and updated information on U.S. trade and investment policy toward sub-Saharan Africa, including the implementation of AGOA, the designation of AGOA beneficiary countries, the impact that AGOA has had on U.S. trade and investment with sub-Saharan Africa, and information on reforms being undertaken by AGOA beneficiary countries. It was prepared by the Office of the United States Trade Representative with input from numerous federal agencies and offices including the National Security Council, the Departments of Agriculture, Commerce, Energy, Health and Human Services, Labor, State, Transportation, and Treasury, as well as the African Development Foundation, the Council of Economic Advisors, the Environmental Protection Agency, the Millennium Challenge Corporation, the Overseas Private Investment Corporation, the Small Business Administration, the U.S. Agency for International Development, the U.S. Bureau of Customs and Border Protection, the U.S. Export-Import Bank, the U.S. International Trade Commission, and the U.S. Trade and Development Agency. iii I. U.S.-African Trade and Investment Highlights • AGOA has been a measurable success, increasing our two-way trade with sub- Saharan Africa and diversifying the range of products being traded. In 2004, U.S. exports to sub-Saharan Africa increased 25 percent from 2003, to $8.6 billion. AGOA imports (including GSP) were $26.6 billion in 2004, an increase of 88 percent over 2003. Non-oil AGOA imports totaled $3.5 billion, an increase of 22 percent from 2003. • In July 2004, President Bush signed into law the AGOA Acceleration Act of 2004. This legislation extends AGOA’s authorization until 2015, including its special third-country fabric provision until 2007, mandates increased AGOA- related technical assistance, and amends some technical provisions of the Act. • The United States devoted $181 million to trade capacity building activities in sub-Saharan Africa in FY04, up 36 percent from FY03. With funding from USAID, in 2004, agricultural standard experts from the U.S. Animal Plant and Health Inspection Service (APHIS) were placed at each of the three regional TRADE Hubs to help eligible African countries to meet U.S. standards and increase their agriculture exports under AGOA. • The Administration has commissioned a major study to identify potentially competitive export sectors in each of the 37 AGOA-eligible countries, barriers that are impeding growth in these sectors, and to make recommendations to reduce or eliminate these barriers. The study will further contribute to U.S. government efforts to maximize AGOA benefits across a wider range of countries and products. The study will be completed in July 2005. • Thirty-seven of the 48 sub-Saharan African countries are eligible for AGOA. In December 2004, Burkina Faso was added to the list of eligible countries, and Côte d’Ivoire was removed from the list. Three countries – Benin, Nigeria, and Sierra Leone – became eligible for AGOA’s apparel benefits in 2004. As of April 2005, 24 sub-Saharan African countries are eligible to receive AGOA’s apparel benefits. Ten of these countries also qualify for AGOA’s provisions for handloomed and handmade articles. • The elimination of global textile and apparel quotas at the end of 2004 presents special challenges to African textile and apparel exporters. To continue to retain and grow
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