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2004 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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2004 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act 2004 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 FOURTH OF EIGHT ANNUAL REPORTS MAY 2004 2004 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the African Growth and Opportunity Act The Fourth of Eight Annual Reports May 2004 Foreword .........................................................................................................................................iii I. U.S.-African Trade and Investment Highlights ..............................................................1 II. Executive Summary ...........................................................................................................2 III. The African Growth and Opportunity Act (AGOA) .....................................................4 A. AGOA Summary, Eligibility, and Implementation ................................................4 B. Proposed AGOA Enhancement Legislation............................................................9 C. Outreach...................................................................................................................9 IV. Economic and Trade Overview......................................................................................12 A. Economic Growth .................................................................................................12 B. Africa’s Global Trade ...........................................................................................13 C. Trade with the United States..................................................................................14 D. Investment and Debt ..............................................................................................15 E. Economic Reforms ...............................................................................................18 F. Regional Economic Integration.............................................................................19 G. Africa and the WTO...............................................................................................23 V. Trade Capacity Building .................................................................................................26 A. Overview................................................................................................................26 B. USTR Activities.....................................................................................................27 C. USAID Activities...................................................................................................28 D. U.S. Department of Commerce Programs .............................................................33 E. U.S. Department of Agriculture.............................................................................34 F. U.S. Trade and Development Agency...................................................................35 VI. Technical Assistance and Other Trade-Related Initiatives .........................................37 A. Millennium Challenge Account.............................................................................37 B. USAID Technical Assistance.................................................................................37 C. Sustainable Development, the Environment, and Labor .......................................40 D. Transportation and Communication Infrastructure Development .........................42 E. Energy Infrastructure Development.......................................................................46 F. HIV/AIDS, Tuberculosis, and Malaria ..................................................................48 G. Small Business Development ................................................................................50 H. Overseas Private Investment Corporation ............................................................50 I. Export-Import Bank Initiatives ..............................................................................52 J. U.S. Department of Commerce Initiatives ............................................................53 K. U.S. Bureau of Customs and Border Protection....................................................54 L. U.S. Trade and Development Agency ..................................................................55 M. African Development Foundation.........................................................................56 VII. U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum ........................59 VIII. Free Trade Agreement with the Southern African Customs Union...........................61 IX. AGOA Country Reports .................................................................................................62 X. Other Resources for Information on U.S. Trade and Investment Policy Toward Africa and AGOA Implementation ...........................................................................121 Annexes A. AGOA Beneficiary Countries ..................................................................................123 B. AGOA Eligibility Criteria ........................................................................................124 C. List of Frequently Used Acronyms............................................................................127 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 fourth 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 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 continues to bolster U.S.-sub-Saharan trade and investment relations. Total trade between the United States and sub-Saharan Africa was just under $33 billion in 2003, with U.S. exports of almost $7 billion and U.S. imports of $25.6 billion. U.S. imports under AGOA were valued at just over $14 billion in 2003, a 55 percent increase from 2002. The U.S. direct investment position in sub-Saharan Africa increased 12 percent at year-end 2002, to $8.9 billion. • At the third U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum, the President reiterated his commitment to work with the Congress to extend AGOA past 2008. In November 2003 and April 2004, legislation was introduced in the Senate and House of Representatives that would extend AGOA’s authorization and its special third-country fabric provision, enhance AGOA-related technical assistance, and amend some technical provisions of the Act. Hearings were held on the proposed legislation in spring 2004. • Negotiations began in June 2003 on a free trade agreement (FTA) between the United States and the five members of the Southern African Customs Union (SACU) – Botswana, Lesotho, Namibia, South Africa, and Swaziland. The target completion date for the FTA is December 2004. • Thirty-seven of the 48 sub-Saharan African countries are now eligible for AGOA. On December 31, 2003, Angola was added to the list of eligible countries, and two countries – the Central African Republic and Eritrea – were removed from the list for failing to meet the eligibility criteria. • As of April 2004, 24 countries were eligible to receive AGOA’s apparel benefits. Eight countries have qualified for AGOA’s special handloomed and handmade provisions. • The third annual U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum (“the AGOA Forum”) was held in Washington in December 2003. Senior officials from over 30 AGOA-eligible countries participated. President Bush met with the African ministers and told them of his continuing commitment to AGOA and to strong U.S.-African trade and economic relations. Senior Administration officials and several Members of Congress also participated in the Forum. • The United States devoted $133 million to trade capacity building activities in sub- Saharan Africa in FY2003, up 26 percent from FY2002. More than a dozen U.S. agencies implement these activities, including
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