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21–110 2016

ADVANCING THE U.S. TRADE AGENDA: 

TRADE WITH AFRICA AND THE AFRICAN 

GROWTH AND OPPORTUNITY ACT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON TRADE 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JULY 29, 2014

Serial 113–TR07 

Printed for the use of the Committee on Ways and Means 

( 


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COMMITTEE ON WAYS AND MEANS 

DAVE CAMP, Michigan, Chairman 

SAM JOHNSON, Texas 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

JIM RENACCI, Ohio 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

ALLYSON SCHWARTZ, Pennsylvania 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

JENNIFER M. SAFAVIAN, Staff Director and General Counsel 

JANICE MAYS, Minority Chief Counsel 

SUBCOMMITTEE ON TRADE 

DEVIN NUNES, California, Chairman 

KEVIN BRADY, Texas 

DAVID G. REICHERT, Washington 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

CHARLES B. RANGEL, New York 

RICHARD E. NEAL, Massachusetts 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 


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C O N T E N T S 

Page 

Advisory of July 29, 2014 announcing the hearing ............................................... 2 

WITNESSES 

Ben Leo, Senior Fellow, Director of Rethinking U.S. Development Policy, 

Center For Global Development ......................................................................... 6 

William C. McRaith, Chief Supply Chain Officer, PVH Corp. ............................. 18 

Witney Schneidman, Senior International Advisor, Covington & Burling LL; 

Nonresident Fellow, Africa Growth Initiative, Brooking .................................. 27 

SUBMISSIONS FOR THE RECORD 

Africa Coalition for Trade, statement .................................................................... 46 

African Cotton & Textiles Industries Federation, statement .............................. 52 

American Sugar Alliance, statement ..................................................................... 58 

Brown Shoe 072914TR, letter ................................................................................. 69 

Footwear Distributors and Retailers of America, letter ....................................... 71 

National Pork Producers Council, statement ........................................................ 73 

U.S. Chamber, statement ........................................................................................ 77 

CBI Sugar Group, statement .................................................................................. 86 


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ADVANCING THE U.S. TRADE AGENDA: TRADE 

WITH AFRICA AND THE AFRICAN GROWTH 

AND OPPORTUNITY ACT 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON TRADE, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:04 p.m. in 1100 

Longworth House Office Building, the Honorable Devin Nunes, 

[Chairman of the Subcommittee] presiding. 

[The advisory announcing the hearing follows:] 


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Chairman NUNES. I would like to call the Committee to order. 

Good afternoon. Welcome to today’s hearing on advancing our trade 

agenda and trade with Africa. Before hearing form our witnesses, 

I would like to make three points. 

First, we are committed to a seamless, bipartisan renewal of 

AGOA well before its expiration in fifteen months. Congressman 

Rangel and I worked closely in developing this hearing—having 

jointly selected all the witnesses—and we are cooperating to develop a plan for AGOA’s renewal. To improve the program, we are 

studying possible changes with an eye toward strengthening utilization and effectiveness. We are listening to stakeholders on issues 

like capacity building, product coverage and rules of origin, eligibility criteria, and graduation among others, so that we can determine what changes, if any, are appropriate. To assist in our review 

we have requested an extensive study from GAO. In addition, as 

part of this hearing, we are requesting and encouraging additional 

analysis and suggestions from the public. 

Second, to make AGOA more effective, we must help Africa address both political and supply side barriers to trade. To encourage 

greater regional and global integration, Africa must remove domestic barriers to trade and investment, including high tariffs, forced 

localization requirements, legal restrictions on investment, and customs barriers, among others. 


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Supply-side constraints such as poor infrastructure, lack of regional integration, and other obstacles impede AGOA utilization. 

We are working with Chairman Royce and the Foreign Affairs 

Committee to develop approaches to assist African countries in 

maximizing AGOA utilization. For example, earlier this year the 

House passed the Electrify Africa Act with strong bipartisan support. I call on the Senate to act quickly on this important legislation. 

Implementing the recently concluded Trade Facilitation Agreement would also help Africa address supply side constraints and 

encourage greater investment from private sector and development 

banks. I am frustrated that India is blocking adoption of the deal 

it agreed to last December, harming developed and developing 

countries alike and threatening the WTO’s viability. 

Third, as we renew AGOA, we should look at ways to deepen and 

expand our trade relationship with AGOA countries. We should expand our TIFA and BIT programs, and seek BITs with regional 

groupings. As countries become ready, we should begin negotiating 

FTAs for the most robust trade relationship. At the same time, I 

am concerned by the EU’s efforts to withdraw unilateral preferences and force African countries to sign bilateral agreements. 

This approach disadvantages U.S. companies seeking to do business in Africa and raises serious policy and development concerns. 

Finally, the bipartisan TPA bill that I co-sponsored earlier this 

year with Chairman Camp includes strengthened provisions on capacity building and development. I call on the Administration to 

work with Congress to pass this important legislation. 

Chairman NUNES. I will now yield to Ranking Member Rangel 

for the purpose of an opening statement. 

Mr. RANGEL. Thank you, Mr. Chairman. It is so refreshing to 

listen to a Chairman of the majority to give a statement that I 

don’t have to rebut or contest, or to display political eloquence in 

terms of why I have a different idea. You have really worked hard, 

not only on this bill, but what’s in the best interest of our great 

country and how we can help these struggling countries that for so 

long have been neglected. 

And I cannot think of a better time to do this as the President 

of the United States has invited 50 heads of the African countries 

to come, not only to discuss the African growth and opportunity 

bill, which we have these experts here to share with us, which is 

the best direction, but also to be able to look at the broad question 

of what contribution we and other nations can make to be of assistance to the spectacular growth of the economy of these African 

countries. And, as you said, the reports indicate there are some 

things, a lot of things that we can do better, and working together 

we would. 

In addition to having the heads of states, there are 500 young 

people from Africa that have been coming to the United States in 

order to learn more about our system, both in the private and public sector. And I can’t think of a better way than—to improve our 

relationships with the countries except through their young people. 

I am seeing that you have given permission for Congresswoman 

Karen Bass to share with us, and I want to thank you for this courtesy, because no member of this Congress has displayed more in 


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terms of more hard work, which is the most important thing, but 

interest in seeing what the United States and what the Congress, 

and more specifically our Committee with the Foreign Affairs Committee, in working together under your leadership can do. 

And so I want to thank you for your commitment, and also thank 

the witnesses for helping us and directing us to see what we can 

do better. I truly believe, without exaggeration, that this is a historic time in our international trade policies. The countries of Africa, the last to get on board, and with our help I am certain they 

can catch up. 

Thank you so much, Chairman Nunes. 

Chairman NUNES. I want to thank you, Mr. Rangel. There is no 

one committed more to getting AGOA passed than yourself from 

the time of our first meeting when I became chair of this committee. This was your priority and we worked together on this. And 

there is nothing better than having three witnesses here that we 

all agree upon. I want to welcome all three of you. 

The first witness is Ben Leo, Senior Fellow at the Center for 

Global Development. Our second witness is William McRaith, Chief 

Supply Chain Officer for PVH Corporation. Our third witness is 

Witney Schneidman, Senior International Advisor for Africa at 

Covington & Burling, and a non-resident fellow for the African 

Growth Initiative at the Brookings Institution. 

Before we recognize our witnesses, our time is limited this afternoon. You should limit your testimony to five minutes and Members should keep their questioning to five minutes. 

Mr. Leo, your written statement will be made part of the record, 

and you are now recognized for five minutes. 

STATEMENT OF BEN LEO, SENIOR FELLOW, DIRECTOR OF 

RETHINKING U.S. DEVELOPMENT POLICY, CENTER FOR 

GLOBAL DEVELOPMENT 

Mr. LEO. Thank you, Chairman Nunes, Ranking Member Rangel 

and other Members of the Subcommittee. 

I appreciate the opportunity to discuss ways to advance the U.S.- 

Africa Trade and Investment Agenda. This hearing and the broader 

examination of the African Growth and Opportunities Act, along 

with other U.S. policy tools, is extremely well-timed. When African 

leaders and business people come to Washington next week, we all 

expect them to deliver a very united message that their most pressing objectives are seeking ways to generate more trade and investment with the United States. 

My remarks today will focus on four interrelated points. First, 

the global competitiveness of African firms is primarily constrained 

by business climate issues, small market size and collusive political 

economic dynamics. Business surveys paint a very clear and very 

stark picture. The biggest constraints are unreliable and costly 

electricity, high transport costs and export processing times and access to capital. Addressing these kinds of factors, even if only on 

the margins, will have a greater impact on U.S. trade and investment than further expanding AGOA’s market access provisions. 

The key question is determining where and how the U.S. can best 

incentivize and support reforms by committed African governments. 


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Second, despite clear criteria, AGOA country eligibility decisions 

have not reflected whether African governments are establishing 

market-based economies and favorable business climates. AGOA 

was originally designed as a compact with African governments, 

founded upon a commitment to sound economic policies, democratic 

pluralism and respect for human and labor rights. While Congress 

created these eligibility criteria equally, successive administrations 

have implemented them in highly unequal ways. 

In practice AGOA eligibility has been used to promote democratic 

freedoms, which is a good thing, while economic freedoms have 

been basically ignored in the eligibility determination process. 

Going forward, Congress should consider conditioning preferential 

access to the $17 trillion U.S. economy upon business climate reforms. 

Third, with a few very important exceptions, U.S. trade capacity 

building programs lack an overarching strategy and have been 

fragmented and under-resourced. What we often find are a multitude of very small U.S. Government agencies providing sporadic 

and largely insignificant assistance. Moreover, U.S. assistance for 

regional economic communities has been modest, despite their outsized role in facilitating regional integration and helping to address 

the problem of small market size. On the positive side, the Millennium Challenge Corporation and more U.S. initiatives like Power 

Africa and the little-known Trade Africa Initiative are focusing on 

the right issue sand doing a good job. The key is ensuring that they 

have scale and staying power. Going forward, Congress and the 

Obama Administration should bring greater focus and coordination 

and scale to trade capacity building programs in Africa. 

Lastly, the U.S. Government should actively pursue legally binding, bilateral investment treaties as an additional way of promoting 

economic freedoms and greater trade and investment flows. These 

treaties can encourage investment by providing investors with protections against things like expropriation or discriminatory treatment; however, the U.S. has only ratified six treaties with sub-Saharan African countries over time, which covers a mere seven percent of regional GDP. And, to-date, the Obama Administration has 

not successfully negotiated a single, legally binding investment 

agreement. 

Countries like China and Canada have demonstrated that African governments are ready to sign these agreements, including 

major economies like Nigeria. While our peers and our competitors 

have been busy inking investment agreements, USTR has been 

pursuing ineffectual, non-legally binding trade and investment 

framework agreements. It is time that we focus and stop allocating 

very scarce government capacity and resources to these inconsequential talk shops and start pursuing real agreements that 

catalyze much-needed investment flows to the Continent. 

Thank you very much. 

[The prepared statement of Mr. Leo follows:] 


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Chairman NUNES. Thank you, Mr. Leo. 

Mr. McRaith, you are now recognized for five minutes. 

STATEMENT OF WILLIAM C. MCRAITH, CHIEF SUPPLY CHAIN 

OFFICER, PVH CORP. 

Mr. MCRAITH. Thank you, Chairman Nunes, Ranking Member 

Rangel and distinguished Members of the House Ways & Means 

Trade Subcommittee. 

On behalf of PVH I want to thank you for allowing me the opportunity to testify in front of this Committee. I have already submitted my written copy for you to read. I am going to talk from 

these points and try to remain focused on them. 

So my name is William McRaith, Chief Supply Chain Officer for 

PVH. I also sit on the board of the American Apparel and Footwear 

Association. And color on PVH—PVH is one of the largest apparel 

companies in the world. We are headquartered in New York with 

distribution sales in other corporate locations in multiple states 

across the U.S., including Georgia, North Carolina, New Jersey, 

New York, Nevada, Pennsylvania and Tennessee. Among others, 

our company brands include Calvin Klein, Tommy Hilfiger, Van 

Heusen, Arrow, Warner, Izod and Speedo, and we are directly responsible for 16,000 jobs within the U.S. 

PVH is a dedicated, global corporate citizen. Outside of the U.S., 

we have 3,000 retail locations and provide more than 14,000 additional jobs. My message today is quite simple. Many parts of Africa 

are ready. They are primed to receive large investments that will 

generate economic growth envisaged by the AGOA founders. To get 

there, though, AGOA must be renewed as soon as possible, and for 

an extended period of time, including its third country fabric provision. With the right approach, Africa can become a vertically-integrated sourcing region for the apparel industry and generate thousands, tens of thousands of jobs and added value to their economies. 

AGOA was the right trade policy 15 years ago, but it was ahead 

of its time for business community and for Africa to be able to fully 

utilize it. However, we are now seeing more mature and democratic 

countries, better and lasting infrastructure and more meaningful, 

economic and educational reforms starting to take root. Congress 

must send an unequivocal signal to the investor and business community by promptly approving a lengthy extension of AGOA. 

Just a very quick story of our own: In April of this year, PVH 

together with several of the largest apparel companies, textile manufacturers and stores conducted an exploratory business mission to 

this region. I would say many of those companies that went with 

us were skeptics. They were cynics. They really did not believe it 

was ready for this type of investment. 

After visiting sites, looking at infrastructure, and meeting with 

ministries from different countries, our business delegation came to 

the realization that some African countries had already laid the 

foundations necessary to attract significant foreign investment and 

were prepared to undertake the commitments necessary to secure 

socially responsible investors. What we saw in Africa reminded us 

all of some of the current production powerhouses we are in today 

and what they looked like 20 years ago. There is great excitement 


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among the apparel business community about this very near 

growth opportunity in Africa. 

African nations are on much more of a course than just to become pure seamstresses. They can become the world’s very first example of how to proactively build a fully vertical, socially compliant, human rights compliant, ground to finished product supply 

chain. Africa can invest, attract the investment in other added 

value processes, such as cotton growing, yarn spinning, weaving 

and logistics. Countries in Africa will also be the beneficiaries of a 

more inclusive model of investment and growth in which socially 

responsible companies like PVH will be able to put in place right 

from the very beginning facilities, norms and values that will guide 

the work at the factories and the relationships between workers, 

managers, associations, civil society groups, governments, and any 

other stakeholders. 

I see my time is a little bit short. I only have three more points 

to make. So if I can just quickly move through them, the U.S. can 

help us in many ways. 

One of those: programs that will help increase the quality and 

yield of African cotton, vocational and educational programs to help 

train workers and management, projects that help build interregional connectivity for goods to transit the Continent seamlessly 

will enhance the attractiveness of the region. 

Aside from a lengthy AGOA extension, one way to the additional 

certainty for the business community is by extending the Third 

Country Fabric Provision for a reasonable period of time and allow 

the growth of the investments that will make this Third Country 

Provision no longer necessary. As someone who has been involved 

in global operations for over three decades and recently had to ponder the question of where is the next growth region for the next 

20 to 30 years, I believe that we now have the answer. It is Africa. 

We must not lose a moment in this tremendous opportunity for 

Americans and for Africans alike. To make it happen, AGOA must 

be renewed soon and for a lengthy period of time. In addition, Congress and the Administration must continue to work hand in hand 

to improve and facilitate the creation of programs that will 

strengthen the Africa region. We look forward to working with the 

Members of this Committee, other Members of Congress, and with 

the Administration in this worthwhile goal. 

Thank you, Mr. Chairman. Apologies for the time. 

[The prepared statement of Mr. McRaith follows:] 


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Chairman NUNES. Thank you, Mr. McRaith. 

Mr. Schneidman, you are now recognized for five minutes. 

STATEMENT OF WITNEY SCHNEIDMAN, SENIOR INTERNATIONAL ADVISOR, COVINGTON & BURLING LL; NONRESIDENT FELLOW, AFRICA GROWTH INITIATIVE, BROOKING 

Mr. SCHNEIDMAN. Chairman Nunes, Ranking Member Rangel 

and distinguished Members of the Committee, it is an honor to testify before you today. 

On the eve of the African Leaders Summit, the moment could not 

be more timely to be considering the renewal and strengthening of 

the African Growth and Opportunity Act. I will briefly discuss several critical issues related to AGOA, but first it is important to note 

that AGOA is the cornerstone of the U.S.-African commercial relationship, and it provides the U.S. with a strategic advantage on the 

continent. 

Over the course of the last 14 years, AGOA has led directly and 

indirectly to the creation of several million jobs. For a continent of 

one billion people, where the median age is 17, this is a significant 

contribution to economic growth, social stability and the emergence 

of a middle class with a strong appetite for American products and 

brands. There is also a strong affinity with the way in which American companies do business in Africa in terms of skills development, technology transfer, career enhancement and respect for rule 

of law and anti-corruption practices. It is in our strategic interest, 

therefore, that a renewed AGOA contributes to a deeper U.S. commercial engagement in Africa, while also encouraging more experts 

from beneficiary countries. As for the most critical issues, let me 

start with the timeframe. 

Most Americans have what might be referred to as a pre-dial-up 

perception of Africa. In other words, their views of Africa continue 

to be informed by the Cold War, before the Internet when coups, 

conflict and corruption were rife. There is little appreciation for the 

rapid growth, the significant improvement in governance and the 

emergence of a middle class on par with that of India and China. 

In order to change how American companies view Africa, there can 

be no higher priority than creating a framework of stability and 

predictability for entering the African market. The same is equally 

true for African and other companies navigating the complexities 

of exporting to the U.S. market under AGOA. All of them need assurances of a stable and sustainable set of commercial rules. 

For that reason, I support the African Union in its call for a 15- 

year extension of AGOA from 2015 to 2013 (sic). Now, many American companies, especially small and medium companies, need support to be successful in Africa. African companies generally need 

assistance to fund buyers in the U.S. and comply with U.S. regulations. The architects of AGOA anticipated some of these problems 

and created three trade hubs, not only to help African companies 

enter the U.S., but also to facilitate American companies. 

The architects of AGOA anticipated some of these problems and 

created three trade hubs to help African companies utilize AGOA. 

The time has come, however, to redefine the role of the trade hubs. 

They need to be restructured into trade and investment hubs, so 

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tate American companies to capture market share on the African 

continent. To do this, the newly-fashioned trade and investment 

hubs should become one-stop shops where the trade promotion activities of our embassies, officials from the Departments of Commerce and Agriculture, ExIm and OPIC, are closely aligned on a 

daily basis in support of enhancing the U.S. commercial presence 

on the continent. For this to happen, the Administration would 

have to commit to a ‘‘whole of government’’ strategy for trade promotion in Africa, which unfortunately has been lacking. 

Congress would have to play its part and make the funding 

available. This should be pursued with a sense of urgency, given 

the competitiveness of companies from China, India, the EU and 

elsewhere in Africa. Now, it is often said that ‘‘Capital is a coward,’’ 

which explains why Africa accounts for only one percent of U.S. investments world-wide, which is a shockingly low number. As part 

of a reauthorized AGOA, Congress should establish a tax incentive 

to help change the risk-reward ratio for American companies by reducing the tax to zero on repatriated income by U.S. companies 

who make new job-creating investments in supply chain products 

in agriculture, manufacturing, apparel, technology, clean energy 

and other relevant sectors. Congress and the Administration would 

reduce the risk for American companies to invest in Africa. 

I would just like to touch on one or two more points quickly, as 

I see my time is running out. No issue is as central to Africa’s accelerated economic development as regional economic integration. 

The U.S. has largely understood this, but we can do more to facilitate the flow of goods, services and labor across Africa’s borders. 

The principal challenge to regional integration comes from an unlikely source, and it is the Economic Partnership Agreements, 

which the European Union is compelling African governments to 

sign by October 1st, or African governments face losing their preferential access to the European market. 

In fact, the EPAs threaten to undermine much of the progress 

that has been made on regional integration, as they would give European goods and services preferential access in an African country 

over goods and services from a neighboring African country. They 

would also discriminate against American companies and products. 

The EPAs present a significant challenge to the U.S. as the U.S. 

is poised to negotiate regional free trade agreements throughout 

Africa, while we are discussing today the extension of a non-reciprocal trade benefits program with 40 countries on the continent. 

While it is essential that we renew AGOA, we should address this 

issue of this profound asymmetry. 

Last year, the U.S. exported $24 billion worth of goods and services to Africa. This translates into support for more than 130,000 

jobs in the U.S. So our relationship with Africa is changing from 

one of donor/recipient to one of mutual gain and benefit. Under 

AGOA in 2013 the U.S. imported nearly $5 billion worth of nonoil, largely job-creating goods, almost four times the amount in 

2001. In both respects, these trends are encouraging; but, with a 

15-year extension of AGOA, these trends can become much, much 

stronger. 

Thank you for the opportunity and the extra time. 

[The prepared statement of Mr. Schneidman follows:] 


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Chairman NUNES. Thank you, Mr. Schneidman. 

Because of the Ranking Member’s long-time concern about 

AGOA, and he’s really been the champion in Congress, I am going 

to yield my time to the Chairman so he can get into the questions. 

Mr. RANGEL. I can’t thank you enough for your courteous consideration, and I want to thank the witnesses for their contribution. Legislatively, time is not on our side this year, and we have 

a lot of things to consider as to whether or not the 15 years—even 

though it would give investors some degree of continuity, we certainly don’t want to put these countries in a box that we can’t revisit and see what changes have to be made. 

We also know that the Third Country Origin of fabric is the easiest way that a lot of them want to go, but we also know that we 

want to provide incentives so they would not have to go outside of 

these countries. And the Congress, as you all know, we have separated two different committees and subcommittees. And most of the 

testimony appears as though you think our Executive Branch is 

that separated too. And I want to get whatever suggestion you can 

make. 

Here we are, a country trying to maintain peace and economic 

stability in the world and we have an opportunity of people who 

are basically friendly to us. They are in need. They want to trade, 

and whether or not it’s bilateral or whether it’s not this broad, 

which agency do you think would be the best to coordinate these 

activities; so that, whether we are talking about diplomacy, whether we are talking about security, whether we are talking about 

education, whether we are talking about electricity and infrastructure, when a patient is sick, they don’t want to know the specialist. 

They want to know generally ‘‘what are you doing to help me’’. And 

everything that you said, it sounds like all of us would say we wish 

we had thought about it, but our Committee does not have the expertise. We don’t have the experience to know how to go about this, 

even though we are there to provide the tax incentives and the 

structure. 

So, could you—any one of you—suggest to us a sense we cannot 

do it this year? A lot of us will be attending the conference. We will 

have very little input, because it’s an executive conference, even 

though we will have the opportunity to talk with the representatives of these countries. What could we recommend to our Executive Branch as a result of this hearing, which the Chairman called, 

so that we would have the hearing before the summit? We won’t 

be able to tell them we have a treaty to be signed, but we should 

be able to tell them something before they tell us. 

What recommendations, Mr. Leo, since you had four points? Who 

would coordinate, assuming they all made sense like I did, what 

agency, and certainly what would be the USTR? 

Mr. LEO. Thank you, sir, for the comments and the question. I 

agree with you with the point in terms of a need for very close coordination and a strategy to be developed, implemented, monitored 

with a single agency on the hook for accountability. And given the 

breadth of the issues that are very important and influential to all 

the matters that we are talking about, and so the fact that there 

are so many different government agencies that have a small, little 

piece, sometimes a medium-sized piece, I think, given that, it has 


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to be driven out of the White House within the Executive Branch. 

And as a person who served at the White House in the past on the 

National Security Council, I can understand how that vehicle is required. So I think it has got to be the White House that drives it. 

USTR can be the lead on a couple of the issues. They can lead, 

along with the State Department, on bilateral investment treaties. 

They can lead on AGOA. USAID and MCC can lead on some of the 

softer trade capacity building assistance, but what we have right 

now is a lack of an over-arching strategy that has a continental, 

regional, and country-specific approach to it. So I think, first, 

White House needs to be the driving force; two, needs to have a 

strategy including on trade capacity assistance; and then, three, 

have within at least the Executive Branch, budgetary authority attached to it. 

Obviously, Congress will have the final say on where the money 

comes and goes, but within the request needs to have some data 

authority attached to it, because money is what is going to drive 

things on a lot of these vehicles. And then lastly, at the country 

level, I think the U.S. Ambassador needs to be in a position to approve all of the government agency actions that involve this agenda, and that’s hit or miss right now. Sometimes that happens, but 

I think the Ambassador has got to be the final say for country-level 

activity. But back here in Washington, it has got to be driven by 

the White House. 

We haven’t had that these last 14 years, and we need to have 

that going forward, whether it is investment trade and policy as 

well as trade capacity building assistance. 

Mr. RANGEL. Thank you. 

Mr. Chairman, after the Members have all had an opportunity 

to inquire, I would like to hear from the other two witnesses. 

Thank you so much. 

Chairman NUNES. Thank you, Mr. Rangel. 

Now, I recognize Mr. Reichert for five minutes. 

Mr. REICHERT. Thank you, Mr. Chairman. Sorry I missed some 

of your testimony. We all have other venues we have to run to and 

come back to. I want to follow-up, I think, on a little bit of what 

Mr. Rangel was talking about. I am guessing I am going to be 

heading in the direction of some strategies, but specific to a certain 

issue of growing exports. So I support a timely, seamless renewal 

of AGOA, and all of us do. 

In recent years some countries have begun to develop AGOA export strategies that identify measures that could be taken to promote a greater use of AGOA benefits. An example of that would be 

Kenya has developed a national AGOA strategy focused on diversifying its exports, easing barriers to exporting, and further strengthening ties with the United States and U.S. businesses. Specifically, 

this includes looking at ways to improve infrastructure, increase 

exposure by raising the profile of Kenya products, and reduce burdensome regulations. 

The problem is that most countries still don’t develop these strategies or look at AGOA strategically. And you mentioned some of 

your strategic issues, continental, regional, country, the Ambassador’s involvement and the involvement of the President. And I’m 

guessing that all of those components certainly would apply to 


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helping in this arena. Is there anything that is more specific to encouraging other countries to sort of follow the pattern that Kenya 

has sort of presented. 

Anyone? 

Mr. SCHNEIDMAN. Thank you very much for that, I think, very 

important question. 

The annual U.S. AGOA forum, I think, provides a great opportunity for every country to come forward with their national AGOA 

export strategy, and I think we have seen where certain countries, 

you know, are using the Internet much more effectively, and certain governments are using the Internet much more effectively to 

post contracts in national resource sector. And I think that we can 

make a concerted effort in our dialogue with AGOA beneficiaries, 

not only to have the develop national strategies on AGOA exports, 

but to post them on the ministries of trade. 

And maybe they can also be posted on AGOA.gov, our UST, our 

website. And if these AGOA strategies are developed in the right 

way, the result of a consultation between local, private sector, civil 

society government, other stakeholders, I think they could be terribly effective. So I would like to see over the next two or three 

years that every AGOA beneficiary come forward with a national 

strategy that we can understand and that we can measure progress 

against. 

Mr. REICHERT. Other comments? 

Mr. LEO. Yeah. I would add one or two things to that. I think 

underlying your excellent question is African governments have the 

ultimate responsibility to come forward with their own strategies 

that will build upon and seize the opportunity of preferential access 

to the U.S. market. And within that, I think the U.S. Government 

should be prioritizing its engagement and its very scarce assistance 

dollars on those governments that have demonstrated a strong 

commitment to reforms and action. So in the case of Kenya coming 

forward with its strategy and hopefully taking very concerted actions as well, I think that is a great indication of a strong partner 

for the U.S. to engage with and support through a variety of different tools. So I think the first action has to come from African 

governments. 

Within that context on our side, going a little bit further than 

what I mentioned before, when we are thinking about trade capacity building assistance, I think there is a great opportunity to work 

within these strategies, and, if required, to supplement them with 

constraints analysis—growth and trade constraints analysis. I mentioned the political will to implement reforms. I have to look at 

that, opportunities at the sector level for greater trade as well as 

the ability to attract investment. 

I think it’s those kinds of things that need to be guiding principles when we are determining where scarce resources should go. 

But it all needs to flow from governments stepping up and coming 

forward with strategies, but, more importantly than strategies, action. 

Mr. REICHERT. Thank you very much, Mr. Chairman. I yield 

back. 

Chairman NUNES. Thank you, Mr. Reichert. 

Mr. Neal is recognized for five minutes. 


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Mr. NEAL. Thank you, Mr. Chairman. 

Mr. Rangel and I, I think, were the only two here when this was 

actually signed into law, and we were the original supporters of 

AGOA. And the result has been encouraging, not just on the engagement front, but on the economic playing field as well. It has 

been estimated that there have been 1.3 million jobs created in Sub 

Saharan Africa, and U.S. trade with AGOA nations has grown by 

300 percent from 7.6 billion in 2001 to 24 billion last year. But 

there remain significant barriers to trade with Africa, including 

high tariffs, forest localization requirements, legal restrictions on 

investment and custom barriers amongst other issues. 

I think that there will be an opportunity when we look to extend 

AGOA to address some of these issues in a vigorous manner, but 

Dr. Schneidman, let me speak specifically to a question you raised 

in terms of how repatriation might spur job creation. As you know, 

that argument over repatriation has been offered in a flattened, 

round manner in this town for a considerable period of time, and 

it is in the background and much of the public debate. 

Many argue that repatriation would rescue a lot of money that 

is sitting offshore with tangible assets that could be better used 

here at home. But there’s another debate as well that corresponds 

to it, suggesting that essentially if we do any sort of repatriation 

right now, you will never get tax reform. People will just write, 

once again, for a tax holiday, and inversions will continue to move 

along at the pace that they are currently embracing. 

So I would give you some time to explain your repatriation proposal. 

Mr. SCHNEIDMAN. Congressman Neal, thank you very much 

for that very important question. You know, this is an idea that actually a number of us have been considering for a long time and 

there are several components to the answer. 

One, I think we should think of a tax credit, a tax incentive as 

a spur to economic development in Africa, much like in Puerto Rico 

in the 1990s. We used a tax incentive to attract American investment there. I think the same dynamic would occur in Africa. There 

are going to be some 40 million jobs shifting from China and elsewhere to Africa by 2040, and I think U.S. companies need to be 

part of that. And if we go to zero on a tax incentive, that would 

be a signal to the tens of thousands of American companies who 

continue to see Africa as a continent in crisis, that there is something different going on there. 

And I think that would help American companies get into the 

game on the Continent in a very constructive way. And if they 

start making investments in agricultural investments, in manufacturing, in technology, I think that will have profound implications 

for economic development in Africa and I don’t think it would be 

zero sum for the United States. I don’t think it would be taking 

jobs away, and it would provide an incentive, not only to invest, 

but if it’s invested in a job-creating project on the Continent, it generates a profit. That money comes home and it is used constructively to invest in jobs here. I think that is a win-win, and I think 

we have to move to a new paradigm. 

We have that opportunity now, with the reauthorization to ask 

the question, how do we get more U.S. investment into Africa. And 


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I think we do that by lowering the risk and increasing the return 

for American companies, and I think that would be the kind of incentive that would help American companies transfer technology, 

create jobs, deepen our connection with a continent that is rapidly 

emerging, and a continent with whom we have little contact and 

with whom we should have much, much more. So I think it would 

cost fairly little. 

We have done some studies on that and I think the return would 

be quite significant, and it would build on the good trust that we 

have with many African governments. And they would see that we 

are truly committed to moving to this new relationship, one of mutual benefit where we can talk about a mutual partnership in a 

number of areas, not only economic development. 

Mr. NEAL. Thank you, Mr. Chairman. 

Chairman NUNES. Thank you, Mr. Neal. 

Mr. Buchanan is recognized for five minutes. 

Mr. BUCHANAN. Thank you, Mr. Chairman. And I want to 

thank Chairman Rangel for his leadership. I notice you have put 

a lot of energy, as the Chairman mentioned. So I appreciate your 

effort, and I agree with you. It is nice that we can find a way to 

come together once in a while. I like that for the sake of America. 

Let me just mention we all have seen the numbers about the jobs 

and the three-fold growth. I have had an opportunity in the last, 

probably couple, three years. I have been in 10 different African 

countries, most of them that have AGOA. And the general feeling 

over there is there is not a lot of enthusiasm on their side. You 

know, frankly, there is not a lot of enthusiasm on our side. I think 

this has to be looked at in a much broader context. 

We need to really engage the Administration, get more involved. 

I had met a couple of equity companies from New York that were 

in Ethiopia that were doing very well. They were in cement and 

block. They don’t have access to capital. And, as you mentioned 

about China, it was my observation—pretty much every country I 

was in—China was building facilities, primarily palaces and government facilities for a lot of different places all over Africa. It was 

pretty universal from that standpoint. 

We are making a commitment more in terms of healthcare and 

other things that we are involved in, but I think it is an enormous 

opportunity. I think three times the amount of growth, from eight 

billion to 25 billion, is not exceptional. I think there is a real opportunity to go forward, but we really need to take a look at AGOA 

in general. I can just tell you, and like I said, I don’t mean to be 

redundant, but it was pretty universal, talking with a lot of heads 

of states and business people over there. They liked it, thought it 

was okay, but not great, and I think we really needed to take a 

look at what more we could be doing. 

So my question I guess to all the panelists is what are a couple 

of things that you would recommend that we might do going forward to make the difference, to bring some more enthusiasm. Because I would like to see us build a better partnership with Africa, 

and there’s other countries, like China and others that are fully engaged over there. And we don’t want to find ourselves in five or ten 

years in third place. 

So, Mr. Leo, what are your thoughts? 


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Mr. LEO. Thank you, sir, and I think you raised what is a very 

core, fundamental question about our U.S. policy towards this very 

strategic and dynamic region. In direct response to your question, 

I think there is a couple of things that we could do that would 

bring our engagement and our relationship to a higher level. 

First, before going into the specifics, though, first, it is not surprising that you have heard from the heads of state that you have 

met with about the need for economic engagement. When you look 

at existing surveys of ordinary African citizens, over 70 percent of 

them across the continent cite economic-related issues as their 

most pressing concerns, that they want to have their governments 

focus on. And as you would expect as related to that, there were 

external partners, and this is the issue African leaders are totally 

focused on it. So as a result, along with the very significant opportunities now and in the future, this is where we should be focusing 

our attention much more than we are today. So, what are the 

pieces? 

One, I think a seamless extension of AGOA. I think that is pretty 

straight-forward. I don’t think there is a lot of controversy on that. 

Two, the pieces that I mentioned before in terms of making our 

trade-related assistance much more strategic and focused on the 

most pressing constraints to a firm’s ability to be globally competitive; three, following the leadership out of the House with the Electrify Africa Act, focusing on those kinds of constraints; and, with 

that, the reauthorization of the Overseas Private Investment Corporation. If African governments and leaders and businesses are focused on attracting investment, OPIC is one of the best ways to do 

it. 

We need the Senate to move on the Energize Africa Act, which 

will do a multi-year reauthorization, but also give OPIC additional 

tools. They don’t need more money. They don’t need more appropriations. They need more flexibility and tools to be more effective 

and scaled. So I would unleash OPIC as another piece. 

I mentioned bilateral investment treaties. That’s another tool 

that is very low cost. It is basically staff and travel expense to be 

able to do this. It is not billions of dollars. 

Witney had mentioned the risk profile. Well BITs are one way 

of addressing that issue at almost zero cost to taxpayers. 

Mr. NEAL. I would like to get some additional comments, Mr. 

McRaith. 

Mr. MCRAITH. Yes. So it is a great question and I don’t want 

to kind of undermine the discussion that has just been had; but, 

what I would maybe go back and focus on is the fact that we are 

at a moment in time today that is different to where we were 15 

years ago. So you could say AGOA failed. I am not sure what the 

appropriate terminology is. 

If you look at my industry, the apparel industry, we failed $24 

billion worth of AGOA-driven trade, only of which 900 million of it 

is from the apparel sector. A labor intensive—in fact, generally the 

first mover, most labor intensive industry in the world, and it has 

typically led the way into most developing countries. The time is 

now. It wasn’t right 15 years ago. It is right today. So it will be 

the private sector that actually drives most of this, and we need 

the on-the-ground ambassadors who, in Ethiopia, were incredibly 


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supportive of the work we did there on a recent trip in Kenya, 

similar in Uganda. So I think that we have got to help the nations 

shake off the old AGOA, because I think they languish in it. It 

didn’t work. There is no energy around it. You go to Africa. China 

is present everywhere. 

Mr. NEAL. Everywhere. 

Mr. MCRAITH. Europe is present everywhere. America is MIA 

at this point. We are missing in action. 

Mr. NEAL. That’s my point, I think. 

Mr. MCRAITH. But renew AGOA, because everyone is looking. 

Everyone is ready to go. However, when you think of September 

2015 as the renewal date, the renewal date is today, because it 

takes us a year to figure out what we are doing there. We are 

ready to go. We are ready to go. We are ready to move, and this 

is sitting right in front of us. And, quite frankly, if we do not renew 

AGOA, it is not about the timing of entry. It is about the exit. 

Mr. NEAL. We are probably out of time, but that was good. Do 

you want a quick comment? 

Mr. SCHNEIDMAN. Yes. 

Chairman NUNES. Just quickly, Mr. Schneidman. 

Mr. SCHNEIDMAN. I will tell you, Congressman. Let me just 

mention two things. One, I agree fully with the comments right 

here that we need to get the framework done in place. Renew 

AGOA as quickly as possible. My second point is I think we have 

to stir people’s imagination, and that was done on Sunday when 

the U.S. African development foundation gave 36 grants of $25,000 

each to the Washington Fellows who are here as part of the Young 

African Leadership Initiative. 

We need to take that to scale, and I think if we can be seen as 

catalysts of entrepreneurship, catalysts of innovation, that’s what 

America does best and that is what Africa is so thirsty for. So I 

think we can play it a number of different levels at the same time, 

but we just have to get going to do it. 

Mr. NEAL. Thank you. 

Chairman NUNES. I thank the gentleman. 

Mr. Blumenauer is recognized for five minutes. 

Mr. BLUMENAUER. Thank you very much, Mr. Chairman, and 

I appreciate the way that you and Mr. Rangel have organized this 

hearing. I am sorry I was called away from one, but I had a chance 

to review the testimony. 

I appreciated, Mr. McRaith, your reference to sustainability, and 

there was some acknowledgment of environment. But I want to 

seek feedback from each of you, because my limited involvement 

with the African continent, I have only traveled there a few times. 

Although I did get quite an experience through the eyes of my 

daughter who was a Peace Corps volunteer for two and a half 

years, and then traveling with her, watching it from the other side, 

and the conversations I have had with elected officials from Africa. 

I am deeply concerned that we use this as an opportunity to put 

a focus on sustainability, on environmental protection, because 

some of the most egregious practices imaginable are taking place, 

and we are watching. I think the case is clear that there is going 

to be rapid economic development and there should be. And we certainly are not interested in holding people back, but there are alVerDate Sep 11 2014 16:47 Oct 14, 2016 Jkt 021110 PO 00000 Frm 00044 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\21110.XXX 21110

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ternative paths. And I would just appreciate any of you elaborating 

on this point, about how we should approach this agreement as a 

vehicle to highlight sustainable environmental practices, be able to 

incent the right things, and perhaps a signal to not engage in some 

of this destructive behavior that we are seeing. 

Mr. MCRAITH. So, Congressman, maybe I can take a response 

to that. So, again, I am going to focus my response around what 

we refer to as the EAC and Ethiopia, so the Northeastern Region 

of Africa. And, you know, so there are some givens on sustainability. You are looking at countries between Ethiopia, Kenya and 

to some degree into Uganda. And I know Ethiopia is not part of 

the EAC, but hopefully will be soon, countries that are virtually 

100 percent sustainable energy today, either hydro, wind, or eventual thermal energy that they will have put into place. So already 

I would say they are ahead of many countries in these manufacturing powerhouses that exist today in the term ‘‘sustainable’’. 

What I would also say is for 30 years from the demise of the European and U.S. manufacturing base for the last 30 years, companies like ourselves and those partners that we work with, we’ve 

had successes and we have had many failures. But we have learned 

from every one of those. And, you know, its sustainability, just corporate social responsibility of which sustainability is a part, was a 

major theme of the trip that we were on. 

In fact, we had the opportunity to meet with the presidents of 

Uganda and Kenya and the Prime Minister of Ethiopia, and the 

simple question that we asked them was in 10 years from now how 

do you want people to perceive the brand of your company? So 

when people say ‘‘Brand Ethiopia,’’ how will they talk of Brand 

Ethiopia? Because the decisions you make today are going to determine how people think of it in 10 years. And we have processes in 

place today, the accord and the alliance. 

In Bangladesh, we are retroactively trying to correct some of the 

things that were not done appropriately, by engaging, but—not by 

stepping back and saying there are issues we can’t engage, but by 

actively engaging in bringing the right socially responsible partners 

to the table. Again, I would argue this will become a showcase in 

the world as to what sustainability could look like, what human 

rights compliance could look like, but we will do it through our 

presence. 

Mr. BLUMENAUER. I see my time is almost expired, but I 

would welcome elaboration from any of you on those elements, notwithstanding, for example, in Ethiopia where they are aggressively 

pursuing hydro. I mean there are lots of practices there that gave 

me pause, and that didn’t appear to be particularly sustainable, 

notwithstanding the energy. 

If there are elements that you see going forward with the agreement in a way that we can provide the right signals and incentives, 

as well as we’ve been doing a lot of work with illegal logging and 

having some problems with Peru these days—we thought we had 

worked out in the Peru Free Trade Agreement. Thoughts that you 

have that could be incorporated here would be deeply appreciated. 

Thank you, Mr. Chairman. 

Chairman NUNES. Thank you, Mr. Blumenauer. 

Mr. Smith is recognized for five minutes. 


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Mr. SMITH. Thank you, Mr. Chairman, and thank you to our 

witnesses for sharing your time and expertise with us today. And 

I don’t want to repeat this among the items that have been addressed by my colleagues. I certainly do want to add, perhaps, emphasis that I am encouraged by various efforts that can hopefully 

build more capacity. And I think there are great opportunities for 

the future here. And as we do work through the customers’ challenges and so forth, I am just wondering about some additional 

barriers that exist, specifically, with South Africa, Nigeria, and 

members of the South African development community as it relates 

to unscientific sanitary and phytosanitary and other tariff or nontariff barriers to agriculture, our agriculture exports. Can any of 

you reflect on that a bit? 

Mr. SCHNEIDMAN. If I may, Congressman, this is an issue that 

we have looked at carefully, and I think there is a feeling among 

a number of our poultry producers, for example, that South Africa 

does practice unfairly—has unfair practices as it concerns U.S. 

poultry products going into the country. And this is a problem, and 

I think we really need to engage the South Africans in a very sustained and serious way so that we can level the playing field, because South Africa is a very important partner to the United 

States. 

We tried to develop a free trade agreement 2003, 2006, and it 

didn’t work. South Africa has free trade agreement with the EEU, 

and it suggests to me that we really haven’t—we haven’t sorted out 

our relationship. So there are a number of issues, and I would like 

to see us really take a step back, engage in a sustained exercise 

between the U.S. Government and the South African Government, 

to really chart what our commercial future looks like and how we 

get sort of a ‘‘post to go on’’ relationship. Because I think it is going 

to start there, and we haven’t done a good job to really embrace 

that challenge. 

Mr. SMITH. Okay. Mr. Leo, in your testimony, you mentioned 

that preferential access under AGOA should be contingent on noticeable economic improvements. Would you suggest that these improvements would include ironing out these disputes based on the 

sanitary, SPS, if you will, standards or various trade policies relating to that? 

Mr. LEO. Thank you, sir, for the opportunity to comment on this. 

In full transparency, I am not intimately familiar with this set of 

issues related to South Africa. In terms of the eligibility requirements, though, more broadly, I think there is a couple of guiding 

principles that should be applied if Congress decides and the Executive Branch decides to go in this direction. I think it needs to be 

real and transparent in terms of the principles that would be applied to all countries and would be tracked by third-party data 

that’s public. So in essence it is apolitical in terms of, action has 

either been taken or it has not been taken. And then along with 

that there would need to be a transition period so that African governments actually have the opportunity to address any of the 

issues that are being tracked and then implemented in the country 

determination process. 

Whether the issues that you raised should be a part of those specific criteria that are related to the business climate or other operVerDate Sep 11 2014 16:47 Oct 14, 2016 Jkt 021110 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\21110.XXX 21110

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ating climate issues could be debated, could be discussed and 

maybe adopted later. At this point, I focus more in terms of what 

the guiding principles should be with specifics that could be fleshed 

out later, if the ‘‘parties that be’’ decided that this is a sound way 

to go, which I believe it is in general terms. 

Mr. SMITH. Sure. And I would very straight-forwardly suggest 

that the more we can stick to the scientifically based standards, the 

better off everyone is, whether it is consumers in another country 

who would consumer our products that are safe. We do want to 

focus on these standards that we have been able, I think, to 

achieve some progress in ironing these things out with some other 

countries. But it is something that I think needs addressing, and 

not just with this issue, but others too as we do move forward. 

Thank you, Mr. Chairman. I yield back. 

Chairman NUNES. I thank the gentleman. 

The gentlelady from Kansas, Ms. Jenkins, is recognized for five 

minutes. 

Ms. JENKINS. Thank you, Mr. Chairman, and thank you all for 

being here. 

The Peterson Institute forecasts that the Trade Facilitation 

Agreement could add 500 billion to the GDP in developing countries; yet, India and certain African countries have balked at implementation. For Africa, in particular, implementation of the TF 

agreement holds potential to reduce barriers to intra-African trade 

and to promote Africa’s integration into global supply chains. 

We are all watching the upcoming implementation deadlines and 

hope all countries promptly and fully adopt the TF agreement. 

And, gentlemen, I would just be interested in how would implementation of the TF agreement promote regional integration in Africa and help to address supply side constraints. 

Mr. Leo. 

Mr. LEO. Thank you. Thank you for the question, and I think 

it is a really big, important issue. And right now I think it is a 

quite difficult issue in terms of where those negotiations are and 

where some of the positions are. 

I think within the trade facilitation agenda, everyone agrees that 

it is critical for the issues that you talk about as well as U.S. businesses to be able to operate. Whenever I talk to U.S. businesses, 

this is actually their number one issue that they want to get focused on. So I think it would have a big impact. I don’t have any 

great ideas in terms of how we want to get from where we are now 

to where we need to be beyond some just general points about 

needing to engage with all of the major players who are driving the 

continental positions that are feeding into the WTO and some of 

the back channel discussions. But it is an issue that needs to be 

put behind us as quickly as possible so we can focus on the substance and addressing some of the underlying issues that are holding back or constraining opportunities now and in the future. 

Ms. JENKINS. Any of you have any additional thoughts? 

Mr. MCRAITH. Yeah. So I will give it from an Apato perspective, 

you know, because one of the challenges—we often refer to Africa 

in some cases as if it was a country, and it’s clearly a continent 

of significant size. And what we see within Africa is we see different trade blocs emerging, COMESA, the East African CommuVerDate Sep 11 2014 16:47 Oct 14, 2016 Jkt 021110 PO 00000 Frm 00047 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\21110.XXX 21110

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nity, SADIC, has been in place for some time, and we continue to 

see the growth of those trade groups. And our own encouragement—and again I’d go back to the discussions that we have been 

having there—is how do we now think of Africa’s regionalized, regional locations that include multiple countries that allow trade to 

flow freely in any direction, so across-border trade, unrestrained, 

untaxed, no-duty. 

What I would tell you is from our perspective in Northeast Africa, we were struck at the level of the commercial ministries and 

just how focused they were on resolving these cross-border trade 

negotiations. So we walked away with the rest of the group, highly 

encouraged where all of Africa might have free trade movement 

within their collective regions. This was going to be solved and addressed; and quite frankly with or without us, it was going to be 

addressed. 

Ms. JENKINS. Okay. Mr. Schneidman? 

Mr. SCHNEIDMAN. Thank you for the question. I have just a 

brief comment. And it is: I think we need to make progress. We 

need to move forward in areas where we can make progress. The 

Administration has proposed a trade and investment treaty with 

the East African Community, and I am hopeful that we are able 

to conclude that very soon, and then that becomes a model. The 

benefits of that relationship becomes a model to other regions on 

the Continent, that hopefully would provide an incentive of the 

benefits of working more closely with the United States, because I 

think that is a most effective demonstration of what the U.S. has 

to offer as a trading partner. 

Ms. JENKINS. Okay. Thank you. I yield back. 

Chairman NUNES. I thank the gentlelady. 

The gentleman from Indiana, Mr. Young, is recognized for five 

minutes. 

Mr. YOUNG. Thank you, Mr. Chairman, for your leadership on 

this issue. Ranking Member, I appreciate your longstanding interest and leadership on this issue as well. 

Chairman NUNES. If the gentleman will yield, I forgot to introduce you also that you will be representing our Committee at the 

AGOA meetings next week. And I want to thank you for that, representing the Republican side. 

Mr. YOUNG. Happy to do it, and I found your testimony here 

today quite instructive in preparing me for visiting with some of 

these African dignitaries in getting some more context and texture 

with respect to reauthorization. Also in addition to that duty and 

responsibility, which I am happy to have, I am a co-chair of the 

Transatlantic Trade and Investment Partnership Caucus here in 

Congress. So on a periodic basis, I will visit with European leaders, 

diplomats, trade ministers, and so forth, with a few of my other colleagues. 

So the intersection of U.S.-EU relationships, trade relationships, 

U.S. African trade relationships to me is quite interesting; and in 

fact we are having a TTIP caucus meeting in less than an hour. 

And so my line of inquiry here is directly related to that subject 

matter. In recent years, the EU has pushed African countries out 

of its own unilateral preference program and into reciprocal, bilateral trade agreements. The EU calls them economic partnership 


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agreements. Of particular concern, the tariff preferences and the 

EU South Africa EPA have largely entered into, force—In U.S., exporters are at a significant disadvantage in losing market share. 

The EU is pushing EPAs with many other AGOA members that 

would further disadvantage U.S. exporters. While Congress has 

never required that AGOA countries provide reciprocal access to 

U.S. exports, the fact that some are now offering this preferential 

access to the EU, but not the United States has raised serious concerns. 

Mr. Schneidman, what can we do to address the EU’s actions? 

Mr. SCHNEIDMAN. Thank you, sir, for I think one of the central questions in U.S.-African and U.S.-EU trade today. I firmly believe that this should be a topic in the U.S.-EU dialogue in the 

TTIP negotiations. How is it that we are offering the Europeans to 

create the largest free trade area in the world, when they are basically compelling African governments to accept these EPAs that basically shut us out of the African market? 

That is a pretty stark dynamic that is in place, and I am just 

stunned that the Administration really hasn’t embraced that more. 

And I think, really, we need to start with EU, because there has 

been a lot of opposition in Africa to these EPAs. And many of the 

African governments really have had no choice but to sign on to 

these. 

Mr. YOUNG. Right. 

Mr. SCHNEIDMAN. So I think, you know, we need to engage the 

African governments as well. I think we need to do this in the U.S.- 

EU context, and a U.S.-African context, but it just stuns me that 

we are talking about offering a non-reciprocal benefits to Africa at 

the same time that the EU is talking about a reciprocal relationship. And to Africa’s benefit, I think it should be harmonized more 

directly, and I think the first place to start is in the TTIP negotiations. 

Mr. YOUNG. Mr. Leo, do you have anything to add to those remarks? 

Mr. LEO. Yeah. Congressman, I don’t have a whole lot to add beyond what Witney mentioned. 

One of my colleagues at the Center for Global Development, Kimberly Elliott, has spent a lot of time looking at exactly these sets 

of issues. And, if you are amenable, I am sure she would be very 

pleased to follow up with you with additional thoughts as well. 

Mr. YOUNG. Okay. Well, I thank you all for being here, and I 

yield back. 

Chairman NUNES. I want to thank the gentleman from Indiana 

and for his active participation in the African continent issues. We 

look forward to having a good week next week and hearing back 

from you. Thank you, Mr. Young. 

With that, I would like to thank all the witnesses for their testimony and for the responses to our questions. I think you have 

given us all much to think about. Our record will be open until August 30th, and I urge interested parties to submit statements to inform the Committee’s consideration of the issues discussed today. 

This hearing is now adjourned. 

[Whereupon, at 3:14 p.m., the Subcommittee was adjourned.] 

[Submissions for the record follow:] 


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Africa Coalition for Trade, Statement 


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Africa Cotten & Textiles Industries Federation, Statement 


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American Sugar Alliance, Statement 


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Brown Shoe 072914TR, Letter 


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Footwear Distributors and Retailers of America, Letter 


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National Pork Producers Council, Statement 


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CBI Sugar Group, Statement 


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Æ 


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