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86–221PDF 2014

WILL THERE BE AN AFRICAN

ECONOMIC COMMUNITY?

HEARING

BEFORE THE

SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH, 

GLOBAL HUMAN RIGHTS, AND 

INTERNATIONAL ORGANIZATIONS

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

SECOND SESSION

JANUARY 9, 2014

Serial No. 113–157

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ADAM KINZINGER, Illinois 

MO BROOKS, Alabama 

TOM COTTON, Arkansas 

PAUL COOK, California 

GEORGE HOLDING, North Carolina 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

STEVE STOCKMAN, Texas 

RON DESANTIS, Florida 

TREY RADEL, Florida 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

LUKE MESSER, Indiana 

ELIOT L. ENGEL, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

JUAN VARGAS, California 

BRADLEY S. SCHNEIDER, Illinois 

JOSEPH P. KENNEDY III, Massachusetts 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH, GLOBAL HUMAN RIGHTS, AND

INTERNATIONAL ORGANIZATIONS

CHRISTOPHER H. SMITH, New Jersey, Chairman 

TOM MARINO, Pennsylvania 

RANDY K. WEBER SR., Texas 

STEVE STOCKMAN, Texas 

MARK MEADOWS, North Carolina 

KAREN BASS, California 

DAVID CICILLINE, Rhode Island 

AMI BERA, California 

(III)

C O N T E N T S 

Page

WITNESSES 

Amadou Sy, Ph.D., senior fellow, Africa Growth Initiative, The Brookings 

Institution ............................................................................................................. 6

Mr. Stephen Lande, president, Manchester Trade ............................................... 22

Peter Quartey, Ph.D., senior research fellow, Institute of Statistical, Social 

and Economic Research, University of Ghana ................................................... 30

Witney Schneidman, Ph.D., nonresident fellow, Africa Growth Initiative, The 

Brookings Institution ........................................................................................... 37

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Amadou Sy, Ph.D.: Prepared statement ................................................................ 8

Mr. Stephen Lande: Prepared statement .............................................................. 26

Peter Quartey, Ph.D.: Prepared statement ........................................................... 32

Witney Schneidman, Ph.D.: Prepared statement .................................................. 40

APPENDIX 

Hearing notice .......................................................................................................... 60

Hearing minutes ...................................................................................................... 61

(1)

WILL THERE BE AN AFRICAN ECONOMIC 

COMMUNITY? 

THURSDAY, JANUARY 9, 2014

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH, GLOBAL HUMAN RIGHTS, AND INTERNATIONAL ORGANIZATIONS,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 2:13 p.m., in room 

2172, Rayburn House Office Building, Hon. Christopher H. Smith 

(chairman of the subcommittee) presiding. 

Mr. SMITH. The subcommittee will come to order, and good afternoon. 

The African Union, or AU, is in the midst of a long program to 

create an African economic community through the eventual merging of existing regional economic communities. U.S. policy is to support regional integration in Africa as is enhancing the success of 

U.S.-Africa trade by reducing trade barriers and creating larger 

markets. This hearing will examine the AU effort and its potential 

benefits for Africa as well as the United States. 

A focal point in U.S.-Africa trade policy is the encouragement of 

integrated markets in Africa. It makes trade with Africa more efficient and beneficial for African businesspeople as well as governments. It is also more attractive for foreign investors. 

The AU, a regional grouping of all countries except Morocco, was 

established in 2002 as the successor of the now-defunct Organization of African Unity, or the OAU. Its formation was largely motivated by OAU members’ desire to more quickly achieve the goals 

of the 1991 African Economic Community Treaty, which was signed 

by some 51 heads of state. The treaty is intended to promote African regional economic integration and socioeconomic development 

through the planned creation of a common African market and 

shared political and economic institutions. 

Make no mistake about it, this is a challenging goal. The example of the European Community demonstrates the difficulty even 

when involving developing nations. The current African nations 

were not created to collaborate with one another. Varying languages, conflicting legal and commercial systems, and often incompatible transportation infrastructures make this worthy goal a 

major challenge, and there are other obstacles that make this effort 

even more daunting. 

Nevertheless, the eight recognized regional economic communities have a timetable to which they are generally adhering to 

2

with few exceptions. The Arab Maghreb Union, a trade agreement 

comprising Algeria, Libya, Mauritania, Morocco, and Tunisia, is inactive and frozen due to deep political and economic disagreements 

between Morocco and Algeria regarding, among other issues, the 

matter of Western Saharan independence. The Community of 

Sahel-Saharan States, comprising 28 countries across Africa’s 

Sahel region, is finding regional integration difficult because of its 

members being part of other trade blocs that are more advanced 

in their integration. 

Meanwhile, the Common Market for Eastern and Southern Africa, a free-trade area with 19 member states stretching from Libya 

to Swaziland, has agreed to an expanded free-trade zone and is 

also considering a common visa scheme to boost tourism. 

The East African Community, an intergovernment organization 

comprising some five East African countries—Burundi, Kenya, 

Rwanda, Tanzania, and Uganda—signed a protocol just last year 

outlining their plans for launching a monetary union within 10 

years. 

The Economic Community of Central African States, which includes 10 countries across the middle of the continent, formed a 

customs union with a free-trade area between members and a common external tariff for imports from other countries as long ago as 

1966. 

The Economic Community of West African States, a regional 

group of 15 West African countries, is creating a single large trading bloc to an economic and trading union and serves as a peacekeeping force in the region, all despite operating officially with 

three coequal languages: French, English, and Portuguese. 

The Intergovernmental Authority on Development is an eightcountry trading bloc based in East Africa and has transformed 

from an executive group with a focus on development and environmental control to a larger structure as a regional economic community. 

The Southern African Development Community began as an 

anti-apartheid coalition fighting for majority rule in South Africa 

in the 1970s, but since majority rule came to South Africa in 1994, 

it has become a traditional regional economic community and, like 

its West African counterpart, sometimes engages in peacekeeping 

operations. 

By 2017, a free-trade union and customs union is supposed to be 

established in each regional economic community. The process is 

still stalled in North Africa and the Sahel, although there is 

progress elsewhere. This phase is now fully enforced in East Africa 

as well as West and Central Africa. 

In today’s hearing, we are looking for recommendations on what 

the regional economic communities and their member countries 

must do to fulfill the AU’s ambitious agenda. We also want to examine what the U.S. Government, other donor governments, and 

international financial institutions can do to enhance their efforts 

in this regard. Ostensibly, this assistance has been ongoing for 

some time now. We want to find out more about these efforts and 

why they have not moved further ahead. 

We have with us an extraordinary panel of experts who have observed regional integration in Africa and, in some cases, have 

3

worked to promote it, for more than a decade. We know what governments have said about the benefits of regional integration, and 

we have heard from the private sector about their preference for 

integrated markets. Today we want to hear from some who can 

provide and have provided the technical assistance necessary to 

make these goals a reality. 

We in Congress are currently working on legislation to extend 

the Africa Growth and Opportunity Act, and integrated regional 

markets will only enhance the success of this trade process moving 

forward. We hope today’s contributions will better inform us on 

how we can be more effectively engaged in regional integration and 

the expansion of African markets. 

I now yield to my friend and colleague, Ms. Bass, the ranking 

member. 

Ms. BASS. Well, thank you very much, Mr. Chair. And Happy 

New Year. And I want to thank you, as always, for your leadership 

in holding today’s hearing, which is raising the question: Will be 

there an African economic community? 

This is a very important question as it relates to Africa’s economic development, and it is critical that we familiarize ourselves 

with the strategic roles played by the African Union, its Commission, member states, and individual regional economic communities 

regarding regional economic integration. 

As early as 1991, the African Union addressed this issue by identifying regional economic integration as crucial to Africa’s socioeconomic development, self-sufficiency, and financial prowess. The 

AU Commission’s prioritization of this issue and the commitment 

of AU member states and the RECs to support this effort was underscored at the 50th summit of the AU last May, which I had the 

honor of attending. 

Last September, in a keynote address at the Congressional Black 

Caucus’ braintrust here in Washington, DC, AU chairperson Dr. 

Zuma emphasized the importance of regional economic integration 

and stressed that achieving this goal would be socioeconomically 

transformative for Africa. As a strong supporter of increased trade 

and investment between Africa and the U.S., a component of which 

is the reauthorization and strengthening of AGOA, I applaud the 

AU’s objective of regional economic integration. 

I believe the growth in business and investment between the 

U.S. and African private sectors is a win-win scenario which can 

ultimately expand the growing service sector and contribute to capacity-building on the continent. It can also develop an increasing 

customer base for U.S. business comprised of a growing African 

middle class, trends which develop and secure jobs in Africa and 

the U.S. 

The U.S. Government initiatives, such as Power Africa, Trade Africa, AGOA, and Doing Business in Africa, help to build trade and 

investment partnerships between the U.S. and Africa by focusing 

increasingly on partnerships with the private sector, the involvement of civil society in Africa, as well as the diaspora community. 

Feed the Future contributes to developing Africa’s agricultural sector and promoting food security. The success of the latter is particularly noteworthy this year, as the AU has identified 2014 as the 

year of agriculture and food security. 

4

These government initiatives increasingly work on a whole-ofgovernment basis and contribute to growth in key sectors of individual African countries and regions. 

Over the past few years, we have witnessed increased AU member states’ commitment to the greater goal of intra-African trade, 

promoted by the realization that old barriers to trade must be 

eradicated in favor of less complicated commerce-enhancing alternatives. We have also seen several African countries identified by 

the international financial institutions as having the fastest-growing economies worldwide. Especially given the reversal of the brain 

drain, record levels of remittances from hardworking and successful 

diaspora communities, and the expansion of middle-class consumerism, Africa is viewed as a good investment by several of our 

economic competitors. 

While this progress is commendable, African and American 

economists and observers stress that much more needs to be done 

to address ongoing infrastructural and capacity-building challenges 

faced by many African countries, particularly those dependent on 

the agricultural sector. Uneven income distribution, price subsidies, 

poor transportation networks and infrastructure, rampant unemployment and underemployment of young people, poor access to 

electrical power, and, frankly, a greater need for good governance 

has resulted in a pattern of uneven economic development across 

individual countries and regions. 

Against this backdrop, I welcome our witnesses here today. I am 

very interested in hearing from them about how the AU, the RECs, 

and individual countries plan to address these challenges. Secondly, as the U.S. seeks to strengthen trade and investment relations with Africa, what role should U.S. Embassies play in the 

process? 

And while AGOA has been very successful in increasing U.S.-Africa trade in oil and textile industries, which has limited job creation, frankly, there has been little success in exporting other 

AGOA-eligible products to the U.S. that could be produced by small 

to medium-size companies. Are AGOA-eligible countries developing 

strategies to increase exports of goods produced by SMEs? 

And, finally, in view of current situation in South Sudan, how 

does the EAC address Juba’s application for EAC membership? 

As I have said in previous hearings, we learn as much from our 

success as we do from our failures. As we hear from today’s witnesses, our focus should not only cover the broad diversity of success and the many challenges but the activities that worked well 

in addition to those that fail to accomplish their objectives. 

Thank you. I yield back. 

Mr. SMITH. Thank you, Ms. Bass. 

Mr. Marino? 

Mr. MARINO. I have no questions. 

Mr. SMITH. Mr. Cicilline? 

Mr. CICILLINE. Thank you, Mr. Chairman and Ranking Member 

Bass, for holding today’s hearing on this very important issue. 

I would like to offer my gratitude to the witnesses for their testimony and, more importantly, for the important work that they are 

doing. 

5

As one of the most resource-rich regions on the planet, Africa has 

always possessed tremendous economic potential. And while the 

eight regional economic communities in Africa develop closer ties 

and foster greater cooperation, the world will be watching attentively. It is imperative that the United States remain a strong trading partner with nations on the African continent throughout this 

process and, as Congresswoman Bass said, learn both from the successes as well as the failures. 

As regional integration improves, the African trading position 

and economy in general will improve, and I hope that we will see 

a correlating reduction in terrorism and political unrest in the region. 

I again thank the witnesses for their testimony, and I look forward to hearing the testimony. 

And I yield back. 

Mr. SMITH. Thank you very much. 

Mr. Weber? 

Mr. WEBER. I am good. 

Mr. SMITH. And Dr. Bera? 

I would like to now welcome our distinguished witnesses to the 

witness table, beginning, first of all, with Dr. Amadou Sy, who is 

a senior fellow at the Brookings Institution’s Africa Growth Initiative and currently serves as a member of the editorial board of the 

Global Credit Review. He focuses on banking, capital markets, and 

macroeconomics in Africa and emerging markets. Dr. Sy was previously deputy division chief of the Financial Service Division of 

the International Monetary Fund’s Monetary and Capital Markets 

Development. And Dr. Sy has also held a variety of positions at the 

IMF for the last 15 years, covering more than 20 countries and all 

the financial crises since 1998. He also worked on a project to set 

up a trust fund for capacity-building in Africa. 

We then will hear from Mr. Stephen Lande. Over his 50-year career at the State Department, the Office of the U.S. Trade Representative, and in private sector, Mr. Lande has worked extensively to expand U.S. trade. He has worked as a Foreign Service 

Officer, senior trade negotiator, and an Assistant U.S. Trade Representative. He has negotiated trade agreements with countries 

around the world, and he was instrumental in the creation of the 

Generalized System of Preferences, the Caribbean Basin Initiative, 

and NAFTA. Mr. Lande continues to work with African governments and teaches international trade at Johns Hopkins’ School of 

Advanced International Studies. 

We will then hear from Dr. Peter Quartey, who is an associate 

professor in development economics at the University of Ghana. He 

was formerly the deputy director of the Center for Migration Studies at the University of Ghana. He is also currently the board 

chairman of the University of Ghana’s Cooperative Credit Union. 

He has published extensively, and his research interests are private-sector development, including small and medium enterprises, 

development finance migration and remittances, and poverty analyses. He consults for the World Bank, the Organization for Economic Cooperation and Development, the Overseas Development 

Institute, and many others. 

6

Finally, we will hear from Dr. Witney Schneidman of Covington 

& Burling and the Brookings Institution. He is a senior international advisor for Africa at Covington & Burling. Dr. 

Schneidman, a nonlawyer, has a deep understanding of many of 

the major African countries as well as uniquely valuable insights 

into the recurrent challenges and opportunities across the continent. He provides strategic advice on the varied political, economic, social, and regulatory issues that are critical to companies’ 

success in Africa. Dr. Schneidman’s work focuses on U.S.-Africa relations, trade and investment in sub-Saharan Africa, and issues related to economic growth and regional integration on the continent. 

So, Doctor, thank you, as well. 

We will begin with you, Dr. Sy. 

STATEMENT OF AMADOU SY, PH.D., SENIOR FELLOW, AFRICA 

GROWTH INITIATIVE, THE BROOKINGS INSTITUTION 

Mr. SY. Chairman Smith, Ranking Member Bass, and members 

of the subcommittee, thank you for convening this important hearing to discuss Africa’s progress toward establishing an economic 

community. 

I appreciate the invitation to share my views on behalf of the Africa Growth Initiative at the Brookings Institution. The following 

views are my own and do not necessarily represent those of the 

Brookings Institution. 

Mr. Chairman, hoping for their countries to benefit from integration, 51 African leaders signed the Abuja Treaty in 1991 and established a roadmap toward an African economic community to be 

completed by 2028. Mr. Chairman, 23 years later, regional integration is happening across Africa, but progress is happening at different speeds. 

The eight building blocks of the treaty, the regional economic 

communities, have different levels of advancement across the components of regional integration, such as freedom of movement for 

capital and goods, labor mobility, and unification of currencies. 

Simply put, four RECs are measurably progressing at regional integration and four are falling behind. As of 2013, the East African 

Community appears to have made the most progress overall toward 

the stages of the Abuja Treaty. 

Even within regional groupings, the progress of individual countries toward achieving convergence target is uneven. The diversity 

of countries within the same regional bloc is at times very pronounced. For instance, the Central African Republic is the only 

non-oil-exporting country in the Economic Community of Central 

States. In South Sudan, a member of the Intergovernmental Authority on Development, IGAD, the humanitarian, political, and 

economic situation is deteriorating very rapidly. 

There is also significant overlap of membership between RECs. 

This is a problem because countries belonging to more than one regional bloc can find it difficult to prioritize their policies. 

Mr. Chairman, African governments will need to address a number of challenges to accelerate integration. They will need to maintain regional peace and security, strengthen common institutions, 

and streamline regional integration policies. 

7

Mr. Chairman, increased African regional integration would create larger markets, improve economies of scale, and reduce transaction costs for local, regional, and global trade. Greater U.S. exports to Africa will create more jobs on this side of the Atlantic as 

well as on the other side. 

And, as you know, there are ongoing efforts by the United States 

to support regional integration. In order for the U.S. to help support regional integration in Africa, I suggest deepened engagement. 

Mr. Chairman, I would recommend the following three actions to 

support regional integration. 

Number one, broaden the Trade Africa initiative to other RECs. 

Trade Africa so far focuses only on the East African Community, 

and there is merit in expanding it quickly to other RECs. At a minimum, impending their inclusion in the program, these RECs could 

build capacity by adapting to the harmonization standards being 

associated to the initiative. A roadmap for these RECs to join the 

initiative could be established. 

Number two, expand the Power Africa initiative to include regional projects. Power Africa so far focuses only on six countries. 

The initiative could coordinate with regional and continental initiatives to address the power deficit in the continent. This is important since regional projects could benefit from economies of scale 

and lay the basis for a regional energy market. 

Finally, number three, strengthen REC secretariats and commissions. Building strong institutions would help lay the basis for faster and better-quality economic integration and potentially for monetary integration. The U.S. could coordinate with the African Union 

and the RECs to encourage multilateral institutions such as the 

IMF and the World Bank Group to step up their support to regional integration in Africa. Since African nations lack representation in these global governance institutions, support from the U.S. 

on the multilaterals could greatly increase support for RECs. 

Mr. Chairman, Ranking Member Bass, and members of the subcommittee, thank you very much for convening this important 

meeting. 

Mr. SMITH. Dr. Sy, thank you very much for your testimony. 

[The prepared statement of Mr. Sy follows:]

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Mr. SMITH. And, without objection, your full statement and those 

of all of our distinguished witnesses will be made part of the 

record, and any additional documentation or statements you would 

like to have added to your text. 

Mr. Lande? 

STATEMENT OF MR. STEPHEN LANDE, PRESIDENT, 

MANCHESTER TRADE 

Mr. LANDE. When I hear my description, sometimes I think I 

should be speaking before the History Channel as opposed to such 

an august body. But I very much appreciate that. And hopefully 

some of my experience can be useful in terms of our discussion. 

Many people say that Africa is moving too slowly toward regional 

integration. May I remind you that the European Union started 

their efforts at regional integration in 1951 with the European Coal 

and Steel Community, from which they developed additional members and groups. But it was not until 1992—which, the way I subtract, 41 years later—that they really arrived at something that 

could be called a customs union. 

Africa has been at the game, as pointed out by Mr. Sy, since 

1994 when the Abuja Treaty was implemented, and it is hoped that 

they will arrive at this particular milestone of a customs union by 

2017. Even if it slips a couple of years, that is less than 30 years. 

So people should remember these are complicated things. Europe 

had a lot of advantages. They had trade. They had a history of 

being countries. They had a whole group of commerce that went on 

for years and years. They had an infrastructure project proposal. 

So one should not push too quickly. 

I could not believe the timing of this hearing. It was almost like 

people were listening in Africa and saying, we had better show 

something in terms of regional integration. So there have been two 

significant developments in terms of moving toward free-trade 

agreements. 

Number one, the ECOWAS, Economic Community of West African States, at an October 16th extraordinary summit, reaffirmed 

their decision that their free-trade agreement and customs union 

both will become operational as of January 1st, 2015. This will 

bring together, as pointed out in your comments, the Francophone, 

the Lusophone, the Anglophone, all kinds of different systems, 

Roman systems, common law systems. I cannot tell you all the 

tsuris and problems you had in putting something like this together. But this is quite an achievement. 

Similarly, the tripartite group, which combines the three regional 

economic communities in Eastern and Southern Africa and so on, 

they are planning to make operational by June 2014 their freetrade agreement. And then they have plans to further deepen with 

things in services, things in common customs procedures and so on. 

These are things that are moving along. You can talk about eight 

RECs, but let’s be very honest, we are talking about five that really 

count in this exercise. 

Central Africa is going a little bit slower. We have to figure out 

whether they continue alone, whether they join ECOWAS because 

they are all mainly French-speaking or not. Some Central African 

countries, such as Burundi, Rwanda, the Congo, Angola, have alVerDate 0ct 09 2002 10:31 Jul 14, 2014 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 F:\WORK\_AGH\010914\86221 SHIRL
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ready chosen to work within the tripartite group, so they are open. 

The Union of Arab States, the UMA, or Arab Maghreb Union, is 

not really moving in much a direction, so I don’t discuss that. My 

focus is on sub-Saharan Africa to see where we are headed and so 

on, et cetera. 

The U.S. should be very proud of the role it has played because 

we, ahead of any other countries, even ahead of the Europe Union, 

really began pushing regional integration back in the 1990s. We 

were the original sponsors, in many ways, of COMESA. We were 

the original supporters of ECOWAS and so on. Today there are 

many things we do, whether they are the regional hubs, which 

have been very effective operating in this particular environment. 

USTR has trade and information framework agreements with almost each one of the regional economic communities in place and 

so on. The State Department has appointed Ambassadors to each 

of the regional communities. So we should have a good feeling because of this particular project that is going on. 

The advantages, really quickly put, are: One, you have a much 

stronger fabric for political democracy, for maintaining good government if you do have regional economic communities. You have 

a lot more peer pressure to get that done. American companies 

need regional economic communities because American companies 

are too big to operate within 49 or 54 countries within Africa. They 

need that scope in order to develop. 

So this is a very important—to be part of the economies of scale 

and to include Africa within its own supply chains and end this annoying reliance on the Far East, and you know what that means 

without mentioning any countries’ names and so on. 

The African countries need them because of infrastructure, as 

Donald Kaberuka, the president of the African Development Bank, 

suggested that infrastructure projects must go beyond national borders. And it is pretty obvious that they really must. So that is the 

third reason. 

And the fourth was mentioned by one of the real icons of trade 

policy, Fred Bergsten, who recently retired as head of the Institute 

of International Economics, who said, listen, no one is going to listen to 49 countries in trade negotiations, 54 countries. You may 

call them cheaters. They are not cheaters; they are small. But if 

they were unified, people would listen to them. So from that interest, too, it is important in terms of negotiation. 

So no one makes any argument, I have never heard, against regional integration. It is the one area everyone can agree on. 

Run through very quickly and so on—make one other point. No 

one says that trade negotiations by themselves are going to get economic development. They are what we call a necessary but not a 

sufficient condition for growth. You have must have complimentary 

measures. 

And, in this case, I really must compliment the chairmen and the 

ranking members of this committee as well as any other committee 

with a significant involvement in Africa in this Congress—Ways 

and Means Committee, the House Foreign Affairs Committee, the 

Senate Foreign Relations Committee, and the Senate Finance Committee—because you guys put together an unbelievable request for 

information to the GAO. And it goes beyond simple trade matters. 

24

So you must look at AGOA as establishing the conditions but 

not—of a trade, establishing the conditions, but not assuring the 

free flow of goods. For that, you have to have the infrastructure development, you have to have the capacity-building, you have to 

have the rule of law. And your letter begins to address that. So we 

very much support this coordinated venture, and we hope it does 

continue and so on. 

Let me—can I have an extra minute? Thank you. 

And I won’t do that New York trick of just talking faster so no 

one knows a word you are saying. So I will take a breath and slow 

up. 

Mr. SMITH. Take two then. 

Mr. LANDE. Let me just run through very quickly eight suggestions that might be useful. Because that is why you go hearings, 

to make suggestions and so on. 

You need the seamless renewal—and let me emphasize—of a 

strengthened AGOA. Simply renewing AGOA by itself is not sufficient. We have a challenge. It takes time to put together an enhanced AGOA. We have a deadline called textiles, where people 

want that to be enacted very quickly because if you do not enact 

it in 6, 7 months before the program expires, you lose orders. So 

there seems to be work. 

I am an optimist, and I really believe that given the bipartisan 

nature of Africa, as represented here, maybe we could get something finished this year. I won’t say we can, but I want to have it 

strengthened, enhanced, and related to other policies and so on, 

which is extremely important. We must address some of the agricultural issues, for example. It makes no sense not to have 

groundnuts, sugar, and so on in there. 

Number two, very quickly, let’s think about empowering RECs in 

a new and unique way. Why don’t we think about designating regional economic communities for eligibility under AGOA instead of 

individual countries? If regional economic communities want to 

take on the responsibility of assuring that U.S. conditions are met 

for democracy, let’s do that. 

Number three, you have to look at conditionalities in general. 

For example, no one likes what goes on in the Congo, but the idea 

of passing a conflict-mineral law that only helps China and Japan, 

that adds $6 billion to the cost of U.S. companies doing business 

in Africa, throws people out of work in the very areas we are trying 

to get stability doesn’t make sense. So we have to come up with a 

much more targeted area for many of the things we do, recognizing 

that we must work with African peer groups and with other donors. Unilateral U.S. actions should only be taken as an absolute 

last resort. 

The biggest threat to regional integration is our friends in Europe. They are pushing for preferential access by threatening to 

close the market to African goods while we continue AGOA. That 

will not only harm U.S. exports in the most vibrant and fastestgrowing market in the world, but will also—but will also slow up 

African integration. 

Ethiopia is not in the mood at the moment to open up for Europe. Maybe Kenya will be forced to, but they export a lot of prodVerDate 0ct 09 2002 10:31 Jul 14, 2014 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 F:\WORK\_AGH\010914\86221 SHIRL
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ucts. How do you form a customs union if your major supplier, 

Ethiopia, has MFN duties and if Kenya is giving them zero duty? 

We are urging that, perhaps working quietly with Congress, your 

parliamentary groups, talking to USTR, remembering that TTIP 

must be approved here, the Transatlantic Trade Investment Promotion agreement, we just suggest that a little bit of discussion, 

maybe, may have the Europeans slow up their deadline. They have 

an arbitrary date, July 2014. Couldn’t be worse for AGOA, but we 

can deal with that. 

Number five, South Africa, a real challenge. They have a deal 

with Europe where we are being discriminated against. They don’t 

have a deal with us. We are urging that we look at this issue very 

carefully. We don’t think South Africa should be graduated. We do 

think U.S. exports should be protected. We have the best USTR in 

years sitting there now. I think he can deal with this challenge in 

some kind of a way. It has to be addressed one way or the other 

and so on. 

Number six, going very quickly, that we—and I agree with the 

point that was just made, that the OPIC, the MCC have to have 

regional programs. My partner, Tony Carroll, suggested before this 

body about 2 years ago that maybe we should suggest to MCC that 

20 percent of their funding goes for regional projects along the way 

and so on. 

And, again, a similar point on Trade Africa, we think is very 

good. We know it talks about focusing first on East Africa, then 

looking at other regions. We think that it should really begin to 

look at other regions now, particularly the type of support that 

USAID can give to get these negotiations finished. 

So, in short, what we are saying is that, with the exception of 

a challenge in Central Africa, Africa has a schedule. That schedule 

calls for 2017 free trade, 2019 customs union. They may slip a few 

years, but they are going to make it. We must make sure that our 

policies support that, and that is done through a program that has 

foreign aid on—that has support of private sector, everybody on a 

regional level, and recognizes the fact that AGOA should be renewed in its current form, but it should aim for reciprocity, but at 

the time that Africa is unified to negotiate as a group. 

Thank you very much. I am sorry I speeded up a drop, but your 

smile indicated that it was not being wasted. Thank you, sir. 

Mr. SMITH. Thank you so much. And after 50 years of experience, 

the few extra minutes were well worth it. Thank you, Mr. Lande. 

[The prepared statement of Mr. Lande follows:]

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Mr. SMITH. Dr. Quartey? 

STATEMENT OF PETER QUARTEY, PH.D., SENIOR RESEARCH 

FELLOW, INSTITUTE OF STATISTICAL, SOCIAL AND ECONOMIC RESEARCH, UNIVERSITY OF GHANA 

Mr. QUARTEY. Chairman Chris Smith and honorable members of 

the committee, I thank you for the opportunity to share my views 

on whether there can be an African regional community, with a 

specific focus on ECOWAS. I approach this topic based on my 20 

years professional experience. Although I work with one of the 

leading think tanks in Africa, the views expressed here are entirely 

mine. 

Mr. Chairman, in addressing the question whether there can be 

a regional economic community in Africa, I would like to focus on 

the achievements and challenges of ECOWAS, and hopefully this 

would inform the discussion on whether an Africa-wide community 

is feasible. 

ECOWAS, as some of you may know, has created a number of 

benefits to its member states, including, first, the maintenance of 

peace and security in the region, whereby the community serves as 

a peacekeeping force in the region; secondly, the promotion of free 

movement of people and goods between member states. And examples of this includes 90 days visa-free entry for members, the 

ECOWAS trade liberalization scheme and customs union. Mr. 

Chairman, also the integration of the agricultural base to promote 

food security is one of the achievements of ECOWAS, where we can 

make mention of the ECOWAS Common Agricultural Policy, which 

was instituted in 2005. 

We can also talk of the West African Common Industrial Policy. 

Creating a favorable business environment is also one of the 

achievements. We have what we term the ECOWAS Business 

Council, which is a regional, private-sector advisory body to 

ECOWAS policymakers. Reducing the procedures for registering a 

business, the number of days required to register a business, and 

reducing the cost of doing business dramatically have been the 

other achievements. 

Mr. Chairman, another achievement includes measures to improve the physical infrastructure. And some specific examples are 

the Regional Trade Facilitation Program, where member states improve the road network linking other member states. We can also 

talk about the West African Gas Pipeline project as well as the 

West African Power Pool Project, where power will be shared between energy-deficit and energy-surplus member states. 

Mr. Chairman, I would at this point outline some of the challenges facing ECOWAS. First, there are threats to regional peace 

and security due to political instability and internal conflicts. Secondly, the monetary integration is farfetched, as the six member 

states have been unable to meet the convergence criteria. 

The lack of well-structured and resourced institutions have also 

affected the operations of ECOWAS. Limited financial resources, as 

well as impediments to trade, and cases of harassment at the various borders continue. The high cost of business among member 

states is also reported as one of the challenges faced by the 

31

ECOWAS community. The ‘‘Doing Business’’ reports, for instance, 

ranked Ghana 128 out of 189 countries. 

Lastly, Mr. Chairman, the poor cross-border infrastructure and 

weak institutional and human capacity has affected the operations 

of ECOWAS. 

So, based on the achievements and challenges outlined above, 

Mr. Chairman, I am of the conviction that achieving an African regional community is possible, but that is an uphill task. 

Promoting integration in Africa will bring enormous benefit to 

the region as well as to the region’s partners. Integration, in short, 

would help Africa better police itself. The United States will stand 

to benefit from the collective fight against instability and terrorism 

if we promote regional communities in Africa. Also, Mr. Chairman, 

U.S. firms already in the region and potential ones who have a 

business environment to operate and secure their investments. 

The AGOA initiative as well as other initiatives of the USAID 

West Africa Trade Hub are better able to facilitate businesses in 

the subregion and access U.S. markets with greater integration. 

Mr. Chairman, integration would enhance the size of the African 

markets, and U.S. companies already operating in the region can 

expand output and employ more people, including Americans. 

In conclusion, Mr. Chairman,promoting regional integration will 

enhance the regional markets of African countries, would promote 

trade in the region, and facilitate peace and security. But this will 

require the support of the international community, especially the 

United States. 

Thank you very much. 

Mr. SMITH. Dr. Quartey, thank you very much for your testimony. 

[The prepared statement of Mr. Quartey follows:]

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Mr. SMITH. Now, Dr. Schneidman. 

STATEMENT OF WITNEY SCHNEIDMAN, PH.D., NONRESIDENT 

FELLOW, AFRICA GROWTH INITIATIVE, THE BROOKINGS INSTITUTION 

Mr. SCHNEIDMAN. Chairman Smith, Ranking Member Bass, and 

members of the committee, thank you for this opportunity to address the question, will there be an African economic community? 

It is not possible to know precisely when or even if the eight regional economic communities that are recognized by the African 

Union will fully integrate into one. After all, the Abuja Treaty of 

1991 envisioned the establishment of an African economic community by 2028. More recently, in January 2012, African heads of 

state committed to the creation of a continental free-trade area by 

2017, although the date was described as ‘‘indicative.’’

The decision by the African leaders to bring forward by 11 years 

the date for the continent’s economic integration is nevertheless 

important. It demonstrates that regional, commercial, and economic integration is a priority for the governments across the region. The accelerated date is also a recognition that the emergence 

of regional markets is central to Africa’s integration into the global 

economy and, ultimately, the acceleration of job creation and improvement in the quality of life and the eradication of poverty 

across the continent. It is also a recognition of the reality that 

greater integration will enhance efficiency and transparency and 

strengthen governance more broadly. 

In fundamental respects, therefore, an African economic community is both an aspiration and a tangible goal that is essential to 

work toward. Therefore, dates, such as 2017, are not as important 

as is our focus on the progress, or lack thereof, that is being made 

toward the development of regional markets and the free flow of 

goods, peoples, and services. 

So where are we in this process? It is apparent that progress toward regional markets is being made. However, like other trends 

on the African continent, progress is incremental, in many cases 

measurable, but it is not uniform. 

For example, the three regional organizations of North Africa 

have yet to harmonize activities and progressively eliminate tariff 

and non-tariff barriers. This was supposed to have been completed 

in 2007, according to the Abuja Treaty. In contrast, the East African Community is the only regional economic community to have 

achieved a free-trade area and a customs union among its five 

members, 3 years ahead of the 2017 date provided by the Abuja 

Treaty. Moreover, the East African Community; the Common Market for East and Southern Africa, COMESA; and the Southern African Development Community, SADC, have created a tripartite 

free-trade area which brings together 26 African countries with a 

combined population of 600 million and a GDP that is close to $1 

trillion. 

However, further steps have to be taken to ensure that the FTA 

is a reality. For example, an American businessman recently told 

me that he would rather pay the extra duty in shipping his goods 

from one SADC country to another rather than go through the paVerDate 0ct 09 2002 10:31 Jul 14, 2014 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 F:\WORK\_AGH\010914\86221 SHIRL
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perwork and other delays of applying for tariff exemptions for 

which his products qualified. 

Against this backdrop, it is unlikely that the continental freetrade area will be achieved by 2017. Nevertheless, there can be no 

dispute about the importance of continuing to work toward these 

objectives. For example, a recent study by the ILO and UNCTAD 

contends that if an effective continental free-trade area were created by 2017, the share of intra-Africa trade would grow by 52 percent over a 12-year period, rising from 10.2 percent in 2012 to 15.5 

percent in 2022. 

The message here is that the impact of regional integration on 

individual countries, regions, and sectors varies. Another message 

is that where progress on regional integration could be achieved, it 

should be pursued. At the same time, this does not mean we should 

give up on the goal of a continental free-trade area. There is no region in the world where progress is uniform. It does suggest that 

African governments should be held accountable to their commitment to implement trade reforms and regional economic integration. 

For example, 4 years ago, the Governments of Zimbabwe and 

Zambia signed an MOU to create a one-stop border post at 

Chirundu, on the border between the two countries. As a result, 

commercial vehicles now clear the border within hours instead of 

days. In fact, on the Zambia side alone, it has been estimated that 

tax collection has increased from $10 million to $20.3 million a 

month. So one has to ask, why are there not more one-stop border 

posts throughout SADC, COMESA, and EAC? 

Finally, it is important to note that in the U.S. strategy toward 

sub-Saharan Africa that the Obama administration released in 

2012, promoting regional integration is put forward as a priority. 

In fact, through Trade Africa, an initiative announced during President Obama’s visit to Tanzania last year, the administration hopes 

to launch negotiations on an investment treaty between the U.S. 

and the East African Community. This is a vital initiative that 

could significantly deepen commercial relations with East Africa 

and lay the groundwork for a deeper commercial relationship with 

the continent while also fostering more regional integration. 

In Bali last month, members of the WTO reached a very significant agreement on trade facilitation in which member states 

agreed to adopt reforms, especially as it concerns customs processes 

and procedures. The U.S. needs to ensure that enhanced trade facilitation remains a priority in its dialogue with its partners on the 

continent, be it in the context of the East African investment negotiations or the implementation of AGOA. 

My last point, if I may, reflects a spirited conversation that I had 

in late December with the leaders of our three trade hubs from 

Accra, Nairobi, and Botswana, which are sponsored by USAID. For 

the last 10 years, their role has been to help African companies 

take advantage of AGOA. Yet times are changing, as impressive 

economic growth takes hold across the continent and Africa’s middle class continues to expand. U.S. exports to the region also continue to grow, last year exceeding $21 billion, which translates into 

the support for more than 100,000 jobs here in the United States. 

39

Our trade hubs increasingly are playing a critical role in facilitating two-way trade. This is good for American business in Africa, 

it is good for regional integration, and it is good for economic development on the continent. It also helps to transform the U.S.-African relationship from that of donor-recipient to one characterized 

by partnership and mutual benefit. 

Yet, like all good things, resources are required. I urge you, 

therefore, to invest in these trade hubs as you and your colleagues 

work to fund U.S. priorities on the continent and we all work together to deepen the U.S.-Africa commercial relationship and build 

Africa’s economic community. 

Thank you. 

Mr. SMITH. Dr. Schneidman, thank you very much for your testimony, as well. 

[The prepared statement of Mr. Schneidman follows:]

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Mr. SMITH. Very useful and very timely suggestions from all of 

you, and it really will help us to be more proactive and to play our 

role, which we are very earnest to do. And thank you so much for 

taking the time to put together such outstanding testimony and for 

your service on behalf of humanity and on behalf of these initiatives in particular. 

Let me ask you just a few questions, and I will yield to my colleagues. We will expect a vote in about 45 minutes, so I want to 

make sure, since we have four, five of us here today, that we all 

get a chance to ask. So I will lay out my questions and then ask 

you to answer and then go to my friend and colleague, Karen Bass. 

With regards to the efforts by the United States Government to 

encourage regional integration, what programs have actually made 

a measurable difference? Are there things that we have not done? 

I know, Mr. Lande, you gave us a list of some eight specific 

things, and I wrote them down. And I am sure all of us will be 

looking at how we can, but are there any gaps that need to be filled 

right now to ensure the greater probability of success? 

The issue of transportation is always very important. It was Eisenhower who recognized that superhighways were one of the keys 

of very robust infrastructure, creating highways to get goods to 

market and to consumers. 

Over the many years, you, Mr. Lande, have promoted the use of 

the regional Millennium Challenge Account grants, only to be told 

that those grants require more accountability than the regional 

economic community could provide. And I wonder if you are seeing 

any kind of benign flexibility on the part of the Millennium Challenge Corporation to try to make this work so that, again, the sooner we get to the point where there is a very robust infrastructure, 

economic growth can proceed much more effectively. 

With regards to the rollout of the European Union, we all 

watched with some baited breath as the euro came on line and 

there was mistake after mistake. Are those lessons learned by 

what has happened on the European continent being utilized in 

this context of Africa? 

And, Mr. Schneidman, you pointed out that reaching the target 

date of 2017 is important, but we need to recognize progress itself; 

it may slip a few years. 

My question would be—a couple of things. One, you mentioned 

that the U.S. regional trade hubs in Africa managed by the U.S. 

Agency for International Development have had a positive impact, 

and you encourage Congress to continue funding them. The budget 

is almost done, and I think it is going to happen. But can you cite 

me some examples of success that these trade hubs have achieved 

so that we have something very tangible that we can talk about? 

Please proceed. 

Dr. Sy? 

Mr. SY. If I may answer the questions on the lessons from the 

European crisis, I think one key lesson from the European crisis 

is that financial integration comes with costs and benefits. 

In most African RECs, we are not yet at that level of high financial integration. But the key lessons is that, once that step will be 

reached to make sure that when financial flows from rich countries 

go to poor countries, that those flows go to productive investments, 

44

they increase productivity, and that, also, fiscal discipline is observed by the members. 

So, so far, we can, in the roadmap, when we are strengthening 

the institutions for integration, keep these lessons in mind. 

Mr. SMITH. Is there a concern, Dr. Sy, that, like in the European 

Union, like in the case of the Germans and others who were providing a great deal of financial assistance to places like Greece, 

that Nigeria and South Africa might be less forthcoming in this 

whole integration process if they think they are going to bear a 

burden? 

Mr. SY. Yes, so this is a good question, because if you take the 

case of Nigeria, it is a major oil exporter; whereas, other members 

in the RECs are not oil exporters. Nigeria is much larger. So when 

there will be basically an arbitrage between the costs and the benefits of actions by Nigeria, there will be the need to have a very 

strong and independent common central bank. 

So strengthening the institutions, the regional institutions, will 

be really key. And there will be also a need for Nigeria to have 

more fiscal discipline, too. 

Thank you. 

Mr. SMITH. Thank you. 

Mr. Lande? 

Mr. LANDE. You asked a very full set of questions, so let me respond to a few of them and see if we can be helpful. 

Mr. SMITH. Okay. 

Mr. LANDE. First, as to what the U.S. Government can do and 

so on. 

One, it is very clear to me that there are two separate levels of 

regional integration. One is what you call the trade regime. We 

talk about a lot for tariffs; we have made the point that they are 

moving along very nicely. However, there is never any credit given 

to Africa. It is always, to quote one of the best USTRs we ever had, 

Bob Strauss, years ago, and so on, when he said, you can either 

look at the glass half-full or half-empty. And these particular dates, 

the fact that they are set should receive something, maybe a sense 

of Congress. I am not sure what you would do, but at least they 

should be recognized they are moving along. 

The idea that every single REC is going to be ready for integration by 2017 won’t take place. But what I was arguing was, if you 

focus on the trade policy RECs, if you get ECCAS, Central Africa, 

somehow involved, you have a shot at making the deadline, maybe 

some kind of a derogation for the Maghreb and then—not the same 

close integration. So they are possible there. 

Trade involves four things: One, tariffs, trade facilitation. Witney 

is 100 percent correct, and let’s focus on it. We now have World 

Bank money committed, available to promote trade facilitation. Africa is invited to sign those agreements. A quick aside, they have 

no role for regional economic communities, so they should have one. 

But that is sitting there. 

Number three is rules of origin is being addressed. And number 

four, very quickly, are non-tariff measures. They are impossible. 

You know, we even have non-tariff measures in the States. You try 

to bring some fruit into California, and I think Congresswoman 

Bass might remember that. You know, the Europeans, you try to 

45

bring some French wine into Italy or Italian wine into France, I 

mean, it looks like blood on the street. 

So non-tariff measures are slow. Do not judge regional integration. They have to be removed like teeth, one by one, with a lot of 

pain every time they disappear. Maybe you don’t want the remove 

your teeth. But that is trade, I think, is on a good thing. 

Then the second thing is, how do you do the gaps? Don’t judge 

African integration because they don’t have a transportation link. 

They will have that. Let’s get the structure. 

Here again, MCC has a problem, Export-Import Bank has a 

problem, because their basic rules call for assurance of capital support, that money will be paid back. None of our competitors have 

that when it comes to Africa. Africa will pay back. Africa pays 19 

percent, a much higher rate, but they have more losses. So somebody has to begin going to Export-Import Bank, somebody has to 

begin going to MCC and say, we need special-purpose vehicles because we are talking about regional things. 

You may have to take a little more risk in Africa. That is why 

your letter is so crucial, because you asked that question, the eight 

committees. Maybe we have to get Financial Services in there. But 

if you could begin to address those problems—what are our competitors doing, what are we doing—we can make some progress 

along the way. 

Africans have said transportation, energy, capital markets, welcoming environment for investment, two or three other things, yes, 

they have to be looked at, but let’s keep those issues separate from 

the trade regimes that we are really working on to move forward 

and so on. 

Let me stop there, because I can go on, but I think it is time and 

other people—thank you. 

Mr. SMITH. Dr. Quartey or——

Mr. QUARTEY. Thank you very much, Mr. Chairman. 

I would just want to focus on the MCA, the Millennium Challenge Account, and to what extent is the U.S. intervention making 

a marked difference. 

Two specific areas can be mentioned in the case of Ghana. One 

is we have the George Walker Bush Highway, one of the excellent 

road constructions that the country has benefited from. It has 

eased trade flows, it has eased traffic, and it has made livelihoods 

much better within the community. 

Then we can talk of storage out of the Millennium Challenge Account compact. There was a silo that was built at the airport to 

store nontraditional exports, like pineapple, paw paw, and many 

others. And it is quite important. It made a lot of improvements 

in exports to Europe and other places. 

Lastly, good governance. I mean, the condition that there has to 

be good governance for countries to benefit from the compact actually serves as a peer pressure to other African countries to try to 

promote good governance within the country. So I think this is an 

area that we can talk of tremendous improvement. 

What we want to see would be long-term commitments to some 

of these projects that is not—the compacts are more integrated into 

long-term development plans of the regional communities so that 

46

we will see much more development. That will also link the various 

member states of the regional countries. 

Thank you very much. 

Mr. SCHNEIDMAN. Thank you, Mr. Chairman. Let me respond to 

some of these questions. 

What programs have actually made a difference? I think there 

have been a number of programs that have focused on computerizing border crossings, programs that I would say are incremental. What we haven’t seen is transformational programs. And 

I think that is the critical difference. 

And, for instance, in my testimony I referred to the one-stop border post. And so I think the challenge in front us is how do we get 

behind one program that really will be transformational and how 

do we set goals so in 5 years we know that there will be 40 of these 

one-stop border posts throughout this region and we can measure 

the difference that it makes. 

Secondly, I am very interested in your reference to President Eisenhower and the development of our highway network. It is a very 

important question and analogy. But remember, that was within 

one country. I think what we are talking about is cross-border. And 

there comes the sovereignty issue. 

The World Bank has had a very difficult problem with this. You can take the example of Tanzania, which has received an $850 million compact. But Kenya is not an MCC country, Uganda is not an 

MCC country. So there are constraints. 

And so I think what Steve was referring to, can we be creative, 

can Congress and the administration come up with mechanisms 

and criteria that would enable these programs to address cross-border roads or cross-border rails or cross-border power and utility 

services, I think that really has to be part of our conversation. 

In terms of the lessons of the euro, I think the European experience is being overshadowed, frankly, by these economic partnership 

agreements which the EU is trying to jam down the throat of many 

African governments. I don’t think there is any other way to put 

it than that. And I think, you know, Africa is really struggling to 

come to terms with that, and that is all they can see. And it is a 

really important issue for the U.S. as we go to think about the renewal of AGOA, as well. And in terms of citing examples of the 

trade hubs, with my colleague Zenia Lewis at Brookings, we did a 

study in 2012 where we have data on the amount of trade that has 

been increased. And I will make sure that you get a copy of that. 

Suffice it to say that these trade hubs are important. Not only 

have they increased trade, but some of them have done something 

else that is important. In West Africa, the trade hub is sort of a 

backbone for a framework of trade initiatives that reach out 

through the region. And I think they have provided a blueprint for 

the way forward—a way forward to deepen our knowledge of African markets, our access to African markets, and to start providing 

two-way assistance, not only for Africans exporting to the U.S., but 

for U.S. companies coming into the regional market. 

Ms. BASS. Thank you very much. 

Actually, I would like to continue on with the trade hubs. And 

you mentioned that more investment was needed, and I wanted to 

know what you meant by that. 

47

And then, also, if you could—you know, the trade hubs, to me, 

are a little bit of a mystery. In looking at some of them and seeing 

that USAID essentially has contracted with businesses, it is just 

not clear to me exactly what they do, what they are. And maybe 

you could focus on one specific example. 

Mr. SCHNEIDMAN. So the trade hubs were created with the African Growth and Opportunity Act and are part of the funding mechanism. There are three, as you know and as I referred to. 

Part of the problem is that, up until now, you are right, they 

have contracted out to different consulting agencies. And the trade 

hubs are doing three different things, really. There is not a uniform—up until now, there has not been a uniform strategy for 

these hubs. I think that is changing, but it bears watching very 

closely. 

The reason I say that it deserves more investment is that, traditionally, investments in the economic and commercial programs in 

Africa are at the bottom of the barrel. Obviously, health has been 

a critical factor, education has been a critical factor. But, again, 

times are changing, and I think we need a fresh look. 

We have to ask, do we need to invest more in our capacity to 

serve American business on the continent? And I would argue that 

we do for many reasons. First off, when you look at China, they 

have some 150 commercial officers across the continent. How many 

do we have? I don’t even think it is at 10 these days. 

So what is the forward point of our commercial engagement? It 

is these trade hubs. You know, Commerce has sort of receded from 

a presence in the region over the last decade, and the trade hubs 

provide a framework for serving U.S. business, for continuing to 

work with African companies as they seek to trade throughout the 

African region and export to the U.S. 

And I think the Foreign Service Nationals there who work in 

these trade hubs know these markets better than anybody else 

and, I think, are a real resource that can be tapped into. And that 

is why I emphasize it. 

Ms. BASS. So if I go to an Embassy, there is a sign there that 

says ‘‘Trade Hub’’——

Mr. SCHNEIDMAN. No. 

Ms. BASS [continuing]. And there is a person there? 

Mr. SCHNEIDMAN. No. In Accra, you would go to the Trade Hub. 

Ms. BASS. And that is an office, and it is called U.S. Trade Hub. 

Mr. SCHNEIDMAN. It is a dedicated office. And in Nairobi it is a 

dedicated office, and in Botswana it is a dedicated office. 

Ms. BASS. And there is a person in there who, if I want to go 

in and I want to start a business, I don’t know, manufacturing 

houses, modular houses——

Mr. SCHNEIDMAN. No, they would not be able to help you with 

that. Because their charter, to now, has just been to help African 

companies export to the U.S. under AGOA. To understand how to 

build houses there, you would have to go to the Commerce Department or the Commerce official in Nairobi, South Africa——

Ms. BASS. So I don’t go to that office, I go back to the Embassy? 

Mr. SCHNEIDMAN. Yeah, you go back to the Embassy. 

Ms. BASS. Uh-huh. 

48

Mr. SCHNEIDMAN. So what I am saying is that we need to harmonize this stuff. 

Ms. BASS. Right. 

Mr. SCHNEIDMAN. We need a one-stop shop. We are talking about 

one-stop border posts? We need a one-stop shop for U.S. trade facilitation and investment facilitation in Africa. 

Ms. BASS. And so I go to this trade hub, this office, and who 

monitors the contract that I have? I am running the trade hub 

now. Who is monitoring me to make sure that I am doing what I 

am supposed to do? 

Mr. SCHNEIDMAN. USAID is. 

Ms. BASS. And am I obligated to produce, what? Am I obligated 

to have, you know, 20 businesses from the U.S. do business on the 

continent? Or what is the measurement? 

Mr. SCHNEIDMAN. Well, again, helping U.S. business is not part 

of the mandate of trade hubs. 

Ms. BASS. Oh, I am sorry. Okay. 

Mr. SCHNEIDMAN. But, yes. I mean, I think they want to look 

at—well, for instance, in the West Africa trade hub, which clearly 

has helped African companies export to the U.S., there would be 

indicators there. 

I think the Southern Africa trade hub has really focused on regional integration. So I am sure they are measured against a set 

of criteria that determines whether or not that has been achieved. 

Ms. BASS. Do you know what the average size of a contract 

would be? If I am running a trade hub, how much money do I get 

from the U.S. Government? 

Mr. SCHNEIDMAN. I am sure you get a couple million dollars to 

do that. 

Ms. BASS. Ooh. 

Mr. SCHNEIDMAN. And I am sure that there are about 10 or 20—

you know, 10 to 15 people that are working under that contract in 

that trade hub to do that. 

Ms. BASS. So would you support the idea—when you were talking about that a better investment needs to be made, would you 

support the idea of expanding the number of trade hubs that we 

have? 

Mr. SCHNEIDMAN. I would support the idea of using, sort of building on the West Africa model, of using those trade hubs in Accra, 

for example, to start interacting with Cote d’Ivoire, to start interacting with Dakar, to start interacting with Ouagadougou. Nigeria 

is a little bit of a separate issue. But I think we should use those 

trade hubs to really be catalysts for regional trade and investment. 

And I think we need to approach our increased commercial engagement from a regional point of view as opposed just to a country 

point of view. 

Ms. BASS. Well, it seems like a regional point of view, but it also 

seems like we need to have, like you said, Commerce there. I mean, 

if they can only do one thing, which is to help export to the U.S., 

it seems like we would want—I mean, who facilitates U.S. businesses doing business on the continent? That is Commerce. 

Mr. SCHNEIDMAN. Right. So I think in these trade hubs, it really 

needs to be not only the USAID contractors but Commerce, as well 

as representatives from Ex-Im, from TDA, from OPIC, so all our 

49

commercial agencies are working together so you do have a wholeof-government approach. Because now we sort of have a no-government approach. 

Ms. BASS. Right. 

Mr. SCHNEIDMAN. And I think that is really what we have to 

change. 

Ms. BASS. And are there reports online that I could see to see 

what the three trade hubs have done? I understand you said they 

report to USAID, but can I find out? 

Mr. SCHNEIDMAN. I mean, each of the trade hubs has Web sites, 

each of the trade hubs do quarterly reports. 

Ms. BASS. I looked at the Web site. 

Mr. SCHNEIDMAN. Yeah, so——

Ms. BASS. I didn’t see much there. 

Mr. SCHNEIDMAN. I have not. 

Ms. BASS. Okay. 

Mr. SCHNEIDMAN. I would welcome a joint investigation. And I 

think we at Brookings could help you do that, a fuller assessment. 

Because I think it is essential to do as we move into this AGOA 

review period so we can make these recommendations to understand what is being done successfully and what needs to be done 

better. 

Ms. BASS. And I do know that USAID is looking at——

Mr. SCHNEIDMAN. Yes. 

Ms. BASS [continuing]. These trade hubs and what to do. Thank 

you. 

Mr. SCHNEIDMAN. But I think USAID needs to know that we are 

looking at them looking at that. 

Ms. BASS. Yes. Yes. We will make sure they know. 

Mr. SCHNEIDMAN. Thank you. 

Ms. BASS. Dr. Lande, you talked about Ex-Im and MCC special 

purpose vehicles, and I wanted to know if you could explain what 

you meant by that. 

You also talked about a potential sense of Congress. First of all, 

I appreciate you, you know, making the comparison with economic 

integration in Europe and talking about how long that took. I think 

that is really important, that we manage our own expectations. 

So could you elaborate on those two points? 

Mr. LANDE. I am happy to elaborate, but only within my knowledge more as a trade man. There are many people who really are 

experts on financing and so on. And I am thinking of Mr. Pittman 

as one name who is very active in this work. And I think we can 

get you a better answer than what I am going to give. 

But the basic way that I understand it is that the World Bank 

has funds, and you need to develop some kind of special purpose 

vehicle because you can’t count on sovereign guarantees if you are 

building a project whose profit depends on the operations in more 

than one country. So you develop these special purpose vehicles 

with the World Bank, perhaps with U.S. financial institutions and 

so on, and perhaps now with venture capital funds, as you know, 

sovereign wealth funds. 

So without going too much over my head, the only point I would 

make is that, very often, the restrictions on Export-Import Bank, 

MCC does not allow them to go into these new areas, because their 

50

emphasis is always, we want to have a 1-percent fail rate. We don’t 

want to go to Congress if we have a 3-percent fail rate. 

Ms. BASS. Right. Right. 

Mr. LANDE. But if you are going to be competitive in Africa, I 

think you very much have to mention that. 

With MCC, I think it is a decision that Congress has to make. 

Because people work within congressional guidelines; I mean, they 

just don’t decide. 

And I have two problems with our attitude toward MCC. One is 

there is a need for U.S. involvement in infrastructure development 

in Africa, which may not only be in ‘‘those very good countries who 

can qualify.’’

Ms. BASS. Right. 

Mr. LANDE. It is in the U.S. commercial interest, and it is in Africa’s interest. We should have a very active infrastructure program in Angola. I am not saying they are going to be MCC-eligible. 

So there has to be some thinking whether we want our whole infrastructure effort to be through MCC. 

And then when you focus on relieving poverty, you have this debate, should I spend money on these local rural roads, which are 

important, feeder roads that enable farmers to get their products 

to markets, or should I be focusing on these transcontinental developing corridors which really——

Ms. BASS. Uh-huh. 

Mr. LANDE. Again, MCC, they have poverty. I mean, there is 

nothing wrong with fighting poverty, let me be clear, but that 

should not be our only limitation. 

And, two, of course, is this national guidelines. So they don’t 

have an ability where a REC can come and say, hey, look at everything we have done. So maybe in drawing up and considering 

MCC, maybe you should say, okay, we will come up with some 

REC guidelines that will enable you to go across the border. So I 

would make that point. 

Ms. BASS. Another statement you made, in terms of us holding 

countries accountable to AGOA standards, good governance and all, 

I think you said that you thought that the RECs should be responsible as opposed to us holding individual governments. Did you say 

that? 

Mr. LANDE. Yes. And let me——

Ms. BASS. So, yeah, maybe you could give an example, especially 

considering how we have sanctioned some countries or pulled them 

out of AGOA. 

Mr. LANDE. Let me take a step back, because we discussed this 

the last time I appeared before your committee, and I think you 

asked me a question. And I am not sure; I think I was a little remiss, not getting back. 

The idea that every time there is a problem you should devise 

a sanction to deal with it and make that sanction a trade sanction 

has a problem. Because no one is going to get up, no U.S. company 

is going to get up and say, ‘‘I believe in conflict minerals,’’ ‘‘I believe 

in gender inequality.’’ I mean, it is not going to happen. 

So what we were thinking at Manchester Trade—and let me just 

put this idea out on the table, and I am going to get to the peer 

pressure in a moment—that the way you deal with sanctions, you 

51

come up with some guidelines, maybe out of this committee, and 

you say, first, you have to say what is the problem, okay? Secondly, 

what impact does the U.S. have in solving this problem alone? Is 

it effective? What is the collateral damage? What effect does it 

have on local groups, particularly women? 

If we took the sanction in Madagascar, I think Madagascar is returning to democracy now, but for 12 years women have been out 

of work. I mean, what have we accomplished? So we have to look 

at the collateral damage, both to U.S. competitiveness—if China 

keeps on working, keeps on trading, it doesn’t help anybody, except 

it harms U.S. workers who want to supply products there and so 

on, et cetera. 

So what we are basically suggesting is that one of the ingredients, in addition to the ones I mentioned, is let’s talk to our African 

partners. 

Africa has a way of punishing people who have what they call 

‘‘aberrant behavior’’—I think that is always a cute term, ‘‘aberrant 

behavior’’—where they say, ‘‘I am sorry, you can’t come to our next 

meeting. You can’t share in our next decisions we are making on 

our development programs. You are out.’’ They do not take economic sanctions, because their argument is that affects somebody 

who is working in the fields. I mean, that is not what we want to 

do. But they have their own program. So if they are willing to—

COMESA isn’t set up so much. SADC and ECOWAS has much 

more of a political thing, so they can be more effective. 

But I would say that if Congress works on good guidelines for 

these measures to be taken, and if we begin to talk to the regional 

communities and say yes—can you picture? We are going to designate all the COMESA members eligible. We want to do that. We 

want to have this inter-trade. ‘‘COMESA, these are our problems. 

Can you talk to your member states and see whether you can deal 

with them?’’ Let me just simply say that I think that that is so 

much more effective than the current, what I call the ‘‘feel good.’’

Do you know we took Niger off of AGOA? 

Ms. BASS. Right. 

Mr. LANDE. And then we put it back on? In the meantime, what 

was going on was probably worse, in terms of the government. We 

took the Congo off. I don’t think the Congo even knew they were 

off, but they did know when a U.S. businessman came in to do 

business that they were mad at us and so on. And we know the 

Madagascar example because I have stated that. You know, it has 

been going on forever, and at the end of the day, we will put them 

back on. 

So the only issue which I really say is that, given the responsibility of your committee, I think this could be one particular area 

that you might be able to work on very nicely. 

Ms. BASS. And maybe Dr. Sy and Quartey could respond to that, 

as well. 

So, you know, our approach right now, if a country has had a 

coup or whatever, we will pull them out of AGOA. How do you 

think it should be handled? Maybe both of you could respond quickly. 

Mr. SY. Well, I think it is a matter of basically who will bear the 

brunt of the sanctions. 

52

An alternative is, if you have the sanctions, to find a way to still 

address the needs of the most vulnerable segments of the society, 

so you could still have humanitarian aid targeted and have the 

sanctions at the same time. 

So there are a variety of ways to go. And I think it is a matter 

in any case of having in mind the cost, the burden on the most vulnerable segment of society. 

If I may, it is like subsidies. Right now, for example, there is a 

lot of push to remove subsidies in many countries on oil because 

they benefit mostly the rich. But that problem is then how to target the subsidies to the poorer segments. So the analogy is useful. 

Mr. QUARTEY. Yeah, I would want to add that when there is a 

coup, you know, you want to punish. Perhaps you use the regional 

economic communities to restore good governance. There could be 

peer pressure, which sometimes works better than trade sanctions, 

which might have serious implications on women and many other 

people. 

Thank you. 

Ms. BASS. Thank you. 

Thanks for making the copies available of the report. 

I yield. 

Mr. SMITH. Mr. Marino? 

Mr. MARINO. Thank you, Chairman. 

Good afternoon, gentlemen. Thank you for being here. 

I want to change the tone a little bit and change the direction 

in which we are traveling here. And I like what you had to say 

about what we need to do to increase a relationship with the continent of Africa, the countries within the continent. 

But I have some significant and severe concerns about Iran, 

China, and, to a lesser extent, Russia doing business on the continent of Africa. I don’t think anyone has touched on that yet, and 

I would like to hear some insight from you. 

I am going to just pose some factual information that I have 

been—China and the Middle East have always been a study of 

mine. I am not an expert, by any stretch of the imagination, but 

I am aware of, through my readings over the years, what takes 

place. 

So, for example, Iran is the second-largest oil producer in OPEC. 

Even though the continent has supplies of oil, it still needs the byproducts from oil, it needs refineries, and it still needs oil, to a certain extent. What does Iran get in return? Well, first of all, a trading partner with no sanctions. Iran gets uranium, and we all know 

what that issue sets in the future for us. They want ores from Africa, and Iran tries very hard and continues to build that relationship with the countries within the continent of Africa. 

China, on a larger scale. China invests billions and billions of 

dollars in Africa. The Chinese call Africa ‘‘the galloping lion.’’ They 

know what resources are available there. Chinese give Africa 

money, in addition to very, very soft and low-cost loans for billions 

of dollars. The Chinese Government builds refineries, the biggest 

investment in—I hope I am pronouncing this right—Bagamoyo, a 

big investment there. Chinese need, in return, food, energy, natural 

resources, and even negotiate for some fishing rights. They build 

hospitals. They build schools. China is the largest investor in South 

53

Sudan by far, using billions of U.S. dollars—not using the yuan, 

using U.S. dollars. 

Now, Africa has 40 percent of the global reserves of natural resources—40 percent—60 percent of unused farm land, and a plethora of low-wage workers. China is building three oil refineries in 

Nigeria, and China will cover 80 percent of the cost of those. 

There is a great deal of corruption that is taking place. There are 

even investigations and accusations about high-ranking officials in 

Africa taking millions of dollars from China. 

So my simple question is based on these facts. And if you want 

me to cite, I will later on, if you request where I get these facts. 

What do we do about China and Iran? How do we persuade the 

countries within the continent of Africa to do business with us 

when, pretty much because of regulations internationally and that 

we have, our hands are tied and China walks in with virtually no 

debt, tons of money, and helps a continent that is so poverty-stricken, for the most part, at virtually no cost to those countries? How 

do you defeat that? 

And, gentlemen, if anyone is willing to make a statement on my 

little dissertation here, jump in. 

Mr. SY. So, if I may, maybe I can look at this question through 

the angle of how regional economic communities can also help. 

But through our conversations with many businessmen—and we 

just had the CEO of the U.S. Chamber of Commerce on Africa just 

yesterday—it seems that the biggest advantage that China has 

over the U.S. is speed, that the Chinese companies and the Chinese 

Government can deliver very quickly what Africa is asking right 

now. And sometimes it can have long-term costs. 

Mr. MARINO. Of course, because China doesn’t care about its environment. 

Mr. SY. Yes. For example, so if you are a minister right now and 

your country is facing severe power outages and you know that 

elections are coming up and you have people in the street, well, the 

cheapest and the quickest way to have a power plant is to use coal, 

and the Chinese can do that very quickly. 

Mr. MARINO. Yeah. 

Mr. SY. If you were to deal with a U.S. company, it will take you 

a much longer time and it is a more complicated process. So that 

is one advantage, I think, that other countries have to keep in 

mind when they look at China in Africa: Speed. How do you really 

compete with the speed that China has? 

But this said, coming to how regional economic communities can 

help, in the area of governance, integration again creates some 

common institutions that can help improve economic governance. 

They have convergence criteria, they have fiscal targets, and they 

have peer political governance, they have these peer reviews and 

so on. So one way would be really to strengthen these common regional institutions to really put basically the pressure on the countries to really have in mind the benefits of their citizens and go exactly like the EU and so on. 

The other one is, also, you are having lots of countries discovering oil, oil discoveries are increasing, but also regional infrastructure. And maybe that is one way also to approach the problem of 

China, is to think about regional infrastructure rather than these 

54

bilateral projects. They are needed. Like, if you are South Sudan, 

you need pipelines to sell your oil, and the pipelines go through 

Sudan, or there is a project to go through Kenya. So, again, this 

regional infrastructure, that is one way to see the problem and address the problems. 

Mr. MARINO. Okay. My time is limited, and I just wanted to see 

if anyone else wanted to respond. 

So, please, go ahead. 

Mr. SCHNEIDMAN. Let me respond, if I can, on the Chinese side. 

You know, let me start with your last question: ‘‘What can we do 

to get U.S. business there?’’ I mean, the reality is that the U.S. 

doesn’t show up to do business in Africa, which has created a vacuum. And that is problem number one. 

But if you went to any African Government and said, who would 

you rather do business with, there is no question they would rather 

do business with a U.S. company. Why? Number one, we are going 

to hire local people, we are going to train local people, we are going 

to create jobs, we are going to invest in communities, we are going 

to have clear, transparent deals. And that is the big difference. 

So I think, you know, from my point of view, the big problem 

with China is not so much, you know, their presence; it is the nature of their presence. Chinese come, they bring their own workers, 

they don’t train anybody, they stick to themselves. And that is a 

problem. 

Mr. MARINO. Point well-taken. 

We have 7 minutes to get over there and vote, and if you can be 

very brief, sir. 

Mr. LANDE. Very quickly, the U.S. has many advantages, in 

terms of working, and I won’t go beyond that: The school, the reputation, U.S. goods mean a lot, and so on. We don’t have the problems. 

However, having said that, your question is absolutely the correct one. But the answer isn’t to say only what should China do. 

I think it behooves the Congress to sit down and to say, why do 

we take so long to approve our Export-Import Bank? 

I remember a discussion about a year ago before the rechartering 

of the bank. And they have Mr. Angevine, they have a very dedicated person. And working in Africa, working in Africa exporting, 

he quadrupled their loan—beautiful job. But during our discussion, 

we said, can you create some special facilities? ‘‘Oh, no, we can’t 

change the charter. Oh, no, the charter is in place. God forbid we 

touch it.’’ And, in fact, you know, a lot of people think Export-Import Bank is a form of corporate welfare. 

So what I am saying to you and my response is—and I would 

love to have more time to discuss with you and so on—I can go 

through seven different things the U.S. can do if Congress would 

give more flexibility to the agencies, risking perhaps some problems, but will better enable us to compete against China. 

But our real answer is exactly what was just said by Witney, and 

that is we have to be what we are, high-quality people. But there 

are things—and I am sure the responsibility is with Congress, as 

well as with other people. 

Thank you. 

Mr. MARINO. I couldn’t agree with you more. 

55

Mr. QUARTEY. Thank you very much. Let me try to be very quick. 

I think we have two issues here, an issue of speed versus ensuring good economic and political governance. China comes with the 

speed in delivery, but on issues about governance, environment, et 

cetera, it is challenged. 

What we need to do is to strike a good balance by ensuring that 

the USA and the other OECD countries, bring China to the negotiation table. There has been some initiatives to bring China to the 

negotiation table and ensure that some of these issues are streamlined, and I hope we pursue that line of action. 

Thank you. 

Mr. MARINO. Chairman, thank you. I wish we could continue 

this. We could be here for several hours on that issue. 

Mr. SMITH. Thank you, Mr. Marino. 

Let me just conclude. I do have one final question, and perhaps 

we will run out of time. But, you know, in monitoring the AGOA, 

it has become clear that national labor protection systems are often 

weak or nonexistent. And I am wondering how you might recommend that the regional economic communities address the need 

to establish and enforce standards to protect the rights and health 

of workers. 

I would note parenthetically that a couple years ago I was part 

of an effort to cite China and its unfair trading practice in terms 

of the exploitation of its labor force, and the USTR never took it 

up. We have been trying to get them to take something up ever 

since. But when they pay 10 to 50 cents per hour, there are no 

OSHA regulations, 130,000 people-plus die every year on the job in 

China—all these egregious practices are engaged in, employed by 

so many factories in China. And with China’s ascendancy economically in Africa, those bad practices, just like bad governance practices, the use of secret police and the like, could easily, you know, 

for a dictatorship, become very attractive. 

But how do we make sure that as this regional cooperation effort 

gets further under way that these ILO-type standards, OSHA-type 

standards, they don’t have to be exactly like the U.S. or whatever, 

but something that really protects people on the job, health and 

safety? It is something I think we should build into it. We do to 

some extent, but I am wondering what your thoughts might be on 

that. 

Mr. SCHNEIDMAN. Mr. Chairman, I agree completely. I think this 

really has to be part of our bilateral dialogue with AGOA beneficiary governments. And I think it has to be part of our Embassy 

going out and monitoring what is happening in these factories. 

I would like to think that there are some resources to invest in 

training and showing examples, helping business leaders from the 

region come to the U.S., perhaps, and see what good standards are 

all about and how they can be replicated at home. 

And I think we have to take a proactive approach to this and not 

see it as punitive, but see it as something that is going to enhance 

productivity. 

Mr. SMITH. I appreciate that. 

And I also would include, because it would come under the rubric 

of health, but environmental standards. I mean, I remember in 

New Jersey when—you know, I grew up right near Woodbridge, in 

56

Woodbridge, Iselin—I woke up with Chevron smoke in my house, 

and that effluent, that smell. We didn’t know what clean air was. 

And we hate to see that replicated, because we know what it 

does in terms of health, and not just the workers. My father-in-law 

worked in DuPont and died of leukemia. He was around resins. 

You know, so there are huge downsides health-wise, that if you get 

the environmental piece right, as more factories build up, it could 

be an enormous positive for the Africans. 

Yes? 

Mr. LANDE. Three very quick points—well, one quick comment. 

I don’t know if Woodbridge is near Exit 9 on the New Jersey Turnpike, but——

Mr. SMITH. Exit 11. 

Mr. LANDE. Thank you. My wife knows it very well, and she puts 

a mask on when she goes there. 

But, seriously, one, the whole idea of moving away from unilateral sanctions—because that is what is in our bill now—and working with the regional economic communities, working on the ILO 

standards, fortunately Africa has not had the problems that we 

have seen in Bangladesh, has not the had the problems we have 

seen in China. A lot has to do with the fact, particularly in the 

former British colonies, that there is a lot already in place. 

So my view is, if you work with them, if U.S. unions would be 

willing to participate, as they have particularly in Latin America, 

to develop these standards and so on, I think it works. But it does 

not work if it is done, excuse me, punitively. ‘‘We are going to save 

the worker by taking away his job.’’ Well, that doesn’t work. Obviously, you have to be cleverer than that. 

So that is kind of my very short comment, that you should look 

at modifying the conditions but really work with them in the context. And this could be a perfectly good job for the trade hubs. The 

administration has already committed to involve Commerce in 

trade hubs. It is already in their position. Let’s get Labor involved, 

too. 

Thank you, sir. 

Mr. SMITH. Thank you. 

Mr. SY. Well, I would just maybe broaden the debate and say 

that this is also one important element of good corporate governance practices. And in Africa also, if you are a business, it is very 

difficult to avoid a government as a customer, as a partner. So the 

issue of corporate governance and public governance together is 

something that should be pursued, because at the end of the day 

it is good business and it is good for everybody. 

Mr. SMITH. Thank you. 

Dr. Quartey? 

Mr. QUARTEY. Just a quick one. I would want to add that we 

need to harmonize labor standards and laws within the regional 

economic communities. That will ensure that some of these unfair 

practices are minimized. 

Thank you. 

Mr. SMITH. Thank you. 

We are out of time because there is a vote on the floor and we 

are down to 30 seconds or so, I am told. So I thank you so much 

for your testimony, for your insights. 

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And please, you know, pick up the phone, send us an email if 

there is something that you think we should be doing. You have 

made excellent recommendations, and we will act upon them. 

Thank you so much. The hearing is adjourned. 

[Whereupon, at 3:46 p.m., the subcommittee was adjourned.] 

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