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THE AFRICAN GROWTH AND OPPORTUNITY ACT:

ENSURING SUCCESS

JOINT HEARING

BEFORE THE

SUBCOMMITTEE ON TERRORISM, 

NONPROLIFERATION, AND TRADE

AND THE

SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH, 

AND HUMAN RIGHTS

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

JUNE 20, 2012

Serial No. 112–159

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 

ILEANA ROS-LEHTINEN, Florida, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

DANA ROHRABACHER, California 

DONALD A. MANZULLO, Illinois 

EDWARD R. ROYCE, California 

STEVE CHABOT, Ohio 

RON PAUL, Texas 

MIKE PENCE, Indiana 

JOE WILSON, South Carolina 

CONNIE MACK, Florida 

JEFF FORTENBERRY, Nebraska 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

GUS M. BILIRAKIS, Florida 

JEAN SCHMIDT, Ohio 

BILL JOHNSON, Ohio 

DAVID RIVERA, Florida 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ANN MARIE BUERKLE, New York 

RENEE ELLMERS, North Carolina 

ROBERT TURNER, New York 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

ELIOT L. ENGEL, New York 

GREGORY W. MEEKS, New York 

RUSS CARNAHAN, Missouri 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

DENNIS CARDOZA, California 

BEN CHANDLER, Kentucky 

BRIAN HIGGINS, New York 

ALLYSON SCHWARTZ, Pennsylvania 

CHRISTOPHER S. MURPHY, Connecticut 

FREDERICA WILSON, Florida 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

YLEEM D.S. POBLETE, Staff Director 

RICHARD J. KESSLER, Democratic Staff Director 

(III)

SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE

EDWARD R. ROYCE, California, Chairman 

TED POE, Texas 

JEFF DUNCAN, South Carolina 

BILL JOHNSON, Ohio 

TIM GRIFFIN, Arkansas 

ANN MARIE BUERKLE, New York 

RENEE ELLMERS, North Carolina 

BRAD SHERMAN, California 

DAVID CICILLINE, Rhode Island 

GERALD E. CONNOLLY, Virginia 

ALLYSON SCHWARTZ, Pennsylvania 

SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH, AND HUMAN RIGHTS

CHRISTOPHER H. SMITH, New Jersey, Chairman 

JEFF FORTENBERRY, Nebraska 

TOM MARINO, Pennsylvania 

ANN MARIE BUERKLE, New York 

ROBERT TURNER, New York 

KAREN BASS, California 

RUSS CARNAHAN, Missouri 

THEODORE E. DEUTCH, Florida 

(V)

C O N T E N T S 

Page

WITNESSES 

Mr. Anthony Carroll, vice president, Manchester Trade, Ltd. ............................. 10

Mr. Paul Ryberg, president, African Coalition for Trade ..................................... 16

Mr. Jaswinder Bedi, chairman, African Cotton and Textile Industries Federation ........................................................................................................................ 21

Mr. Stephen Hayes, president and chief executive officer, The Corporate 

Council on Africa (CCA) ...................................................................................... 26

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Edward R. Royce, a Representative in Congress from the 

State of California, and chairman, Subcommittee on Terrorism, Nonproliferation, and Trade: Prepared statement ................................................... 3

The Honorable Christopher H. Smith, a Representative in Congress from 

the State of New Jersey, and chairman, Subcommittee on Africa, Global 

Health, and Human Rights: Prepared statement .............................................. 7

Mr. Anthony Carroll: Prepared statement ............................................................ 12

Mr. Paul Ryberg: Prepared statement ................................................................... 18

Mr. Jaswinder Bedi: Prepared statement .............................................................. 23

Mr. Stephen Hayes: Prepared statement .............................................................. 27

APPENDIX 

Hearing notice .......................................................................................................... 40

Hearing minutes ...................................................................................................... 41

The Honorable Gerald E. Connolly, a Representative in Congress from the 

Commonwealth of Virginia: Prepared statement .............................................. 43

The Honorable Theodore E. Deutch, a Representative in Congress from the 

State of Florida: Prepared statement ................................................................. 45

(1)

THE AFRICAN GROWTH AND OPPORTUNITY 

ACT: ENSURING SUCCESS 

WEDNESDAY, JUNE 20, 2012

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE AND

SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH, AND HUMAN RIGHTS, COMMITTEE ON FOREIGN AFFAIRS, Washington, DC. 

The subcommittees met, pursuant to notice, at 2:35 p.m., in room 

2172, Rayburn House Office Building, Hon. Edward R. Royce 

(chairman of the Subcommittee on Terrorism, Nonproliferation, 

and Trade) presiding. 

Mr. ROYCE. This joint hearing of the Subcommittee on Terrorism, 

Nonproliferation, and Trade, as well as Africa, Global Health, and 

Human Rights will come to order. I want to thank Chairman 

Smith, Ranking Member Bass, and the staff of the Africa Subcommittee, as well as the Terrorism, Nonproliferation, and Trade 

Subcommittee for their good work on this hearing. 

And of course, Karen Bass really urged that we hold this hearing 

today. I think it is a timely hearing, given the intent, I think, in 

the Senate to move forward with this legislation in ensuing weeks. 

Today we are examining the African Growth and Opportunity 

Act. It was signed into law in 2000. This landmark legislation 

ended years of U.S. Government indifference to Africa’s considerable commercial potential, and I am proud to have been part of the 

AGOA coalition with Jim McDermott and Charlie Rangel and some 

of our other colleagues on this. We were bipartisan. We did work 

very hard at it, and I think we beat the odds to get the job done. 

AGOA has brought major benefits to a number of African countries. Hundreds of thousands of Africans, many of them women, 

have been employed because of this Act. I have had the opportunity 

to visit apparel factories in many different countries in Africa. I 

have seen AGOA’s contribution to fighting poverty in these countries. Unfortunately Africa’s emergent apparel industry is imperiled by the impending expiration of a key AGOA provision dealing 

with the ability to use non-African manufactured fabric. If we do 

not extend this provision, hundreds of thousands of African apparel 

jobs will be shifted to Asia. Many already have because of this uncertainty. Africans are losing jobs, and we are losing the diplomatic 

goodwill won with AGOA. 

Ideally, more countries and more African industries would have 

taken advantage of AGOA by now, but we shouldn’t lose sight of 

2

the fact that the number of countries exporting non-energy products has increased from 13 to 22 on the subcontinent in the last 

decade. And when AGOA was passed, Africa was arguably irrelevant to the global economy. 

Africa still has a long road ahead, but a great deal of progress 

has been made because of many of the provisions in AGOA. But 

one particular provision, if we don’t extend it, is going to be very 

injurious. One way to accelerate that progress and help our deficit, 

of course, if I can go off on a tangent for a minute, is eliminating 

our agricultural subsidies, which I wish we would phase out for the 

benefit of fairness, the benefit of sound economic policy, and certainly for the benefit of Africa. 

This committee wrote AGOA’s eligibility criteria. The U.S. extends duty and quota-free access with AGOA countries and expects 

certain minimum commitments in return. One witness will tell us 

that these standards which go to the basis of setting up independent judiciary, and the rule of law, these standards compelled 

most African countries to ‘‘embrace the rule of law, allow for political pluralism, respect democracy, and basic human rights.’’ And 

that is not bad. 

We didn’t pass AGOA for Africans only. The U.S. is better off if 

Africa is moving away from mass poverty. AGOA can be better utilized, which we will hear about, but we are sure better off with it 

in place. When AGOA was written, the U.S. Government was completely ignoring African commerce. AGOA has changed that, 

though I was struck by reading the other day that no Commerce 

Secretary has visited sub-Saharan Africa since 2002. Nothing in 10 

years. And that is not the spirit of AGOA. And that is something 

we seek to rectify here. 

Before turning to Ranking Member Sherman for an opening 

statement, I will inform members that we are also joined by a few 

non-committee members who were critical to AGOA, especially 

Representative Jim McDermott, who got the original ball rolling 

and had the concept for the first AGOA legislation. 

I will turn now to our ranking member. 

[The prepared statement of Mr. Royce follows:]

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Mr. SHERMAN. Not wishing to cause a heart attack or other problem with my chairman, I will give you fair warning. I am going to 

skip my opening statement here, and yield to my good friend, 

Karen Bass. I am anxious to hear the witnesses, and this one time 

I didn’t use the 7- or 8- or 10-minute opening statement. I yield 

back. 

Mr. ROYCE. I thank our ranking member, Mr. Sherman, and we 

will now go to Ranking Member Bass. 

Ms. BASS. First of all, thank you very much, Chairman Royce, 

Chairman Smith, and Ranking Member Sherman. And this will be 

an unusual occasion, because I am actually going to yield my comments in just 1 minute. But I want to thank all of you; in particular, the cooperation with Member Sherman’s staff, and also 

Member Royce’s staff for the opportunity to hold this joint hearing 

on AGOA. And with that in mind, I would like to defer my opening 

comments to one of the original authors and leaders on AGOA, 

Congress Member Jim McDermott. 

Mr. MCDERMOTT. Thank you, Ranking Member Bass, and thank 

you Chairman Royce, and Chairman Smith, and Ranking Member 

Sherman. I, being allowed to say a few words with them giving up 

their time, is a unique experience on the House of Representatives. 

Watch it. You are watching history being made. 

I would especially thank Congresswoman Bass who pushed for 

this hearing, because the timing couldn’t be better. A central part 

of AGOA, the so-called third-party fabric provision, expires in less 

than 3 months. And some of you may have heard that they may 

be making progress over in the Senate. We have heard the drums, 

and the chairman tells me that he went over and talked to the 

drummer, and it sounds like something is actually going to happen 

over there. So we are very excited about that welcome news. 

There is no reason we should be in this position, actually. I have 

been talking to my chairman about this over on our committee. We 

offered this legislation a year ago. In December the Senate was on 

board when they identified the same language in their bill—Senator Baucus and Senator Hatch—but it has been sitting there 

since. 

Now, there are two important points here. One, the extension is 

good for business. It is good for the American economy. It is good 

for Africa. It is good for foreign policy. It is good security policy, 

and it has been hung up for a year, and with really no substantive 

reason. The delay has always been about process and politics; no 

trust between the House and Senate. And on tax bills, and if we 

send a tax bill, will we get one back, or what will happen? 

When we passed AGOA, it was a partnership between many 

members, as Ed said, one or more of the most amazing partnerships between myself, and then-Speaker Gingrich. We all worked 

together to compromise and get a good thing done. 

Now, whether you are new to Congress or been here a while, the 

current era, where commonsense things don’t get done because of 

lack of trust, or for someone looking for an issue to turn into a bargaining chip or something, well, it has poisoned the well. It has 

poisoned the international well and it hurts our own public. In this 

case, nothing has been gained, but jobs have been lost. 

5

When we had the hearing late—this late in the game, it tells us 

good and bad things. One, it is sad it had to happen now, but good 

that members have found the good sense to push it forward. And 

I hope that this hearing gives the Senate the encouragement to do 

what is needed. That is one point. 

But the second point is that a delay in trade legislation hurts everyone: Workers, businesses, American security, foreign governments we need to work with. We cannot keep letting our trade arrangements and provisions expire. Orders—I am a doctor, all right? 

I am not a retailer. But I learned from retailers very early on that 

when you are doing things like clothing buying, you are doing it 

at least 9 months in advance, and planning for a building is done 

3 years in advance. 

When we didn’t get AGOA 3rd country fabric renewed within 9 

months of expiration, orders from African factories have actually 

started to drop. We are now 3 months away, and orders have 

dropped by 35 percent. Orders equal jobs. If somebody in New 

York, Jones of New York or somebody, wants to buy something, 

they have to know the price that they are going to get it from in 

Africa in order to make a bid. And this means we have lost jobs 

in Kenya, and Lesotho, and a number of other countries, mostly 

women who are usually the primary bread winners in their families. So there is a huge multiplier effect to these job losses. 

It isn’t just about money. It is also about the economic development of these countries and the infrastructure. As women have 

jobs, they teach their kids; they get education; they teach their children. That helps the next generation. 

The whole AGOA program expires in 3 years. And I hope, Ed, 

that we can put that in on the first day of the next session and 

get it passed right then. AGOA was meant to grow industries, but 

from the perspective of investors, AGOA is expiring right now. 

Every day from now on that renewal is not done, businesses lose, 

jobs lose, both in Africa and in the United States. 

Twelve years ago we got the ball rolling. We had nothing up 

until then. And AGOA and other initiatives got us in the game in 

Africa. There were 800 million people and the United States had 

no policy toward trade in Africa. And we started building commerce, building the 21st century relationships, but the Chinese and 

the Europeans have charged ahead of us recently and they are 

much more agile and nimble than we are. 

Today we are going to hear about AGOA and textiles from the 

panelists, and legislatively we finally are about to take action. I 

hope that we can use today to reset the clock a little, to help us 

get to work on a new job, job creating, mutually beneficial AGOA 

agreement done in 2013, and not the last minute in 2015. 

I want to thank the Foreign Affairs Committee for their energy 

and for their leadership on this issue, and I am deeply appreciative 

of your allowing me to come and talk here. 

I am going to leave because the Ways and Means Committee is 

right now dealing with should we extend NPTR to the Soviet 

Union, to Russia. And so we are trying to decide if we will improve 

our relationships with the Russians. So I am going to take your 

leave, but thank you. 

Mr. ROYCE. Thank you, Mr. McDermott. 

6

Now we will go to Chairman Smith of the Africa, Global Health, 

and Human Rights Subcommittee. 

Mr. SMITH. I thank my good friend for yielding and thank you 

for calling this extremely important hearing. I think all of us would 

agree to that and I would ask unanimous consent that my opening 

statement be made a part of the record. 

I think Mr. McDermott really summed up all of our sentiments 

here on the panel, which I am sure will be echoed by our distinguished witnesses. This has to be done immediately. Delay is denial, especially for those who lost orders that are occurring every 

single day. We have heard it from the African ambassadors, and 

heard it from the businessmen and women. A drop-dead date is 

just that. Not so here, as my good friend and colleague from Washington State so clearly stated. So I do hope that we can get this 

done immediately. 

I will, Mr. Chairman, just note for the record, that I just got back 

from Bolivia. I was visiting a prison there on behalf of a man who 

has been unjustly imprisoned. I picked up a little bit of a fever, so 

I am going to take my leave, because I am feeling awful, but I 

thank you again for calling this hearing. 

Mr. ROYCE. I thank you very much, Chairman Smith, and thank 

you also for your leadership on not only this issue but human 

rights issues around the globe, including in Bolivia. We wish you 

a speedy recovery. 

[The prepared statement of Mr. Smith follows:]

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Mr. ROYCE. There are several ambassadors that I see in the audience that we want to recognize from sub-Saharan Africa. Ambassador Andjaba from Namibia is with us, if I can ask him to stand. 

We appreciate that. From Mauritius, Ambassador Soborun. Thank 

you very much, Ambassador. And from South Africa, Miss 

Cheryllyn Dudley is here from the South African Parliament. 

If I could ask you—thank you any other ambassadors—I will just 

ask you to stand if I missed anyone. Thank you. I will also mention 

that the administration has a role to play in working with the Senate to help build trust. And as mentioned, I was over on the Senate 

side talking to Senators this afternoon about AGOA. We are all 

making phone calls, and Representative Bass has talked to a number of Senators as well. We would like the administration to pick 

up the phone and be engaged as well as we move forward with this 

legislation. 

I have a couple of witnesses to introduce at this time. And let 

me begin by—Mr. Deutch, would you like to make an opening 

statement? 

Mr. DEUTCH. Thank you, Mr. Chairman, and I have an opening 

statement, if—that I could submit into the record, Mr. Chairman, 

and I would like to move on to our panel. 

Mr. ROYCE. Very good. Thank you, Mr. Deutch. 

Let me start with Tony Carroll. He is an international lawyer, 

and development expert who has been working on African issues 

since his service as a Peace Corps volunteer 35 years ago in Botswana. He was among the first to advocate for passage of AGOA 

before the Africa Subcommittee, and he serves as the vice president 

of Manchester Trade and is an adjunct professor at Johns Hopkins 

University School of Advanced International Studies. 

Paul Ryberg is the president of the African Coalition for Trade, 

a member-supported nonprofit whose members come from the African private sector. ACT, as it is called, has been a leader on behalf 

of the African private sector in conjunction with the development, 

implementation, and amendment of AGOA. He has worked closely 

with several African governments as they have worked to become 

AGOA eligible. 

Jas Bedi is the chairman of the African Cotton and Textile Industries Federation. This regional trade body was formed in June 

2005 by the cotton, textile, and apparel sectors from across sub-Saharan Africa, to create a unified and recognized voice in both regional and global trade affairs. 

And Stephen Hayes, President and CEO of the Corporate Council 

on Africa for 12 years. The Council is an organization of 200 U.S. 

companies that represent 85 percent of U.S. private investment in 

Africa. Recognizing his work at the Council, the Department of 

Commerce presented him with the Ron Brown Award for International Leadership in 2008. 

All of the witnesses’ complete written testimony is going to be entered into the record, so I will remind each witness to keep their 

oral presentation to 5 minutes. 

And we will start with Mr. Tony Carroll. 

10

STATEMENT OF MR. ANTHONY CARROLL, VICE PRESIDENT, 

MANCHESTER TRADE, LTD. 

Mr. CARROLL. Mr. Chairman, thank you for affording me this 

honor to testify once again on U.S.-Africa economic relations. With 

your permission, I have submitted a more detailed written statement for the record. You and your colleague—late colleague—Don 

Payne provided bipartisan leadership essential to the passage of 

AGOA and its subsequent amendments. AGOA, PEPFAR and MCC 

have created unprecedented and diplomatic traction and popular 

goodwill for the U.S. and Africa. 

Thirty-six years ago I stepped off a DC–3 onto a dusty airfield 

in Gaborone, Botswana as a newly minted Peace Corps volunteer. 

In the subsequent years I saw Africa endure a generation of conflict, economic marginalization, and brain drain. However, Africa is 

now on the move, enjoying unprecedented economic growth and political stability. 

A contributing factor to this transformation has been AGOA. 

First, the legislation has had the intended consequence of rebooting 

economic development to a demand-driven formula. The reboot has 

produced a winning relationship, as witnessed by the fivefold increase in U.S. imports from Africa, and threefold increase in U.S. 

exports into the continent. However, the full measure of AGOA’s 

success may be in its fostering trade facilitation measures, foreign 

direct investment, enterprise development, and business deregulation. 

Africa’s new competitiveness and AGOA’s impact can be also 

measured by the continent’s booming trade with Asia and the Middle East, and the fact that both foreign direct investment and 

money remittances now exceed development assistance flows. 

This export-led growth and FDI has created a burgeoning middle 

class. According to many estimates, Africa will see 120 million people rise from poverty to the middle class by the end of the decade. 

This new middle class will be a market for U.S. goods and services. 

History has shown that countries with growing economies tend to 

prefer trade to war in its economic relationships with neighboring 

states, and Africa is no exception. In a recent study cited in Foreign Affairs Magazine, Professor Stephen Straus, University of 

Wisconsin, has documented a 50 percent decrease in African conflict over the past decade. Moreover, hope is our best defense 

against terrorism rooted in economic and social despair. 

Today I join my friends and colleagues, Jas Bedi and Paul 

Ryberg, calling for the renewal of AGOA’s third-country fabric provisions. Although I have worked extensively in Africa’s textile industry I will leave it to them expound upon the deleterious impact 

on the African apparel industry that nonrenewal will cause. There 

is a very real chance that non-extension will not only cause loss of 

jobs and closure of factories, but also may impede Africa’s ability 

to expand its manufacturing base beyond apparel and textiles as 

the infrastructure investments and skill development in this industry enure to the benefit of others. 

I would like to underscore that failure to extend third-country 

fabric will be a disaster for U.S. interests in Africa and deflate 

what has been a resurgence in our commercial and diplomatic engagement with the continent. 

11

I have also been asked to offer some observations on AGOA, how 

it can be improved to prevent this type of brinkmanship, and have 

detailed those in my submitted statement. 

As we know, the next Congress will have to extend the life of 

AGOA beyond 2015. It is my position that AGOA should be extended in its essentially unilateral preference format for another 

decade. This unilateral extension will permit the continuation of regional integration initiatives now fully underway in Africa’s 48 subSaharan African countries and led by its regional economic communities and the African Union. Regional integration will foster infrastructure investment, expand the flow of cross-border inputs and 

expand market size to the U.S.—benefit of U.S. exporters. I applaud the administration’s recent policy statement endorsing such 

extension and ask this body and the administration to pressure the 

European Union to shelve its efforts to foist Economic Partnership 

Agreements upon Africa’s more developed economies, thereby retarding these promising experts at economic integration. 

Additionally, China’s extension of market preferences to Africa 

has also the unintended consequence of driving a wedge between 

more and lesser developed African economies. Apart from the issue 

of unilateral extension, I would like to add two final recommendations on how AGOA can be improved. An enhanced AGOA can contribute to a diversification of agricultural exports to the U.S. For 

example, either through a legislative mandate or administrative 

decisions, AGOA exports could be exempt from tariff rate quotas 

which are denying access to the U.S. for a number of agricultural 

products, which Africa has a competitive advantage. 

This exemption could be designed in a way that it does not have 

a significant impact on domestic production. Instead, it would shift 

imports from more developed suppliers to poorer African countries. 

Last, as I have testified before this panel during AGOA’s initial 

debates, I remain steadfastly opposed to the manner in which 

AGOA country eligibility is enforced. While there certainly should 

be punitive measures for mostly male leaders who foment war with 

neighbors, facilitate coups d’etat or restrict economic rights or individual freedoms, closing factories and casting thousands, mostly 

women, into unemployment is not the way to go. Unless the beneficial ownership of such factories is tied to such culprits, I believe 

that sanctions targeting country leaders are more effective tools to 

mete out punishment rather than punishing innocent businesses 

and their employees. Thank you. 

Mr. ROYCE. Thank you, Mr. Carroll. 

[The prepared statement of Mr. Carroll follows:]

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Mr. ROYCE. Mr. Ryberg. 

STATEMENT OF MR. PAUL RYBERG, PRESIDENT, AFRICAN 

COALITION FOR TRADE 

Mr. RYBERG. Thank you, Chairman Royce, Ranking Members 

Sherman and Bass, and members of the subcommittees. I want to 

thank you for holding this hearing today on this important and extremely time-sensitive subject. I am going to focus my remarks on 

the need to renew the AGOA third-country fabric provision. 

I am appearing before the subcommittees today in my capacity 

as President of the African Coalition for Trade, or ACT, which is 

a nonprofit association of African private sector groups and individual companies trading with the United States under AGOA. 

Most of our members are engaged in manufacturing apparel for export to the United States. 

Increased apparel trade has been the greatest success story of 

AGOA. During its first 5 years in effect, apparel exports from Africa almost tripled, and more than 300,000 new direct jobs were created in the apparel sector in Africa. 

On top of that, more than twice that many indirect jobs were created to provide support services to this new, vibrant, African apparel industry. 

This success was challenged and almost destroyed by the expiration of the multifiber arrangement in 2005 which exposed this infant African apparel industry to unfettered competition from Asian 

superproducers, many of whom were heavily state-subsidized. During the next 5 years, 2005 to 2010, AGOA apparel exports fell by 

56 percent. 

The good news is that beginning last year, there was a comeback, 

and U.S. apparel imports from Africa under AGOA grew by 15 percent in 2011. 

Unfortunately, this recovery has been nipped in the bud by Congress’ inability to renew the AGOA third-country fabric rule of origin, which accounts for more than 95 percent of the AGOA apparel 

trade. This key provision of AGOA, as has been noted, is scheduled 

to expire on September 30 of this year. Although identical bills 

have been introduced to renew the third-country fabric provision in 

both the House and the Senate, Congress has so far been unable 

to move either bill forward, and Africa is now paying the price for 

Congress’ inaction. 

During May and June so far this year, apparel exports from Africa were down by 27 percent from the same period last year. And 

our members in Africa report that new orders received from U.S. 

buyers are running 35 percent behind where they were at this time 

last year. And the decline is accelerating with every single day. 

As orders are lost, layoffs must follow. Already this year, 3,300 

jobs have been lost in Lesotho alone. In Kenya, another 2,000 

workers have lost their jobs. And if the third-country fabric provision is not renewed immediately, there is a serious risk of a complete collapse of the Africa apparel industry, costing literally hundreds of thousands of jobs. Ironically, renewal of the AGOA thirdcountry fabric provision is not controversial and enjoys wide bipartisan support in both Chambers of Congress. 

17

In the past, the AGOA third-country fabric provision has been renewed twice, both times by unanimous consent, and well in advance of its expiration. This time, however, renewal of the AGOA 

third-country fabric provision has become the victim of inter-party 

and inter-chamber gridlock, despite the fact that renewal has been 

endorsed by everyone in Congress and by the Obama administration. 

At the 2012 AGOA Forum which was held here in Washington 

last week, no topic was discussed more frequently or with more urgency than the need for immediate renewal of the third-country 

fabric provision. As one African trade minister put it at the forum 

last week:

‘‘We came to Washington with great optimism that we would 

return with good news that the third-country fabric provision 

has been renewed. But we are returning home with empty 

hands. What are we to tell our people whose jobs are being lost 

every day?’’

Another African trade minister in the same session said that 

Congress’ delay in renewing the third-country fabric provision is 

undermining the credibility of the U.S./Africa partnership. These 

are very sobering words. Congress can be proud of its accomplishment in creating an apparel industry in Africa, creating more than 

300,000 jobs and providing a livelihood for over 1 million people. 

But sadly, Congress’ inaction today threatens to destroy what has 

been created over the past 12 years. Thank you. 

[The prepared statement of Mr. Ryberg follows:]

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Mr. ROYCE. Mr. Bedi. 

STATEMENT OF MR. JASWINDER BEDI, CHAIRMAN, AFRICAN 

COTTON AND TEXTILE INDUSTRIES FEDERATION 

Mr. BEDI. Thank you, Chairman Royce, and in essence of time, 

all protocols observed. The African Growth and Opportunity Act enacted in the year 2000 was probably the most liberal trade preference program the United States has given any country or region 

which has indeed had a positive impact to sub-Sahara Africa, creating numerous new jobs, almost 300,000 and positively impacted 

the livelihood of especially women who became bread winners with 

a second income in many households. 

The eligibility criteria for AGOA compelled most African countries to embrace the rule of law, allow for political pluralism, respect democracy, and basic human rights. AGOA certainly met expectations whereby bilateral trade between the U.S. and sub-Sahara Africa grew, benefiting for the United States and Africa. 

The third-country fabric provision benefited AGOA countries, as 

the continent was unable to offer competitive production in comparison to Asia, in respect to quantity, quality, and price, compromising the competitive advantage from sub-Sahara Africa. This 

provision allowed sub-Sahara Africa, to compete effectively and 

help the U.S. consumers with competitive pricing of apparel. The 

expiring of this provision will devastate the supply chain and destroy the numerous jobs created in the last several years, undermining the entire AGOA trade preference program. 

Through ACTIF, where I am chair, the African Cotton and Textile Industries Federation, we have actively advocated the need to 

have an organized regional supply chain which integrates the continent and creates a competitive industry to domestic and regional 

representations to individual countries and trading blocs. 

In this respect we have signed MOUs with the East African 

Community, the Common Market of Eastern Southern Africa, 

COMESA, and the African Union to ensure all members can easily 

operate across borders and the trade precipitates to global best 

practices toward economic freedom. 

AGOA has created a platform of African private sector to align 

mindsets and to present sub-Sahara Africa with a unified voice for 

the common objective in relations to trade. This has further filtered 

into the various governments in Africa, whereby a common approach and dialogue has become evident. 

The diplomatic relations between the U.S. Government and subSahara Africa have been elevated, allowing greater cohesion in respect to multilateral trade negotiations, especially in the WTO. 

AGOA has become and annually meet with the U.S. Government 

and sub-Sahara Africa to discuss what worked, what didn’t work, 

what can we do differently to benefit the people of the U.S. and 

sub-Sahara Africa? This dialogue allows exchange of ideas in respect to bilateral and multilateral trade negotiation, which in turn 

helps the people and livelihoods of both continents. 

Sub-Sahara Africa suffers major infrastructure challenges, hurting its competitiveness, which is an opportunity for U.S. exporters. 

AGOA as a framework can help address these challenges to create 

a win/win partnership within the U.S. and sub-Sahara Africa, espeVerDate 0ct 09 2002 16:12 Aug 22, 2012 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 F:\WORK\TNT\062012\74640 HFA PsN: SHIRL
22

cially in terms of value addition which sub-Sahara Africa desperately needs to employ its large population, which by 2040 will 

be the largest working-age population in the world, bigger than 

India and China. 

Also the combined GDPs of Africa are anticipated to grow by $1 

trillion by 2020, with consumer spending growing by $860 billion 

over the same period. Hence, AGOA can be remodeled to ensure 

U.S. exporters get a greater slice of this expanding economic pie. 

AGOA has, beyond economic terms, created a sense of belonging 

within sub-Sahara Africa, accelerating the regional integration 

agenda within various economic blocswith free movement of goods 

and services, lowering tariff and nontariff barriers for expanded 

trade within the region. 

The total AGOA export to the U.S. is less than 1 percent of the 

total U.S. imports, totaling about $1 billion, which in essence is a 

needle in the haystack, with no impact to the U.S. textile or apparel industry. In fact, both ACTIF and NCTO share common positions in respect to multilateral trade in the cotton textile value 

chain to help us and sustain a globally competitive cotton textile 

industry. 

The current status quo in respect to the expiring of the thirdcountry fabric provision, expiring on 30 September 2012, has created great uncertainty in the marketplace, whereby we have noticed reduction of orders from the U.S. buyers who will only place 

business if the factories underwrite the import duties payable in 

the event the extension of the provision is not obtained immediately. 

Considering the short window which we have left with 3 months 

and expiry to this date, the lead time far exceeds the production 

cycle. Renewal of AGOA’s third-country fabric was declared a top 

priority between Africa and the United States for 2011. In Zambia 

it is now a full 1 year, and what was a priority has become a crisis. 

The inaction of Congress will definitely impact the livelihoods and 

accelerate job losses in the industry. 

Finally, we cannot ignore the fact that job losses due to this inaction may impact the security situation of the region, and if not 

managed well could lead to a bigger insecurity that could harvest 

terrorist cells affecting global peace. 

Mr. ROYCE. Thank you. 

[The prepared statement of Mr. Bedi follows:]

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Mr. ROYCE. We will go to Mr. Hayes. 

STATEMENT OF MR. STEPHEN HAYES, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, THE CORPORATE COUNCIL ON AFRICA (CCA) 

Mr. HAYES. Thank you, Mr. Chairman, Congressman Sherman, 

Congresswoman Bass. 

Mr. ROYCE. Microphone. 

Mr. HAYES. Thank you. There we go. Sorry. 

Thank you Mr. Chairman, Congressman Sherman, Congresswoman Bass, and Congressman Deutch. 

I will speak from a different point, a slightly different point of 

view. I am in total agreement with what I think is the accuracy 

and the passion of Congressman Royce’s opening statement. It is 

also very good to see that the passion is still there after 12 years 

of AGOA. 

The Corporate Council on Africa is very much in favor of extending the third-party fabric agreement. Certainly, there are jobs at 

stake and that is very important, but I also think we have to address the issue of symbolism. 

It is highly symbolic that we get this done now. It is important 

to our relationships, political relationships and political credibility 

with Africa. And I think for those reasons alone, we need to move 

now. 

Our commitment to AGOA as an organization, I think, is beyond 

question. We also—I also agree with Congressman McDermott who 

said that the AGOA legislation also needs to be extended sooner, 

in the next session as opposed to waiting until 2015. My reasons 

for saying that is that I think that AGOA by itself is not enough 

for our relationships on U.S.-Africa economic trade and our political 

relationships. I think it has been the cornerstone of our policy. I 

think it is an important cornerstone, but if we are going to be effective in Africa economically and if we are going to be effective—

more effective politically, then we need a broader economic engagement. 

We need to look within that package to the access to financing 

for Africans. They are not going to be able to use AGOA if financing is not accessible, and more—I am sorry, just as important, we 

need access to financing for American companies to invest in 

AGOA. 

We also need to look at the issues of capacity building to make 

AGOA more effective, but also to make U.S.-Africa trade more effective. And certainly we need to look at infrastructure development power, IT, all of those issues. And the sooner we pass the extension of AGOA, the more I think we can address the broader economic policy that is needed toward Africa. 

In that, I would also agree that it is not simply Congress, that 

the administration needs to step up as a partner in that, and we 

need far greater public-private cooperation to make this work. I 

think our highest national security interest in the long term rests 

very much in Africa as much as, if not more, than other parts of 

the world as well. So we need a broader policy. AGOA is that cornerstone. We need to establish AGOA long term to reassure our 

27

long-term commitment, and then we need to move on from there. 

Thank you. 

Mr. ROYCE. Thank you, Mr. Hayes. 

[The prepared statement of Mr. Hayes follows:]


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Mr. ROYCE. We will go to Ms. Bass for her questions. 

Mr. SHERMAN. If I can just interject, I have been called to the 

Financial Services Committee. I am glad I was able to hear the 

witnesses and I may have some questions for the record. Thank 

you. 

Mr. ROYCE. Thank you, Mr. Sherman. Congresswoman Bass. 

Ms. BASS. Thank you again, Mr. Chair, Ranking Member, and 

our witnesses. I had a few questions I wanted to ask you. You 

know, this is about AGOA more generally. Given that it is more 

than 10 years old, what aspects do you think are most in need of 

change? And I am saying this also in light of Mr. McDermott’s comments and yours, Mr. Hayes, in terms of we don’t want to wait. 

But in anticipation of the next legislative session, what do you 

think we need to do to achieve the original goals of AGOA, including increasing U.S. trade and investments with sub-Saharan Africa? 

Mr. HAYES. I think—I am sorry. I think there are a number of 

things that need to be done. AGOA hasn’t been—all of us know 

that AGOA hasn’t been as effective as we would like. Its importance is beyond question, both politically and economically. It has 

meant jobs to thousands of people. I am in total agreement with 

Tony Carroll in saying that we ought to place sanctions on individuals as opposed to whole countries because of the damage it has 

done to workers and to industries. 

But I think that one of the issues that was not taken into—I 

guess fully into the planning of this when AGOA was formed, is the 

realization that the industries in Africa were not at the same point 

as the industries in Asia in 1960. Infrastructure was different. The 

fact is that infrastructure is lacking still in many parts of Africa. 

AGOA is not going to be effective if they can’t get their products 

to market. So clearly, infrastructure needs to take place. 

You have countries like Nigeria, that have still 80 percent of its 

power needs are not met, so how can you expect them to really 

have a consistent product flow to the United States or anywhere 

else? So we have got to address those issues if we are expecting 

AGOA to work. 

Ms. BASS. Well, I know that in the forum last week, infrastructure was certainly raised, both physical and institutional, and you 

have mentioned a couple of things. But what concrete actions do 

you think that we could take to improve trade capacity? If it is 

helping the infrastructure, where, how, when? 

Mr. HAYES. I think one of the initiatives, for instance, that Secretary Carson took with our own organization, taking an energy—

U.S. companies to Africa, because this is also where it helps the 

American economy. I think we—one of the issues where American 

companies can invest in Africa and speed up the process of development, energy and power is one of them. I think the mission, the 

energy mission to poor countries actually introduced 12 companies, 

10 of which were being introduced to Africa for the first time as 

a business destination. And the fact is there are ways to help the 

American economy at the same time as helping AGOA. I think 

those are issues. 

I think the issue of financing needs to be looked at very carefully. 

I think legislatively there are—Congress can make a difference on 

32

this. You can’t develop if you have no access to financing. And for 

a range of reasons, unrelated many times to anything happening 

here, African companies don’t have access to financing. 

Ms. BASS. Okay. Before my time runs out, I want to raise a couple of other things. One is—and this is for any of the panelists—

we are in the middle of negotiating free-trade agreements with several Asian Pacific Islander countries, including Vietnam, which is 

a major exporter of textiles and apparel to the U.S. And I am wondering if you have any thoughts on how that might impact U.S. 

trade under AGOA. 

And then I also wanted to ask, some people have suggested that 

the third-country provision may have a negative impact on eligible 

countries by incentivizing them to concentrate on low value-added 

production, and I want to know your thoughts on that. Have you 

seen any evidence of this? How can the United States encourage 

more diversification in production? 

Mr. RYBERG. I am happy to respond to both of your questions, 

Congresswoman Bass. On the question of TPP, our group is on 

record opposing extending a single transformation rule of origin to 

Vietnam, precisely because Vietnam is a superproducer. They are 

the most competitive producer of apparel in the world. 

When the third-country fabric provision was created for AGOA, 

it was because the AGOA apparel industry was in its infancy and 

was not competitive. It needed an extra help to enter the marketplace. 

The Vietnam situation is the exact opposite. They are the most 

competitive in the world, and they are the second biggest supplier 

of apparel to the United States. So giving them the equivalent of 

third-country fabric, which is the single transformation rule of origin, turns the policy on its head. So we are on record opposing that. 

The question of whether third-country fabric inhibits development is a legitimate one and a very serious one. And there is something that we think about all the time. But you really have a chicken and egg problem. To become long-term competitive, you need to 

be vertically integrated. You need to grow the cotton, and gin the 

cotton, spin the cotton, and make it into fabric, and then cut and 

sew that into garments. 

Only by being regionally vertically integrated can you really compete in today’s marketplace. But textile production, the yarn spinning, the fabric weaving, is capital intensive and high tech, and 

you have to have a critical mass of customers, the downstream, the 

apparel manufacturers, in order to attract the upstream investments. 

And so the strategy that AGOA took and that we endorse, is you 

start by growing the downstream, and once that reaches critical 

mass, then you will start to attract the upstream, the textile manufacturing. And we can see that just starting in Africa today, 12 

years after AGOA was enacted. 

And so we think that, yes, after a reasonable extension of AGOA 

third-country fabric, we would be in a position to wean ourselves 

off it and become globally competitive through vertical integration, 

but we are nowhere near that point right now. 

Mr. ROYCE. I think, following up on that, we are nowhere near 

the point on vertical integration. We knew it would take some time 

33

to reach that point. But there is another aspect of this as we think 

about textiles that enters the equation. And maybe, Mr. Ryberg, 

you or Mr. Carroll would like to comment on that. And that is the 

competition, for example, on cotton; the fact that the ag subsidies 

in the United States have an impact on that. Mr. Carroll, would 

you like to comment on those subsidies for a minute? 

Mr. CARROLL. Certainly. I mean, one of the problems that Africa 

has is that it has historically been with some exceptions, an exporter of raw unprocessed cotton to the developed world, where it 

is spun and woven and produced into fabric. So there hasn’t been, 

with some exceptions, a direct linkage between fabric production 

and apparel production. 

However, Mr. Chairman and Ranking Member, we are starting 

to see, as Paul mentioned, the growth of the textile industry in 

places like Ethiopia because you are now starting to see, as Paul 

said, a critical mass of demand. Also, fortunately, linked to that, 

Ethiopia is a cotton-producing country which is starting to show its 

ability of being able to produce at competitive prices and at higher 

quality that will be accepted by the world market. 

The U.S. textile industry is heavily subsidized. The odd thing 

about that is it provides a direct subsidy to the Chinese producers 

who buy that cotton at a lower price and make it even especially 

additionally difficult for African producers into that market. 

If you don’t mind, Mr. Chairman, I would like to address one 

issue that Congresswoman Bass mentioned about what can be done 

legislatively in the next term. In earlier sessions I discussed and 

testified on MCC. In that testimony a couple of years ago, I mentioned that I thought consideration should be given to granting regional compacts, because much of the infrastructure does not end 

at a border and, in fact, crosses a border. And we need to think of 

creative ways, possibly through the regional economic communities 

providing sufficient guarantees to allow MCC money to foster regional infrastructure. So that is something that could be done legislatively, and I think that has been discussed—tabled here before. 

Anything to add on the cotton side? 

Mr. ROYCE. Now, let me ask Mr. Bedi another question. When 

we talk about the eligibility criteria for AGOA, which originally 

was, there was some controversy involved in that. We wanted to 

see that eligibility criteria. In your testimony, you said it compelled 

most African countries to embrace the rule of law, allow for political pluralism, and respect for democracy and basic human rights. 

There is a Brookings Report that came out last week that notes 

that the criteria put into AGOA has been instrumental, in their 

words, in compelling African governments to improve the climate 

for business. In other words, improve the rule of law. 

Let me hear more about that, if I could. And the reason I want 

to hear more about it is because I still hear that issue, that we 

shouldn’t have tried to press for independent courts and the rule 

of law, and I think that might be crucial long term. 

Mr. BEDI. Thank you, Chairman. I think the classical example to 

give here is Madagascar. And a couple of years ago, when we had 

a President take over the country, the eligibility criteria fell apart, 

and the Madagascar factories did suffer. But at the same time, 

there was immense pressure on the administration at that time. 

34

And listen, we need to go back to having elections which are going 

to be free and fair, and that itself has actually created a sentiment 

in the whole continent: Listen, either we play by the rules or we 

will lose all the jobs which Madagascar demonstrated they lost all 

of AGOA jobs. 

So by and large, if you look across the continent everywhere, if 

you are going to be doing business with the U.S. and if you are 

going to be doing business under AGOA, there are certain fundamentals that you must observe, and those fundamentals are democracy, political pluralism. And we have seen that. You see Africa 

coming a long way today having—in Zambia a few months ago, we 

had a very smooth transition from one government to the other 

government, and it is no longer that I am here to stay and this is 

how it is going to be. 

Mr. ROYCE. One of the elements of feedback that I always received from those in civil society was that they felt it would be a 

force multiplier for the arguments they were making as to why rule 

of law had to proceed, and why, if it did not, there would be a 

downside risk for the government in power; and thus, whatever 

progress they made, they could ratchet up in terms of being able 

to advance the system of law and have a deterrent effect on those 

who were trying to undermine it. 

Mr. BEDI. Yes, but you see the way to look at this, Mr. Chairman, is that we have come from a colonial past here in the last 50 

years, most of us. And the whole constitutions of all of these countries were actually designed for the fewer elite and the top echelon 

that controlled these economies. Kenya is probably the first country 

that actually changed its constitution in August 2010, and next 

year as we go into election, we are going to be the only country in 

Africa as a role model, whereby we have actually changed our entire governance style. We are going to have a devolved government. 

We are going to have a parliamentary system which is going to be 

supreme. And we have seen it in the last couple of months. 

The President appointed a chief justice, and Parliament said no. 

And this is the first time in the history of Africa that the Parliament said no, and the President retracted and ran through procedural announcements. And I am sure this will spread across the 

continent because everybody is talking about a new constitution. In 

the Zambian election the new President came back and said, We 

are going to have a new constitution. And we are seeing that happening every other day in the neighborhoods, that they are all talking about this old constitution that they all embraced. And I can 

tell you that the former Presidents that we have had, they have enjoyed this power, primarily because it was designed for Lancashire 

and not for Africa. 

Mr. ROYCE. Right. Mr. Deutch. Thank you. 

Mr. DEUTCH. Thank you, Mr. Chairman. I would like to capitalize on the experiences of the members of the panel and broaden 

the discussion a bit. As we know, the Chinese have put considerable resources into developing trade with Africa. I wonder if you 

could speak to what can be done other than—other than renewing 

AGOA, what can Congress do to promote U.S. competitiveness to 

encourage further trade and to tackle head-on the competition that 

35

the Chinese pose, given their continued expansion in the continent? 

I throw that out to the panel. 

Mr. HAYES. All right. We also took a delegation to China to look 

at exactly those issues, some of our businesses. China, the relationship with China and Africa I think is more complex than we give 

it credit for being. But particularly the large state-owned enterprises get extensive financing. That is easily accessible. They can 

put a package together very quickly. We simply don’t have that capability. One is that—could we reduce that somewhat? Yes. I think 

we have to find ways that the private sector and the public sector 

can work together much more quickly. There has got to be an openness to the private sector by the administration, whatever administration that is. 

On your specific question, I think financing, again, is key. We are 

looking to try to structure, you know, a strong positive relationship 

with Ex-Im. I think they need to be let loose a little bit more on 

Africa. On one hand, they are—they have the demand that they 

produce money for the U.S. Treasury, so they are going to be more 

risk averse in order to meet that demand. 

They also have a 2 percent limit now, I think, on—which also is 

going to make it a little—I think you can—there are many safe investments in Africa, but there is a risk-averse mentality under 

those two constraints. We have got to find ways to reduce that risk. 

American banks aren’t investing, aren’t making loans available 

for Africa, certainly not without Ex-Im support. What we are seeing, interestingly, is not a rise in American banks joining CCA, but 

African banks, Standard Bank, United Bank of Africa, Standard 

Charter, because they see if American banks aren’t going to fill this 

void, perhaps we can begin to fill that void. 

But the number one issue that we heard at the Brookings Institution as part of this AGOA week, we hear from our members, is 

the access to financing. And that, I think, is one of the most important issues that Congress can deal with. 

Mr. DEUTCH. And Mr. Hayes, as long as you have got the microphone, you spoke earlier in response to several comments here 

about infrastructure and the need for infrastructure development 

in Africa. You spoke extensively about power. Could you speak as 

well to the issue of transportation infrastructure, particularly given 

the number of landlocked countries, and what your vision would be 

how transportation infrastructure can be expanded for economic development? 

Mr. HAYES. Yes, I don’t know that I can speak as well on that 

issue, but the—this is where I think Mr. Carroll was absolutely 

right, that we need to look at regionalization. You have from one 

company to another where the rail gauges don’t match. You have 

to take things off the train, and then take them essentially by hand 

truck over to the next train because the gauge is different. Also, 

the customs duties country by country, somebody trying to truck 

something to three or four countries may pay customs duties 20 

times along the way. 

So there needs to be a harmonization and regionalization and we 

need to work, I think—look at regions as more viable entities, because if the regions are able to harmonize then, the countries 

36

themselves fall into that category as well. So I think regionalization is vital. We need to support that. 

And I think that MCC, I am in total agreement with Mr. Carroll 

that MCC should look at regional projects and not simply—not simply country by country, because I also think we can compete with 

China better if we are working on regions than country by country 

as well. 

Mr. DEUTCH. Thank you. 

Mr. ROYCE. Thank you, Congresswoman Jackson Lee, would you 

like to make any——

Ms. JACKSON LEE. Thank you, Mr. Chairman. Thank you for 

your courtesies, and thank you for your indulgence to the ranking 

member, to the chairperson, and to my colleagues here. I will make 

a statement and it is one singular question, if I might. 

I had the privilege of traveling on the inaugural trip as we began 

to finally craft—though many had been working on the AGOA Act 

for a very long time, as Congresswoman Bass so eloquently spoke 

at a meeting we were at. And we went on a seven-country congressional delegation to speak to the value of this legislative initiative. 

And I am proud of my colleagues, Republicans and Democrats, who 

came together to recognize, I think, one singular point: That the 

continent of Africa can be one of America’s greatest allies, first of 

all, and has been in the past, but also one of our greatest trading 

partners, or partner. Sometimes trade gets a bad name, but at the 

time that we were traveling, we heard words such as ‘‘trade, not 

aid,’’ and we finally reconciled that we want trade and aid where 

it is necessary and usable. 

But the point that I want to make on this record is that AGOA 

has had enormous success with challenges. But we have seen, and 

we know it can be documented, that many, many jobs have been 

created because of the African Growth and Opportunity Act. And 

over the years we have listened to business persons, governments, 

and others discussing how important this particular initiative is, 

this balance of allowing the growth of, in this instance, the textile 

industry. 

So I am interested in finding out the specific impact of the nonextension and what it would do to jobs and what it would do to the 

progress that has been made, and I am going to start with Mr. 

Bedi. 

Mr. BEDI. Thank you. The impact of non-extension is simple, and 

I mean, we are going to have a mass exodus of the factories that 

we have got in the region at the moment. All our production will 

be shifted to Asia, and besides all that, we have a major problem 

in the neighborhood where we are seeing all of these terrorist cells 

coming up. And we are going to actually see joblessness, which can 

be harnessed to a very different direction because of security concerns. 

As we all know, Africa has got a large population which is unemployed, 70 percent of which is under the age of 40. And a lot of 

them are unemployed, and so that whole impact, if you look at it, 

we need to create the jobs to create social peace. And I think that 

is really the agenda that Africa needs to have, and job creation can 

only be done in a labor-intensive industry like textile enterprise. 

37

Ms. JACKSON LEE. Would you care to give me a ballpark figure 

as to how many you think might be employed? This has been, I am 

counting 1997, 1998, when this bill was passed, I think, as I recall. 

We are in 2012. Obviously, it had to be implemented, but what 

have you seen in the growth of employment around these industries? 

Mr. BEDI. We saw 300,000 new jobs have been created as soon 

as AGOA was enacted after the year 2000, and which peaked up 

to about 2006. That is when we hit 300,000. And thereafter after 

that multifiber agreement, we had some exodus of factories leaving, 

because the sole purpose of those factories being located in Africa 

was to beat the quota regime and not so much the tariff regime, 

the import tariff regime. 

The import tariff regime really is that competitive advantage 

that we have today, as compared to Asia. And today, if you look 

at those jobs that we would have, it would be about 200,000, because we have already lost about 100,000 from 2005 to 2012. 

Ms. JACKSON LEE. Well, let me, I don’t know if anyone else, I see 

some thought here about negative impacts on sub-Saharan Africa. 

And would anyone want to rebut that statement of any negative 

impact or explain that statement? 

Mr. ROYCE. Maybe the concept, if I can interject, is the negative 

impact, that jobs are leaving now because we haven’t, Congresswoman, been able, we haven’t been effective in extending this 

AGOA provision. And as a consequence, because businesses are 

planning long range, we see them voting with their feet by moving 

their factories. 

And that is why Congresswoman Bass asked for this hearing 

today, to see if we could do anything to set in motion a focus on 

the fact that there has been a real negative impact in terms of 

businesses deciding to relocate and shipping their orders instead to 

Asia. 

Ms. JACKSON LEE. Well, if the gentleman would yield, there is 

the making of a bipartisan effort, and I came specifically, although 

I was delayed in departing, so I thank you for your courtesies. I 

think you have hit the nail on the head, business planning, and 

that is why I asked, 300,000 jobs; that means we have an opportunity to increase or to build on 300,000 jobs and to bring companies back and to spread the opportunity even beyond sub-Sahara. 

So I just wanted to conclude my remarks, Mr. Chairman, if you 

continue to yield, and to the ranking member, that I look forward 

to working in the manner that we can. I just want to leave the 

record clear: The continent of Africa is a vital, important ally and 

friend. And that is the nation states with a variety of resources and 

the infrastructure and human resource component. Building of infrastructure, human resource, and building of the economic engine 

of that continent will be valuable to the American people, as it will 

be valuable to the world, and as it will be valuable specifically to 

the people of the continent of Africa. Thank you for holding this 

hearing and I yield back. 

Mr. ROYCE. Thank you, Congresswoman Jackson Lee, we thank 

you for that mission that we took to Africa in terms of trying to 

build support, and the support was there across Africa for AGOA. 

38

And we thank Congresswoman Karen Bass for asking for this 

hearing today in order to try to jump-start this legislation. I thank 

the witnesses for their testimony. 

We stand adjourned. 

[Whereupon, at 3:38 p.m., the subcommittees were adjourned.] 

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