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[Senate Report 112-231]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 536
112th Congress                                                   Report
                                 SENATE
 2d Session                                                     112-231

======================================================================

 
 INCREASING AMERICAN JOBS THROUGH GREATER EXPORTS TO AFRICA ACT OF 2012

                                _______
                                

               November 13, 2012.--Ordered to be printed

          Mr. Kerry, from the Committee on Foreign Relations,
                        submitted the following

                              R E P O R T

                         [To accompany S. 2215]

    The Committee on Foreign Relations, having had under 
consideration the bill (S. 2215) to create jobs in the United 
States by increasing United States exports to Africa by at 
least 200 percent in real dollar value within 10 years, and for 
other purposes, reports favorably thereon and recommends that 
the bill, as amended, pass.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Committee Action.................................................1
III. Discussion.......................................................2
 IV. Cost Estimate....................................................5
  V. Evaluation of Regulatory Impact..................................8
 VI. Changes in Existing Law..........................................8

                               I. Purpose

    The purpose of S. 2215 is to ``to create jobs in the United 
States by expanding programs that will result in increasing 
United States exports to Africa by 200 percent in real dollar 
value within 10 years.'' To achieve this objective, the bill 
directs the administration to submit to Congress an interagency 
strategy, to improve United States Government staffing for 
U.S.-Africa trade, to expand the Export-Import Bank of the 
United States financing for projects in Africa, and to ensure 
adequate EXIM funding to counter foreign export credit finance 
that is noncompliant with agreements of the Organisation for 
Economic Co-Operation and Development (OECD).

                          II. Committee Action

    S. 2215 was introduced on March 21, 2012, by Senators 
Durbin, Boozman, and Coons. It was discussed at a committee 
hearing on July 25, 2012. On September 19, 2012, the committee 
ordered S. 2215, with an amendment in the nature of a 
substitute, reported favorably by voice vote.

                            III. Discussion

    With a population of approximately 1 billion people, the 
African Continent\1\ offers tremendous opportunities to U.S. 
companies and investors who are willing and able to overcome 
initial obstacles. According to the Office of the United States 
Trade Representative, between 2000 and 2010, six of the ten 
fastest-growing economies in the world were in sub-Saharan 
Africa. In addition, recent reports by the McKinsey Global 
Institute\2\ indicate that:
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    \1\In some trade and U.S. foreign policy contexts, the term 
``Africa'' refers to sub-Saharan Africa (SSA), while North African 
countries are considered together with countries in the Middle East. 
AGOA preferences, for example, only apply to SSA countries. S. 2215/
H.R. 4221, however, defines Africa as consisting of 54 countries (see 
Table A-1 in appendix). These 54 countries include 48 countries in sub-
Saharan Africa, as well as South Sudan, and the North African countries 
of Algeria, Egypt, Libya, Morocco, and Tunisia. Within this memo, the 
term ``Africa'' refers to all 54 countries in the region, while SSA 
refers to all except those in North Africa.
    \2\McKinsey Global Institute, ``Africa at work: Job creation and 
inclusive growth'' (August 2012); ``Lions on the move: The progress and 
potential of African economies'' (June 2010).

   Africa has been the second-fastest-growing region in 
        the world over the past decade (after Emerging Asia), 
        with gross domestic product (GDP) expected to expand by 
        4.8 percent in 2012.
   Poverty is declining and the number of African 
        households that joined the consuming classes rose 
        roughly 50 percent in the past decade (to approximately 
        90 million).
   African economies will profit from rising global 
        demand for oil, natural gas, minerals, food, arable 
        land, and other natural resources. However, less than 
        one-quarter of Africa's GDP growth from 2000 to 2008 
        came from natural resources, with the bulk of growth 
        coming from wholesale and retail trade, transportation, 
        telecommunications, and manufacturing. Thus there are 
        opportunities in a number of sectors.
   The African Continent is estimated to need $72 
        billion in infrastructure investment per year, 
        presenting American businesses with significant 
        openings for investment.

    There are, however, a number of challenges that U.S. 
businesses face when considering investing or exporting to the 
region. The most recent available data suggest that U.S. 
exports and investment in Africa account for just 2 percent and 
1 percent of the U.S. totals in these areas of activity. Lack 
of existing infrastructure, corruption, and capacity shortfalls 
can also inhibit investment. Increased assistance from the U.S. 
Government to help reduce barriers to American investment and 
facilitate entry into markets by U.S. businesses of all sizes 
would help companies navigate this process and create American 
jobs in the process.
    The United States has nine key agencies involved in 
promoting U.S. exports and investments in foreign countries,\3\ 
however, coordination of the activities of these agencies could 
be enhanced. This legislation (S. 2215) aims to create jobs in 
the United States by expanding programs that will result in 
increasing United States exports to Africa by 200 percent in 
real dollar value within 10 years. To achieve this objective, 
the bill directs the administration to submit to Congress a 
coordinated, interagency strategy, to improve U.S. Government 
staffing for U.S.-Africa trade, to expand EXIM financing for 
projects in Africa, and to seek to ensure adequate EXIM funding 
to counter foreign export credit finance that is noncompliant 
with OECD agreements. The bill is consistent with President 
Barack Obama's Presidential Policy Directive, ``U.S. Strategy 
Toward Sub-Saharan Africa,'' which encourages U.S. companies to 
trade with and invest in Africa.
---------------------------------------------------------------------------
    \3\These are the U.S. Departments of Agriculture (USDA), Commerce, 
State, and the Treasury, as well as the Export-Import Bank (EXIM), the 
Overseas Private Investment Corporation (OPIC), the U.S. Trade and 
Development Agency (TDA), the Small Business Administration (SBA), and 
the U.S. Trade Representative (USTR). Export promotion activities 
include providing export financing and advocacy assistance to U.S. 
companies to overcome information and market entry barriers.
---------------------------------------------------------------------------
    A section-by-section discussion of the legislation follows.

Section 2

    Section 2 includes the findings, noting the importance of 
exports to U.S. businesses and workers, the need for improved 
coordination among government agencies involved in export 
promotion, the support that competitors to U.S. firms receive 
from their governments, and the rapidly expanding opportunities 
in Africa available to foreign investors and exporters.

Section 3

    Section 3 defines the terms used in the bill.

Section 4

    Section 4 requires the administration to submit to Congress 
a coordinated, interagency strategy, not later than 180 days 
after the date of the enactment of this Act, to expand U.S. 
exports to Africa by 200 percent in real dollars over the next 
decade. A progress report is also required after 3 years to 
assess the success of the strategy.
    The administration is directed to focus the strategy on: 
(i) increasing exports of United States goods and services to 
Africa by 200 percent in real dollar value within 10 years; 
(ii) promoting the alignment of United States commercial 
interests with development priorities in Africa; (iii) 
developing relationships between governments in Africa and U.S. 
businesses that possess expertise in such issues as 
infrastructure development, technology, telecommunications, 
energy, and agriculture; (iv) improving the competitiveness of 
U.S. businesses in Africa, including the role the African 
diaspora can play in enhancing such competitiveness; (v) 
exploring ways that African diaspora remittances can help 
communities in Africa tackle economic, development, and 
infrastructure financing needs; (vi) promoting economic 
integration in Africa; (vii) encouraging a greater 
understanding among U.S. business and financial communities of 
the opportunities Africa holds for U.S. exports; and (viii) 
monitoring the financing terms available to U.S. businesses 
relative to the terms made available to foreign firms by their 
governments.
    In developing the strategy, the President is required to 
consult with Congress, each U.S. agency that is involved in 
trade promotion or development, the World Bank Group and the 
African Development Bank, businesses, nongovernmental 
organizations, and African diaspora groups.

Section 5

    To improve the coordination of the U.S. agencies involved 
in the promotion of U.S. exports and investment abroad, section 
5 creates a Special Africa Export Strategy Coordinator (i) to 
oversee the development and implementation of the strategy 
required by section 4; and (ii) to coordinate with the trade 
promotion and development agencies with respect to developing 
and implementing the strategy.

Section 6

    Section 6 states the sense of Congress that, not later than 
1 year after the date of the enactment of this Act, the 
Secretary of Commerce and other high-level officials of the 
U.S. Government with responsibility for export promotion, 
financing, and development should conduct a joint trade mission 
to Africa.

Section 7

    To offset the impact of past under-resourcing of commercial 
programs focused on Africa, and to help U.S. companies more 
effectively to seize new opportunities on the African 
Continent, section 7 directs several agencies to allocate 
adequate personnel and to ensure adequate information 
technology systems to implement the strategy.
    The Secretary of Commerce is directed to ensure that not 
less than 12 Commercial Service officers are assigned to U.S. 
embassies in Africa for each of the 5 fiscal years beginning 
after enactment of this Act. The Secretary of Commerce is also 
directed, as soon as practicable after enactment of this Act, 
to assign not less than one full-time Commercial Service 
officer to the Office of the U.S. Executive Director at the 
World Bank and the African Development Bank.
    The Export-Import Bank of the United States (``EXIM'') is 
directed (i) to increase the number of staff who spend the 
majority of the year based in Africa and increase the number of 
business development trips it conducts in Africa; (ii) to 
increase, to not less than 30, the number of employees assigned 
to U.S. field offices to work in coordination with the related 
export efforts undertaken by the Small Business Administration 
regional field offices; and (iii) to upgrade its equipment and 
software to process and track applications for financing more 
expeditiously, effectively, and efficiently.
    The Overseas Private Investment Corporation (``OPIC'') is 
directed to increase, by not more than five, the staff needed 
to promote stable and sustainable economic growth and 
development in Africa, to strengthen and expand the private 
sector in Africa, and to facilitate the general economic 
development of Africa, with a particular focus on helping 
United States businesses expand into African markets. OPIC 
shall also report to Congress on whether recent technology 
upgrades have resulted in more effective and efficient 
processing and tracking of applications for OPIC financing.
    Section 7 also includes a rule of construction making clear 
that nothing in the section shall be construed as permitting 
the reduction of Department of Commerce, Department of State, 
EXIM, or OPIC personnel or the alteration of planned personnel 
increases in other regions, except where a personnel decrease 
was previously anticipated or where decreased export 
opportunities justify personnel reductions.

Section 8

    Section 8 directs the President to develop a plan (i) to 
standardize the training received by Commercial Service 
officers, economic officers of the Department of State, and 
economic officers of the U.S. Agency for International 
Development with respect to the programs and procedures of 
EXIM, OPIC, the Small Business Administration, and the U.S. 
Trade and Development Agency; and (ii) to ensure that, not 
later than 1 year after enactment of this Act all Commercial 
Service officers that are stationed overseas receive the 
training and, in foreign posts to which no Commercial Service 
officer is assigned, any economic officer of the Department of 
State stationed in that country receive that training.

Section 9

    Section 9 provides more specific guidance to EXIM on the 
financing that it makes available to U.S. firms by expressing 
the sense of Congress that foreign export credit agencies are 
providing non-OECD arrangement compliant financing in Africa, 
and that in order to counter such actions and ensure U.S. jobs, 
EXIM should provide timely financing to meet such terms, as 
appropriate.
    Section 9 amends section 6(a) of the Export-Import Bank Act 
of 1945 (12 U.S. C. 635e(a)) by requiring EXIM (i) to increase 
the amount it finances to Africa over the prior year's 
financing for each of the first 5 fiscal years beginning after 
enactment of this Act; and (ii) not later than 1 year after 
enactment of this Act, and annually thereafter for 5 years, to 
report to Congress if EXIM has not used at least 10 percent of 
its lending capabilities for projects in Africa.
    Section 9 also directs EXIM to make available annually such 
amounts as are necessary for loans that counter trade 
distorting non-OECD arrangement compliant financing or 
preferential, tied aid, or other related nonmarket loans 
offered by other nations to their firms for projects in which 
U.S. companies are competing or interested in competing.
    Finally, section 9 requires, not later than 1 year after 
enactment of this Act, and annually thereafter for 5 years, 
EXIM to report to Congress if the Bank has not used at least 
$250,000,000 annually for loans that counter non-OECD 
arrangement compliant financing offered by other nations to 
their firms.

Section 10

    Section 10 makes technical and conforming amendments to 
section 22(b) of the Small Business Act (15 U.S.C. 649(b)).

Section 11

    Section 11 states that, where applicable, the President 
shall explore opportunities to negotiate bilateral, 
subregional, and regional agreements that encourage trade and 
eliminate nontariff barriers to trade between countries. It 
also states that with respect existing agreements between the 
United States and countries in Africa, the President shall 
ensure that the agreements are being implemented in a manner 
that maximizes the positive effects for U.S. trade, export, and 
labor interests as well as the economic development of the 
countries in Africa.

                           IV. Cost Estimate

    In accordance with Rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the committee provides this 
estimate of the costs of this legislation prepared by the 
Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 26, 2012.
Hon. John F. Kerry,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2215, the Increasing 
American Jobs Through Greater Exports to Africa Act of 2012.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sunita 
D'Monte.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

S. 2215--Increasing American Jobs Through Greater Exports to Africa Act 
        of 2012

    Summary: S. 2215 would expand federal programs and 
initiatives to promote exports to Africa. CBO estimates that 
implementing the bill would have discretionary costs of $24 
million over the 2013-2017 period, assuming appropriation of 
the necessary amounts.
    Pay-as-you-go procedures do not apply to this legislation 
because it would not affect direct spending or revenues.
    S. 2215 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2215 is shown in the following table. 
The costs of this legislation fall within budget functions 150 
(international affairs) and 370 (commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
                                                                   By fiscal year, in millions of dollars
                                                           -----------------------------------------------------
                                                                                                          2013-
                                                              2013     2014     2015     2016     2017     2017
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Trade Financing Agencies:
    Estimated Authorization Level.........................        2        2        3        3        3       13
    Estimated Outlays.....................................        2        2        3        3        3       11
International Trade Administration:
    Estimated Authorization Level.........................        3        2        2        2        2       12
    Estimated Outlays.....................................        2        2        2        2        2       11
Trade Promotion Strategy:
    Estimated Authorization Level.........................        *        *        *        *        *        2
    Estimated Outlays.....................................        *        *        *        *        *        2
Total Changes:
    Estimated Authorization Level.........................        5        4        5        5        5       27
    Estimated Outlays.....................................        4        4        5        5        5       24
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Notes: Components may not sum to totals because of rounding.
* = less than $500,000.

    Basis of estimate: For this estimate, CBO assumes that S. 
2215 will be enacted early in fiscal year 2013, that the 
necessary amounts will be appropriated each year, and that 
outlays will follow historical spending patterns for existing 
programs.

Trade Financing Agencies

    Section 7 of the bill would require the Export-Import Bank 
of the United States (Ex-Im) and the Overseas Private 
Investment Corporation (OPIC) to increase their staffing levels 
to promote trade and investment in Africa. Based on information 
from those agencies, CBO estimates that Ex-Im would hire three 
additional employees to serve overseas at an annual cost of 
about $350,000 per person and two additional employees to serve 
in the United States at an annual cost of about $200,000 per 
person, and that OPIC would require five additional employees 
at an annual cost of about $200,000 per person. In total, those 
additional personnel would require annual appropriations of $2 
million to $3 million a year, and would cost $11 million over 
the 2013-2017 period, assuming appropriation of the necessary 
amounts. Section 9 would require Ex-Im to increase its activity 
in Africa or to report annually to the Congress if it cannot 
provide at least 10 percent of its financing to that region. 
Ex-Im currently provides about 5.5 percent of its financing to 
Africa. Because the bill would not increase the overall cap on 
Ex-Im's financing, implementing that provision would require 
the bank to reduce its financing to other regions of the world. 
New financing provided to Africa could be more or less risky 
than financing in other regions and could therefore increase or 
decrease the appropriations needed to cover Ex-Im's subsidy 
costs; however, CBO has no basis for estimating the net effect 
of such changes in the bank's financing.
    Finally, section 10 would require Ex-Im to increase its 
tied aid to Africa or to report annually to the Congress if it 
cannot provide at least $250 million each year in such loans to 
Africa. Tied aid is a form of concessional lending that 
requires the recipient to buy goods or services from the donor. 
Ex-Im has $178 million in funding for tied aid, but over the 
last five years Ex-Im has made only one such loan worth $23 
million (of which $8 million was concessional financing).
    Under long-standing guidelines jointly developed and 
implemented by Ex-Im and the Department of the Treasury, Ex-Im 
does not unilaterally initiate such loans; instead, it can 
counter offers made by other countries. There are evidentiary 
requirements and other thresholds that have resulted in very 
few loans being made. The bill does not alter those conditions 
and based on information from Ex-Im, CBO estimates that Ex-Im 
is unlikely to increase its tied aid or meet the bill's goal of 
$250 million each year in tied aid. CBO further estimates that 
the annual report to the Congress would cost less than $500,000 
over the 2013-2017 period, assuming the availability of 
appropriated funds.

International Trade Administration

    Sections 7 and 8 would increase costs to the International 
Trade Administration (ITA) by raising the number of foreign 
commercial service officers that are assigned to Africa, 
requiring additional staff to be placed at the African 
Development Bank, and requiring the agency to develop a 
training program for foreign commercial service and economic 
officers with respect to programs of the Ex-Im, OPIC, the Small 
Business Administration, and the United States Trade and 
Development Agency.
    Based on information from the ITA, CBO estimates that the 
agency would open a new post in Africa and hire two additional 
foreign commercial service officers to serve in Africa at a 
cost of about $2 million per year, and hire one additional 
officer to serve at the African Development Bank at a cost of 
about $400,000 per year for salaries and administrative 
support. In addition, CBO estimates that providing training for 
foreign commercial service and economic officers would cost 
about $400,000 to develop the curriculum and to cover the costs 
incurred by attendees to travel to a central location to 
receive the training. Taken together, CBO estimates that 
implementing those provisions would cost $11 million over the 
2013-2017 period, assuming appropriation of the necessary 
amounts.

Trade Promotion Strategy

    Section 4 would require the President to designate a 
special coordinator to develop a strategy and implement a 
strategy to promote exports to Africa. Based on information 
from the ITA, CBO estimates that implementing those provisions 
would cost less than $500,000 a year over the 2013-2017 period, 
assuming the availability of appropriated funds.
    Pay-as-you-go considerations: None.
    Intergovernmental and private sector impact: S. 2215 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Sunita D'Monte and 
Susan Willie; Impact on State, Local, and Tribal Governments: 
J'nell L. Blanco; Impact on the Private Sector: Marin Randall.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                   V. Evaluation of Regulatory Impact

    Pursuant to Rule XXVI, paragraph 11(b) of the Standing 
Rules of the Senate, the committee has determined that there is 
no regulatory impact as a result of this legislation.

                      VI. Changes in Existing Law

    In compliance with Rule XXVI, paragraph 12 of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, existing law in which no changes are proposed is shown 
in roman).

                      TITLE 12--BANKS AND BANKING

          Chapter 6A--Export-Import Bank of the United States

SUBCHAPTER I--GENERAL PROVISIONS

           *       *       *       *       *       *       *

SECTION 635E. AGGREGATE LOAN, GUARANTEE, AND INSURANCE AUTHORITY

    (a) Limitation on Outstanding Amounts.--(1) In general.--
The Export-Import Bank of the United States shall not have 
outstanding at any one time loans, guarantees, and insurance in 
an aggregate amount in excess of the applicable amount.
    (2) Applicable amount.--* * *

           *       *       *       *       *       *       *

    (3) Subject to appropriations.--* * *
    (4) Percent of financing to be used for projects in 
Africa.--The Bank shall increase the amount it finances to 
Africa over the prior year's financing for each of the first 
five fiscal years beginning after the date of the enactment of 
the Increasing American Jobs Through Greater Exports to Africa 
Act of 2012.

           *       *       *       *       *       *       *

                      TITLE 15--COMMERCE AND TRADE

The Small Business Act

           *       *       *       *       *       *       *

Chapter 14A--Aid to Small Business

           *       *       *       *       *       *       *

SECTION 649. OFFICE OF INTERNATIONAL TRADE

    (a) Establishment.--
          (1) Office.--There is established within the 
        Administration an Office of International Trade which 
        shall implement the programs pursuant to this section 
        for the primary purposes of increasing.--
                  (A) the number of small business concerns 
                that export; and
                  (B) the volume of exports by small business 
                concerns.
          (2) Associate Administrator.--The head of the Office 
        shall be the Associate Administrator for International 
        Trade, who shall be responsible to the Administrator.
    (b) Trade Distribution Network.--The Associate 
Administrator, working in close cooperation with the Secretary 
of Commerce, the United States Trade Representative, the 
Secretary of Agriculture, the Secretary of State, the President 
of the Export-Import Bank of the United States, the President 
of the Overseas Private Investment Corporation, Director of the 
United States Trade and Development Agency, the Trade Promotion 
Coordinating Committee, and other relevant Federal agencies, 
small business development centers engaged in export promotion 
efforts, Export Assistance Centers, regional and district 
offices of the Administration, the small business community, 
and relevant State and local export promotion programs, shall--
          (1) maintain a distribution network, using regional 
        and district offices of the Administration, the small 
        business development center network, networks of 
        women's business centers, the Service Corps of Retired 
        Executives authorized by section 637 (b)(1) of this 
        title, and Export Assistance Centers, for programs 
        relating to--
                  (A) trade promotion;
                  (B) trade finance;
                  (C) trade adjustment assistance;
                  (D) trade remedy assistance; and
                  (E) trade data collection;
          (2) aggressively market the programs described in 
        paragraph (1) and disseminate information, including 
        computerized marketing data, to small business concerns 
        on exporting trends, market-specific growth, industry 
        trends, and international prospects for exports;
          (3) promote export assistance programs through the 
        district and regional offices of the Administration, 
        the small business development center network, Export 
        Assistance Centers, the network of women's business 
        centers, chapters of the Service Corps of Retired 
        Executives, regional offices of the Export-Import Bank, 
        State and local export promotion programs, and partners 
        in the private sector; and

           *       *       *       *       *       *       *

                                  
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