```

[Senate Hearing 112-604]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-604

        ECONOMIC STATECRAFT: EMBRACING AFRICA'S MARKET POTENTIAL

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON AFRICAN AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 28, 2012

                               __________

       Printed for the use of the Committee on Foreign Relations

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      Available via the World Wide Web: http://www.gpo.gov/fdsys/

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                COMMITTEE ON FOREIGN RELATIONS         

             JOHN F. KERRY, Massachusetts, Chairman        
BARBARA BOXER, California            RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   MARCO RUBIO, Florida
JIM WEBB, Virginia                   JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware       JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois          JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico                MIKE LEE, Utah
               William C. Danvers, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

                         ------------          

                SUBCOMMITTEE ON AFRICAN AFFAIRS        

            CHRISTOPHER A. COONS, Delaware, Chairman        

BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
JIM WEBB, Virginia                   JAMES M. INHOFE, Oklahoma
RICHARD J. DURBIN, Illinois          MIKE LEE, Utah
TOM UDALL, New Mexico                BOB CORKER, Tennessee

                              (ii)        

                            C O N T E N T S

                              ----------                              
                                                                   Page

Carson, Hon. Johnnie, Assistant Secretary for African Affairs, 
  U.S. Department of State, Washington, DC.......................     4
    Prepared statement...........................................     7
Coons, Hon. Christopher A., U.S. Senator from Delaware, opening 
  statement......................................................     1
Gast, Hon. Earl, Assistant Administrator for Africa, U.S. Agency 
  for International Development, Washington, DC..................    10
    Prepared statement...........................................    11
Isakson, Hon. Johnny, U.S. Senator from Georgia, opening 
  statement......................................................     3
Liser, Florizelle, Assistant U.S. Trade Representative for 
  Africa, Office of the U.S. Trade Representative, Washington, DC    15
    Prepared statement...........................................    17

                                 (iii)

 
        ECONOMIC STATECRAFT: EMBRACING AFRICA'S MARKET POTENTIAL

                              ----------                              

                        THURSDAY, JUNE 28, 2012

                               U.S. Senate,
                   Subcommittee on African Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:35 p.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Christopher 
A. Coons (chairman of the subcommittee) presiding.
    Present: Senators Coons, Udall, and Isakson.

        OPENING STATEMENT OF HON. CHRISTOPHER A. COONS,
                   U.S. SENATOR FROM DELAWARE

    Senator Coons. I am pleased to convene today's hearing of 
the African Affairs Subcommittee, entitled ``Economic 
Statecraft: Embracing Africa's Market Potential.''
    I would like to welcome my friend and partner on the 
subcommittee, Senator Johnny Isakson of Georgia, and thank our 
distinguished panel of three witnesses for sharing their 
expertise with us.
    We will hear today from Assistant Secretary Carson, USAID 
Assistant Administrator Gast, and Assistant USTR for Africa, 
Florie Liser. We will also convene a second hearing on this 
topic in July, and I very much look forward to testimony from 
the U.S. Department of Commerce at that hearing, as well as 
other Government agencies critical to our developing trade 
relationship with Africa and the private sector.
    Today, we will explore Africa's vast economic potential, 
both for U.S. businesses and investors and as a means of 
sustainable development, as well as steps our Government could 
take to increase bilateral investment and trade. Over the past 
decade, Africa has been home to 6 of the 10 fastest-growing 
economies in the world, which is projected soon to reach 7. And 
the first of several visuals here shows those rapidly growing 
economies.
    According to the IMF, the region is on track to grow by 6 
percent this year, roughly the same as Asia, and is on the 
brink of an economic takeoff. Trade between Africa and the rest 
of the world has tripled in the last 10 years, with an increase 
in exports of more than 200 percent and an increase in imports 
of 250 percent, as shown in this graphic.
    Increased trade between the United States and Africa is 
mutually beneficial. It fosters economic growth in Africa and 
creates jobs here at home. That is why Senators Durbin, 
Isakson, Boozman, and I have introduced S. 2215, the Increasing 
American Jobs Through Greater Exports to Africa Act, which 
requires the administration to develop a strategy for 
increasing U.S. exports by 200 percent in the next 10 years.
    There is more that could be done to fully capitalize in 
Africa's vast economic potential and, in my view, to compete 
more aggressively with countries such as China, which has 
recently surpassed the United States as Africa's largest 
trading partner.
    Today, the United States foreign assistance budget for 
Africa focuses on responding to health, food security, and 
humanitarian crises. But as we look to the future, it is 
imperative to better align our investments with the reality of 
modern-day Africa, focusing more on economic statecraft and 
transitioning from aid to trade.
    When it comes to the private sector, Africa is the 
destination of a mere 1 percent of a total of the United States 
foreign direct investment, and more than half of United States 
foreign direct investment in Africa is concentrated in 
extractive industries. This lack of diversification is clear in 
our trade relationships as well, with 82 percent of U.S. 
imports from Africa being concentrated in oil.
    Further diversification of our trade and investment 
relationships is important as we consider the reauthorization 
of the African Growth and Opportunity Act, hopefully well in 
advance of the expiration of the full act in 2015.
    As we all know, another critically important aspect of AGOA 
is the Third-Country Fabric Provision, set to expire in 
September. This provision, which maintains AGOA eligibility for 
apparel regardless of the fabric's country of origin, has been 
successful and has helped American companies reduce costs and 
diversify supply chains and has created tens of thousands of 
jobs, predominantly for women, in Lesotho, Swaziland, Kenya, 
Mauritius, and several other countries across the continent.
    Given the lead time required for orders, our delay in 
reauthorizing this provision has reduced new apparel orders by 
more than 30 percent. Senator Isakson and I have been working 
tirelessly with our colleagues in the Senate and House to 
ensure this passes as soon as possible, and we will not rest 
until this Third-Country Fabric Provision is renewed.
    I recently had the opportunity to travel to East Africa, 
where I experienced the impact of AGOA firsthand in Kenya. I 
visited a locally owned company called Ecosandals, which makes 
footwear from recycled materials in Mathare Valley, one of the 
poorest parts of Nairobi. Ecosandals and companies like it are 
able to export their products to customers in the United States 
because of the opportunities AGOA provides.
    At the same time, we have to work in partnership with 
African countries to expand United States trade to Africa and 
must continue to urge African countries to strengthen 
institutions and lift barriers of trade, such as poor 
infrastructure and transportation, as well as occasional bans 
on products such as poultry, which both Senator Isakson and I 
are well familiar with and quite fond of.
    Lifting tariff and nontariff barriers will not only benefit 
Africa's global trading partners, but it will also increase 
intraregional trade, which accounts for only 11 percent of 
total trade on the continent and must be improved.
    In conclusion, I welcome the administration's recently 
released U.S. Strategy Toward Sub-Saharan Africa. It defines a 
key goal of U.S. policy, the acceleration of economic growth, 
including through trade and investment; outlines goals, 
including promoting and enabling environment for trade and 
investment; improving economic governance; promoting regional 
integration; expanding African capacity to access global 
markets; and encouraging United States companies to trade with 
and invest in Africa. This next visual is those highlighted 
points.
    As we look beyond words toward implementation of this 
strategy, I look forward to hearing from our witnesses about 
how these goals can be accomplished. Specifically, how 
coordination can be improved among the 10 key U.S. Government 
agencies highlighted here, each with a role in improving and 
developing our relations with Africa in economics and trade.
    I also hope our strategy aims to eliminate policy 
inconsistencies, such as plans by the Department of Commerce to 
reduce the Foreign Commercial Service presence on the continent 
just as it is poised for significant growth.
    I want to thank our panel for appearing today and now turn 
to Senator Isakson for his opening statement.

           OPENING STATEMENT OF HON. JOHNNY ISAKSON, 
                   U.S. SENATOR FROM GEORGIA

    Senator Isakson. Well, thank you, Chairman Coons.
    And I welcome Secretary Carson, Mr. Gast, Ms. Liser. Thank 
you for being here today.
    This is a very appropriate topic for us to talk about. 
Trade with Africa is important for Africa, but it is equally 
important for the United States of America. I think our country 
has done a tremendous job in opening the door to develop more 
opportunity in terms of trade and has focused on things like 
Millennium Challenge compacts to really open up the opportunity 
for more investment and more interaction between our country 
and the countries in Africa.
    As I might note, with some of the changes that it has 
fostered, there has been less corruption, more democratic 
institutions, and more discipline in terms of dealing with them 
in trade issues. I was very proud to see that the Millennium 
Challenge extended their compact with Malawi here recently 
because of the change in leadership there. It put back some of 
the institutions that were so important to have a movement 
toward free and fair trade.
    My concern about Africa and trade is the following: I think 
the continent has a tremendous opportunity and, with its 
discovery of petroleum and natural gas, has the money coming in 
to do remarkable things. But it also could end up going the way 
of the Middle East and suffer from the Dutch disease, where it 
has a singular source of great wealth, being a natural 
resource, but doesn't invest it in its people, in businesses, 
and in employment and, therefore, becomes a prisoner of its own 
wealth.
    Africa, I hope, will go the other direction, and I think 
the United States, more so than any other country on the face 
of this earth, has the opportunity to be their partner in 
becoming a diversified economic continent for the people of 
Africa.
    So, Mr. Chairman, I commend you on calling this forward 
today. I commend Secretary Carson on his many initiatives and 
his efforts that he has made, what USAID has done to develop 
relationships on the continent of Africa, and the Millennium 
Challenge Corporation for the work that they are doing. Those 
are the steps that we need to do to accomplish an expansion of 
trade and economic development between our two countries.
    And I will look forward to the testimony of our witnesses.
    Senator Coons. Thank you, Senator.
    We now turn to our panel. If you would, Assistant Secretary 
Carson.

   STATEMENT OF HON. JOHNNIE CARSON, ASSISTANT SECRETARY FOR 
   AFRICAN AFFAIRS, U.S. DEPARTMENT OF STATE, WASHINGTON, DC

    Ambassador Carson. Mr. Chairman, thank you very, very much.
    Ranking Member Isakson, thank you as well for your strong 
commitment and support that you show toward our policy toward 
Africa and also for this hearing.
    Thank you for providing me with an opportunity to address 
the committee on what I feel is an important and timely topic.
    The United States Government is committed to expanding 
trade and investment in sub-Saharan Africa, and the numbers 
show our commitment. It is my firm belief that Africa 
represents the next global economic frontier. Sub-Saharan 
Africa continues to weather the global economic crisis more 
successfully than other regions.
    In addition to hosting 6 of the 10 fastest-growing 
economies in the world, a recent McKinsey study documented that 
Africa offers the highest rate of return on foreign investment 
of any developing region and has for some years. Consumer 
spending continues to rise, and 43 percent of Africans 
currently have discretionary income or could be considered 
middle-class consumers.
    Africa's economic growth story goes deeper than just a boom 
in the exports of natural resources. Over the past decade, 
Africa's growth was widespread across sectors including 
wholesale and retail trade, transportation, telecommunications, 
and including manufacturing. Foreign direct investment, or FDI, 
in Africa has also seen tremendous growth. FDI projects into 
Africa have more than doubled from 339 in 2003 to 857 in 2011.
    Intra-African investment has grown sharply, increasing from 
27 projects in 2003 to 145 in 2011. And natural resources will 
continue to generate significant revenues as well.
    At current prices, the total value of American resource 
production could grow to $540 billion by 2020. In short, Africa 
is a trade and investment destination that cannot be ignored, 
and we are determined to do more in this area.
    The second pillar of President Obama's recently announced 
U.S. Strategy Toward Sub-Saharan Africa directs the 
administration to spur economic growth, trade, and investment 
in sub-Saharan Africa. This new approach recognizes that it is 
in the interests of both United States and our African partners 
to improve the region's trade competitiveness, to encourage the 
diversification of exports beyond natural resources, and to 
ensure sustained economic growth, which benefits all sectors of 
society.
    This new strategy elevates economic growth, trade, and 
investment issues by calling for increased U.S. focus on 
promoting and enabling environment for trade and investment, 
improving economic governance, promoting regional integration, 
expanding African capacity to effectively access and benefit 
global markets, and also to encourage U.S. companies to trade 
with, and invest in, Africa.
    I would like to highlight a few of the programs that we in 
the Bureau of African Affairs and the Department of State are 
supporting and promoting. The African Growth and Opportunity 
Act continues to be the centerpiece of our trade policy with 
sub-Saharan Africa. It is Africa's most important vehicle for 
market access, and its unilateral trade preferences have 
created enormous goodwill for the United States across the 
continent.
    We hope the Congress will pass the AGOA Third-Country 
Fabric Provision, which expires in September, and we appreciate 
enormously the commitment shown by the members of this 
committee in support of that legislation. It is greatly 
appreciated. This legislation has brought bipartisan support 
and has been a key to the revitalization and growth of Africa's 
textile industry.
    The uncertainty about the renewal of the third-country 
provision has also been felt. In our globally linked world, 
American buyers place orders 6 to 9 to 12 months ahead. Ninety-
five percent of AGOA apparel and textile exports enter under 
the Third-Country Fabric Provision, and the AGOA Third-Country 
Fabric Provision is the only way that African textiles and 
apparel companies can remain competitive with the larger 
overseas producers.
    Without this key legislation, jobs will continue to 
disappear in some of Africa's most vulnerable economies, 
affecting primarily women and families that they support.
    In addition to AGOA, we continue to actively educate, 
inform, and encourage United States companies to be more active 
in the African marketplace. This is a continent on the move, 
and there are enormous opportunities for United States 
companies to enter the market, make money, and create jobs for 
Americans here at home, as well as to expand our trade with 
Africa.
    In February of this year, I had the opportunity to lead a 
trade mission to Mozambique, Tanzania, Nigeria, and Ghana with 
some 10 U.S. energy companies ready to do business. A lack of 
reasonably priced and reliable power remains one of the most 
binding constraints to economic growth throughout Africa.
    Governments across the continent are working to attract new 
trade and foreign investment that will sustain their rapid 
economic growth and build their middle classes. The goal of 
this mission was to highlight opportunities for United States 
companies and help address a glaring need for increased power 
and electricity in the infrastructure sector in Africa.
    The mission was a success, and a number of these United 
States companies concluded partnership agreements with African 
companies to jointly develop power projects. Ex-Im Bank and 
USTDA representatives also participated in this mission to 
ensure that both the United States participants and our African 
partners were fully aware of United States financing options.
    We are in the process of putting together a trade mission 
to accompany Secretary of State Clinton when she travels to 
South Africa later this year. In addition, I plan to lead a 
similar trade mission in the future.
    In our continuing efforts to educate and encourage U.S. 
companies to pursue commercial opportunities on the continent, 
last week, the State Department, in collaboration with the 
Department of Commerce's U.S. Export Assistance Center in 
Cincinnati, the Department of Transportation, the Export-Import 
Bank, USTDA, USAID, USTR, and several other U.S. Government 
agencies, hosted a United States-Africa business conference in 
Cincinnati, OH.
    This conference attracted over 400 participants, including 
African Government officials and representatives from the 
United States and African private sectors and civil society. 
The United States-Africa business conference expanded on the 
AGOA Forum infrastructure theme by focusing on infrastructure 
development, including energy, transportation, water, and 
sanitation. It showcased United States business expertise to 
potential African clients and highlighted trade and investment 
opportunities in Africa to United States exporters and 
investors through structured networking opportunities with 
African Government officials and business leaders.
    We also organized site visits to United States companies 
and research facilities in the Cincinnati, OH, area to 
highlight potential new technologies, products, and services 
that could be useful for African Governments and businesses in 
growing their economies.
    We also have developed two very popular programs which 
develop business capacity in Africa, the African Women's 
Entrepreneurship Program and the President's Young African 
Leaders Initiative. This year, delegates from both of those 
programs participated in both our African Growth and 
Opportunity Forum and the U.S. business conference events in 
Cincinnati.
    However, there are still many barriers that stand in the 
way of American companies that hope to do business across the 
continent. In many places, corruption is too common. The cost 
of finance, including investment finance, remains too high. 
Infrastructure, including the absence of reliable power, is 
inadequate or nonexistent, and regulatory systems are often 
inconsistent and inefficient.
    Many United States businesses also see African markets as 
too risky. We, on our part, must work to break the stereotype 
of Africa as being a single country filled with conflict, 
misery, and humanitarian disaster. We have to focus on Africa's 
enormous economic potential and promise, and we must encourage 
American investors to take advantage of this potential.
    We work closely with African Governments so that they will 
continue to enact the kinds of reforms to support improved 
investment climates, which will attract both domestic and 
foreign investment. In addition, we continue to highlight 
opportunities for trade and investment in the region for U.S. 
companies and to work with them to conclude deals.
    Our work with General Electric Transportation in Ghana on 
the locomotive tender where GE was ultimately able to win a 
$200 million deal in U.S. content is but one example of the 
things that we are doing in the African Bureau and at the 
Department of State to support and encourage American business 
activities overseas.
    We believe increased trade between the United States and 
Africa is in the interest of Africa and also in the interest of 
the United States, and we are determined to do our best to grow 
that investment and to strengthen the economic links that exist 
between the United States and sub-Saharan Africa.
    We are confident that the United States can compete 
effectively in Africa, but we have to continue to encourage 
American companies to go to the continent, and we have to 
encourage African countries to continue to make their 
regulatory and business environments more conducive for 
American companies. Greater United States-Africa trade is in 
the interest of both America and Africa, and we are determined 
to work to strengthen it.
    Mr. Chairman and members of the committee, I want to thank 
you for the opportunity to appear before you today. I think 
this is, indeed, a very important topic and worthy of our 
efforts.
    Thank you.
    [The prepared statement of Ambassador Carson follows:]

            Prepared Statement of Ambassador Johnnie Carson

    Mr. Chairman and members of the committee, thank you for providing 
me with the opportunity to address the committee on what I feel is an 
important and timely topic. The U.S. Government is committed to 
expanding trade and investment in sub-Saharan Africa and the numbers 
show our commitment. U.S. trade to and from Africa has grown 
significantly in the past 10 years. U.S. exports to sub-Saharan Africa 
tripled from just under $7 billion U.S. dollars in 2001 to over $21 
billion dollars in 2011.
    As Secretary of State Clinton said at the annual AGOA Forum 2 weeks 
ago: ``12 years ago, the United States passed the Africa Growth and 
Opportunity Act because we believed that the countries of Africa had 
tremendous untapped economic potential that could and should be 
developed. We shared a vision with many of you of a future in which 
economic growth in Africa would fuel growth and prosperity worldwide . 
. . trade and investment would multiply . . . and people across the 
continent would have new opportunities to start their own businesses, 
earn higher salaries, improve their lives, and lift the fortunes of 
their families and communities.''
    In large part, this vision is becoming reality. It is my firm 
belief that Africa represents the next global economic frontier. Sub-
Saharan Africa continues to weather the global economic crisis more 
successfully than other regions, and is home to 6--and soon to be 7--of 
the 10 fastest growing economies in the world. A recent McKinsey study 
documented that Africa offers the highest rate of return on foreign 
investment of any developing region and has for some years now. 
Consumer spending continues to rise, and 43 percent of Africans 
currently have discretionary income or could be considered middle-class 
consumers.And a growing middle class is a market for American 
products--from ipads to Pampers to Caterpillar tractors which increase 
crop yields to GE turbines which create additional hours of on-grid 
electricity to Boeing airliners which facilitate African countries' 
growing links with each other and with other continents.
    However, we can do more. Africa's recent economic growth is 
impressive but the region still only accounts for approximately 2 
percent of global trade. The second pillar of President Obama's 
recently announced U.S. Strategy Toward Sub-Saharan Africa directs the 
administration to ``spur economic growth, trade, and investment in sub-
Saharan Africa.'' This new approach recognizes that it is in the 
interest of both the United States and our African partners to improve 
the region's trade competitiveness, encourage the diversification of 
exports beyond natural resources, and ensure sustained economic growth 
which benefits all sectors of society.
    This new strategy elevates economic growth, trade, and investment 
issues by calling for increased U.S. focus to (1) promote an enabling 
environment for trade and investment ; (2) improve economic governance; 
(3) promote regional integration; (4) expand African capacity to 
effectively access and benefit from global markets; and (5) encourage 
U.S. companies to trade with and invest in Africa.
    In addition to the President's new U.S. Strategy Toward Sub-Saharan 
Africa, our efforts to increase our commercial engagement in Africa are 
firmly in line with Secretary Clinton's global focus on Economic 
Statecraft. The State Department's economic statecraft policy harnesses 
the forces of global economics to advance our diplomatic agenda and 
puts the tools of our diplomacy to work to meet our economic goals. We 
are committed to using every opportunity available to advance not only 
diplomatic and political priorities but our economic and commercial 
goals as well. I would like to highlight a few of the programs that the 
Bureau of African Affairs has been working on as we shift our economic 
orientation toward Africa from focusing almost exclusively on 
development assistance to promoting sustained economic growth through 
private sector, commercial, trade and investment activities.
    The African Growth and Opportunity Act continues to be the 
centerpiece of our trade policy with sub-Saharan Africa. It is Africa's 
most important vehicle for market access and its unilateral trade 
preferences have created enormous goodwill for the United States on the 
continent. As you know, many African countries are not taking full 
advantage of the benefits of AGOA. However, some AGOA beneficiary 
countries take good advantage of the provisions for fabric and apparel 
product lines. The Third-Country Fabric Provision component of AGOA was 
designed to provide an opportunity for AGOA-qualified countries to be 
more competitive in labor intensive textile processes such as sewing, 
stitching, and cutting fabric.
    It was widely recognized that most African countries were not able 
to compete in the more capital intensive process of producing fabric 
from raw cotton. African manufacturers have successfully used the AGOA 
Third-Country Fabric Provision to create jobs, not just in the 
manufacturing countries but have used this provision to create cross-
border pan-African supply chains. These supply chains also encourage 
regional integration--one of our key goals for the continent. Fabric 
and apparel exports are the second-largest AGOA export after extractive 
industry products. However, these imports still account for less than 2 
percent of U.S. imports.
    I'd like to say a few words about what is likely to happen if 
third-country fabric legislation is not renewed. In our globally linked 
world, American buyers place orders 6 to 9 to 12 months ahead. Ninety-
five percent of AGOA apparel and textile exports enter under the third-
country provision. And the AGOA Third-Country Fabric Provision is the 
only way that African textile and apparel companies can remain 
competitive with larger producers such as China, Vietnam, and 
Bangladesh.
    Without our help, jobs will continue to disappear in some of 
Africa's most vulnerable economies, affecting primarily women and the 
families they support. Eighty-five percent of these imports come from 
just four countries: Lesotho, Kenya, Mauritius, and Swaziland. I know 
that diplomats from these countries have come to see you to emphasize 
the disproportionate effect that lack of renewal of this provision will 
have on their economies.
    The effects of the loss of orders are troubling. At the AGOA Forum, 
the Swazi Minister for Trade told AGOA delegates that the loss of the 
provision will ``shut the country down.'' The textile and apparel 
sector is the largest formal sector employer with over 15, 000 jobs and 
employment is already 41 percent in this small, landlocked country. 
Loss of just one of these jobs means that 10 people lose their 
livelihood, since Swazi officials calculate that each textile job 
directly supports 10 people. Lack of orders have already led to plants 
closures in Namibia, robbing people of their legitimate livelihoods and 
governments of much-needed tax revenues. The Mauritians report that 
their orders are down 30 percent since January due to the uncertainty 
whether this provision will be renewed in a timely fashion.
    Madagascar's loss of AGOA eligibility in 2009 is a possible model 
of what could happen if this provision were to expire. Prior to its 
loss of AGOA eligibility, Madagascar was one of the top textile 
producing countries in Africa, exporting over $2050 million in textiles 
in 2007. Due to 2009 coup, the Government of Madagascar lost all AGOA 
benefits, including the textile provision. Apparel exports plummeted by 
$150 million in 2010. This more than $150 million drop in textile 
exports resulted in the loss of 50,000 jobs which will more than likely 
never return.
    We continue to actively educate, inform, and encourage U.S. 
companies to be more active in Africa. This is a continent on the move 
and there are enormous opportunities for U.S. companies to enter the 
market, make money, and create jobs for Americans here at home.
    In February, I led a trade mission to Mozambique, Tanzania, 
Nigeria, and Ghana with 10 U.S. energy companies ready to do business. 
A lack of reasonably priced reliable power remains one of the most 
binding constraints to economic growth throughout Africa. Governments 
across the continent are working to attract new trade and foreign 
investment that will sustain their rapid economic growth and build 
their middle class. The goal of this mission was to highlight 
opportunities for U.S. companies and help address a glaring need for 
increased power sector infrastructure in Africa. The mission was a 
success and a number of these U.S. companies concluded partnership 
agreements with African companies to jointly develop power projects. 
Ex-Im Bank and USTDA representatives also participated in the mission 
to ensure that both the U.S. participants and our Africa partners are 
fully aware of U.S. financing options. We are in the process of putting 
together a trade mission to accompany the Secretary to South Africa for 
the U.S.-South Africa Strategic Dialogue. In addition, I plan to lead 
similar trade missions in the future and continue to help and encourage 
U.S. companies to be a part of the growing economic dynamism of Africa.
    In our continuing efforts to inform, educate, and encourage U.S. 
companies to pursue commercial opportunities on the continent, just 
last week, the State Department, in collaboration with the Department 
of Commerce's U.S. Export Assistance Center in Cincinnati, the 
Department of Transportion, the Ex-Im Bank, USTDA, USAID USTR, and 
several other U.S. Government agencies, hosted a U.S.-Africa Business 
Conference in Cincinnati, OH. This conference attracted well over 400 
participants, including African government officials, and 
representatives from the U.S. and African private sectors and civil 
society.The U.S.-Africa Business Conference expanded on the AGOA Forum 
infrastructure theme by focusing on infrastructure development, 
including energy, transportation, and water and sanitation. It 
showcased U.S. business expertise to potential African clients and 
highlighted trade and investment opportunities in Africa to U.S. 
exporters and investors through structured networking opportunities for 
African government officials and business leaders with U.S. state and 
local government officials and business leaders; informational sessions 
on U.S. Government opportunities and services from various federal 
agencies; and site visits to companies and research facilities 
highlighting potential technologies for Africa.
    Cincinnati was selected as the conference location for its 
potential to increase commercial partnerships with Africa at local, 
state, and regional levels given its concentration of Fortune 500 and 
1000 companies. I am pleased that the Cincinnati conference built on 
the successes of the 2010 Kansas City, MO, business conference. 
Bringing African government officials and private sector 
representatives outside of the beltway allows us to more effectively 
focus on business to business linkages.
    We also have two very popular programs which develop business 
capacity in Africa, the African Women's Entrepreneurship Program (AWEP) 
and the President's Young African Leaders Initiative. This year 
delegates from both programs participated in both our AGOA Forum and 
U.S.--Africa Business Conference events. AWEP is an outreach, 
education, and engagement initiative that targets African women 
entrepreneurs to promote business growth, increase trade both 
regionally and to the United States using AGOA, create better business 
environments, and empower African women entrepreneurs to become voices 
of change in their communities. The State Department organizes an 
annual AWEP professional exchange program for these women to improve 
their skills and has created a series of public-private partnerships 
with ExxonMobil, Intel, Vital Voices and the Cherie Blair Foundation 
for Women.
    This year's President's Young African Leaders Initiative included 
the Innovation Youth Summit and Mentoring Partnership with Young 
African Leaders and brought more than 60 participants to the United 
States for 3 weeks of professional exchange and entrepreneurial hands-
on training. This initiative encourages U.S.-Africa collaboration to 
promote business innovation, investment and corporate social 
responsibility activities in Africa.
    However, there are still many barriers that stand in the way of 
companies that hope to do business there. In many places, corruption is 
too common. The cost of finance, including investment finance, is too 
high. Infrastructure is lacking or inadequate. Regulatory systems are 
often inconsistent and inefficient. Also, many U.S. businesses see 
African markets as too risky. The perception of Africa as poverty 
filled and strife ridden persists. We work closely with African 
governments so that they will continue to enact the kinds of reforms to 
support improved investment climates which will attract both domestic 
and foreign investment. In addition, we continue to highlight 
opportunities for trade and investment in the region for U.S. companies 
and to work with them to conclude deals. Our work with GE 
Transportation in Ghana on a locomotive tender where GE was ultimately 
able to win a deal worth $200 million in U.S. content is but one 
example. We are confident that the United States can compete 
effectively in Africa, but we have to continue to encourage American 
companies to go to Africa and we have to encourage African countries to 
continue to make their regulatory and business environment more 
conducive for American business. Greater U.S.-Africa trade is in the 
interest of both America and Africa.

    Senator Coons. Thank you, Assistant Secretary.
    The Assistant Administrator, Mr. Gast.

   STATEMENT OF HON. EARL GAST, ASSISTANT ADMINISTRATOR FOR 
AFRICA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, 
                               DC

    Mr. Gast. Good afternoon, Chairman Coons, Ranking Member 
Isakson, and Senator Udall. It is my pleasure to appear before 
this subcommittee again.
    Sub-Saharan Africa is one of the fastest-growing regions in 
the world. It is home to 6 of the world's 10 fastest-growing 
economies. Foreign direct investment is approaching $80 billion 
a year, and trade has tripled over the last decade.
    This fortune is not the result of good luck. It is the 
result of years of hard work and better management, governance, 
capital in-flows, and business climate. Yet Africa's growth has 
not translated into transformational development and poverty 
reduction, which is why two of the pillars of President Obama's 
recently unveiled strategy toward Africa are promoting 
opportunity and development and spurring economic growth, 
trade, and investment.
    The African Growth and Opportunity Act, AGOA, has been the 
cornerstone of our efforts to foster the next generation of 
emerging markets, and it is working. Since 2001, exports under 
AGOA have increased more than 500 percent, and the African 
Coalition on Trade estimates that as many as 1.3 million jobs 
have been created indirectly by AGOA, supporting upward of 10 
million persons throughout the continent.
    Many of these jobs are held by women, a vital building 
block for development, given that African women are more likely 
to invest job-related income into food security, health, and 
education of their families. In addition, there is a 
significant relationship between trade and development. Every 
dollar that we invest in trade competitiveness--aid for trade--
is associated with a $42 increase in the value of developing 
country exports within 2 years.
    At the AGOA Forum earlier this month, USAID and the U.S. 
Geothermal Energy Association publicly announced their 
partnership to help develop East Africa's geothermal resources. 
The extensive geothermal resources found along the Rift Valley 
not only have the potential to provide clean power for African 
economies, but also a significant spur for investment and 
cooperation between United States and African energy companies.
    USAID's newest trade and investment initiative, the African 
Competitiveness and Trade Expansion Initiative, ACTE, is 
furthering the progress and partnerships of AGOA. Through 
USAID's three trade hubs, ACTE focuses on the role that African 
Governments, business, and civil society play in advancing 
regional and international trade.
    USAID's trade hubs have been successful in developing best 
practices in customs procedures, processes, and technology. 
Combined, these initiatives have reduced the time, cost, and 
redtape long associated with trading in Africa.
    Working in tandem with ACTE, the U.S. Government's 
Partnership for Growth aligns broader U.S. priorities for trade 
and investment with countries that have a proven positive track 
record in policy and development, while our Private Capital 
Group for Africa is helping to deploy agency resources and 
tools to leverage private investment.
    One early success under the Private Capital Group for 
Africa was the launch of the Partners Forum, a group of U.S. 
industry leaders who advise on how to best engage for the 
private sector and align business and development goals. They 
provide invaluable insight into how to operate, and the process 
is cementing our commitment to continuous engagement with the 
private sector to identify where priorities align and 
partnerships are possible.
    The New Alliance for Food Security and Nutrition, launched 
by President Obama last month at the G8 summit, is an important 
piece of this effort that seeks to boost responsible private 
sector investment and facilitate greater partnership among 
African governments, donors, and the private sector. So far, 48 
companies have pledged to invest over $3 billion across the 
agricultural value chain, a commitment that has the potential 
to improve the lives of millions of small farmers.
    This kind of inclusive economic growth, trade, and 
investment is imperative to achieving lasting, durable 
development. USAID will bring to bear all of its strengths, 
catalyzing growth through public-private partnerships, 
leveraging private capital and investment, harnessing on-the-
ground and industry knowledge, and leveling the playing field 
for domestic and international entry to implement the 
administration's strategy toward Africa.
    Thank you for inviting me to speak with you today on this 
critical issue, and I welcome any questions you might have.
    [The prepared statement of Mr. Gast follows:]

                   Prepared Statement of Earl W. Gast

    Good morning Chairman Coons, Ranking Member Isakson, and members of 
the subcommittee. It is my pleasure to appear before you again.
    Sub-Saharan Africa is one of the fastest growing regions in the 
world. In 2011, it was home to 6 of the world's 10 fastest-growing 
economies. Foreign direct investment is approaching $80 billion a year, 
and trade has tripled over the last decade. Consumer spending is set to 
rise 80 percent by 2020 and Africa now has a fast-growing middle class, 
expected to increase from 60 million to 100 million people by 2015.
    The continent's fortune is not the outcome of good luck. It is the 
result of years of hard work and better macroeconomic management; 
improved economic and political governance; a reduction in armed 
conflicts; increasing foreign capital inflows, particularly direct 
investment; and improvements in the business climate.
    The President's strategy toward sub-Saharan Africa, released June 
14 to coincide with the African Growth and Opportunity Act (AGOA) 
Forum, renews our emphasis on spurring economic growth, trade, and 
investment in Africa, including promoting an enabling environment for 
trade and investment, regional integration, improved economic 
governance and expanded African capacity to trade. As America supports 
the development of Africa's economic growth, it can generate new export 
markets and tap into a common market that could one day outpace India 
or China.
    Yet the commodity boom in resource-rich countries has not yet 
succeeded in generating strong, positive, economywide spill-over 
effects to other sectors or neighboring countries. And resource-poor 
states remain on the sidelines, constrained by their inability to 
mobilize domestic resources as well as attract external resources--
apart from official aid flows that sustain a minimum level of 
investment that prevents the development process from stalling 
altogether. Their small, expensive markets keep them isolated from the 
dynamic changes occurring from globalized markets. Domestic firms often 
miss out on technical expertise, technology transfer, and productivity 
gains from foreign direct investment. Market informality and a limited 
tax base limit many countries' domestic resource base.
    Nor has Africa's growth translated into meaningful development and 
poverty reduction. Basic infrastructure lags far behind that of other 
developing regions; the African Development Bank estimates that 
inadequate infrastructure suppresses Africa's per capita growth rate by 
as much a 2 percentage points a year. Political fragility, ethnic 
conflict, and food insecurity plague even the most stable economies 
such as Kenya and South Africa.
    Trade openness has been instrumental in the remarkable economic 
growth in East and Southeast Asia. But Africa has not seen these same 
benefits; the continent's share in world trade has declined from around 
6 percent 25 years ago to approximately 2 percent today. Intra-African 
trade is not faring much better. More than 80 percent of Africa's 
exports are destined for markets outside of Africa; as a contrast, 40 
percent of North American trade occurs with other North American 
countries and 63 percent of Western European trade is among other 
Western European nations.
    A recent World Bank report concluded that the continent is losing 
billions of dollars in potential trade earnings every year because of 
high trade barriers with neighboring countries. Procedures and 
regulations vary by country, which, coupled with a lack of 
infrastructure, significantly increases the time and cost required to 
ship goods across borders. In some cases, it is less expensive to ship 
a container of goods to Nairobi from Europe than from Lagos. The 
implications are far-reaching: huge opportunities are lost for 
specialization and value addition. Production and export structures 
oriented to primary commodities--minerals, timber, coffee, cocoa, oil, 
gas--often come at the cost of high-value products that would provide 
broad-based benefits and create jobs.
    Many African governments recognize the detrimental impact of high 
trade barriers. Throughout the continent, they are working to build 
bridges across geographical boundaries to create important economic 
trade regions. Although regional agreements vary, and often overlap, 
all have the goal of reducing complicated trade barriers among member 
countries. African regional economic communities have launched various 
trade liberalization initiatives to stabilize and remove barriers to 
trade, harmonize customs duties and internal taxes, facilitate trade 
through information and promotional services and abolish restrictions 
to the movement of people, goods, services, and investments across 
borders.
    AGOA is the cornerstone of the U.S.-Africa commercial relationship, 
and is the most generous bilateral trade legislation the United States 
has ever enacted. AGOA is a key tool in U.S. efforts to foster 
development of the next generation of emerging markets, which includes 
building effective trading partnerships between the United States and 
the countries of sub-Saharan Africa. It provides substantial trade 
preferences that, along with those under the Generalized System of 
Preferences and Most-Favored Nation tariff treatment, allow almost all 
goods produced in the AGOA-eligible countries to enter the U.S. market 
duty-free. AGOA offers tangible incentives for African countries to 
continue their efforts to open their economies and build free markets. 
Promoting prosperity, open markets, and good governance in Africa 
through programs like AGOA, has improved the trade environment for both 
U.S. and African businesses and spurred economic growth.
    It has worked. Since 2001, exports under AGOA have increased more 
than 500 percent, from $8.15 billion in 2001 to $53.8 billion in 2011. 
About 90 percent of these exports have been oil, which underscores 
Africa's growing strategic importance to the United States. At the same 
time, under AGOA, the volume of nonenergy exports to the United 
States--that critical engine for growth in jobs and economic 
development in Africa--has increased 275 percent, from $1.2 billion to 
$4.5 billion between 2001 and 2011. Paul Ryberg, the president of the 
African Coalition on Trade, which has companies and trade organizations 
in 19 African countries, estimates that as many as 1.3 million jobs 
have been created indirectly by AGOA, supporting up to 10 million 
people. Many of these jobs are held by women--a vital building block 
for development given that African women are more likely to invest job-
related income in the food security, health, and education of their 
families.
    In May 2011, the U.N. Economic Commission for Africa conducted a 
survey in Africa of AGOA's benefits. Three-quarters of the responding 
companies viewed AGOA as ``very important'' (58 percent) or 
``important'' (17 percent). Seventy-five percent of the companies 
indicated that AGOA had contributed to job creation and capacity-
building, and a majority of the respondents emphasized the importance 
of business support services, such as greater technical assistance for 
conforming with Sanitary and Phytosanitary Standards, and promoting 
African products in the U.S. market.
    Trade capacity-building has been central to USAID's work to achieve 
our development objectives on the continent, particularly the 
realization of the Millennium Development Goals (MDGs). MDG 1, to 
eradicate extreme hunger and poverty, is furthered by achieving full, 
productive, decent employment for all, especially women and young 
people. Trade and trade agreements increase productive, value added 
employment opportunities beyond what a self-contained, subsistence 
economy can provide. It also reduces the proportion of people who 
suffer from hunger, because free trade, in the context of sound 
agricultural policy and global integration, balances the differences in 
natural endowments and labor productivity. Trade also contributes to 
MDG 8, to develop a global partnership for development, by nurturing an 
open, rule-based, predictable, nondiscriminatory trading and financial 
system.
    Additionally, there is an unavoidable link between the 
international trading regime and the enjoyment of human rights. The 
U.N. Office of the High Commissioner for Human Rights has found that 
economic growth through free trade increases the resources available 
for the realization of human rights. Countries do not qualify for AGOA 
unless they are determined to have established, or made continual 
progress toward establishing the rule of law and political pluralism; 
combating corruption; enacting policies to reduce poverty and increase 
the availability of health care and educational opportunities; 
protecting human rights and worker rights; and eliminating certain 
child labor practices.
    An extensive study--``From Aid to Trade: Delivering Results''--
conducted in November 2010 found a statistically significant 
relationship between USAID trade capacity-building obligations and 
developing country export. Specifically it found that an additional $1 
of USAID trade competitiveness assistance is associated with a $42 
increase in the value of developing county exports within 2 years. In 
addition, USAID support for trade and investment in Africa provides a 
significant contribution to trade negotiations conducted by the U.S. 
Trade Representative.
    Over the past 10 years, USAID programs have improved the enabling 
environment for U.S. trade with sub-Saharan Africa; empowered African 
small and medium-sized enterprises to increase their exports to U.S., 
regional, and international markets; and facilitated regional economic 
integration. Between 2006 and 2010, USAID's African Global 
Competitiveness Initiative supported over $5 billion in nonpetroleum 
exports; leveraged $2.8 billion for energy, information and 
communication technologies, and transportation infrastructure, 
resulting in over 1.35 million Africans gaining access to the Internet.
    At the regional level, USAID efforts for an improved enabling 
environment have helped to advance cross-border integration and boost 
intra- and extra-regional trade--work primarily carried out by USAID's 
three Trade Hubs located in Botswana, Ghana, and Kenya. These Hubs have 
implemented innovative and important initiatives to reduce both legal 
and illicit bottlenecks along major trade corridors, establish single 
border posts, and computerized customs procedures.
    An analysis by the Organization for Economic Cooperation and 
Development and the World Trade Organization in 2011 concluded that 
USAID's Trade Hubs had been largely successful in developing best 
practices in customs procedures, processes, and technology. They have 
helped speed up customs clearances in Mozambique, improved customs 
procedures in Southern Africa, and established a model for regional 
economic commissions to harmonize standards, monitor compliance with 
trade protocols, and facilitate the analysis of technical trade issues. 
Combined, these initiatives have reduced the time, cost, and redtape 
long associated with trading in Africa.
    USAID's Trade Hubs count many successes. The Southern Africa Trade 
Hub's efforts to extend border operating hours along the Trans Kalahari 
Corridor, introduce a single customs declaration, and implement a 
corridor performance management system, contributed to an increase in a 
twelvefold usage of the corridor and a reduction in travel time from 72 
to 48 hours. In East Africa, USAID support for customs reform in 2010 
resulted in the implementation of a common customs software platform 
that allows customs officials to communicate virtually across borders. 
This reduced the time it takes to transport goods along the Mombasa-
Kigali trade corridor by 5 days and reduced the cost of trading goods 
in the East Africa region by 2 percent, despite a 19.2-percent increase 
in fuel cost in 2010.
    At the Sleek Garments factory in Accra, Ghana, a sign overlooks a 
bustling assembly line of 300 workers: ``Quality First, Quantity 
Second.'' Sleek's founder and CEO, Nora Bannerman, has held to that 
philosophy since she began her career as a fashion designer 30 years 
ago. And she is determined to maintain it as Sleek shifts into mass 
production, stitching casual shirts and work uniforms for some of the 
largest retail chains in the United States. Sleek is part of Ghana's 
blossoming apparel manufacturing cluster, which has been encouraged by 
the government to relocate and build several clothing factories. Many 
of these factories export to the United States under AGOA's Third 
Country Fabric Provision, which has provided hundreds of thousands of 
jobs across sub-Saharan Africa. USAID's West Africa Trade Hub helped to 
put Ghana on the radar as an exporter of high-quality garments by 
connecting Bannerman with international buyers, providing financial 
planning services, and advising her on pre-export financing to purchase 
fabric for her orders.
    The Presitex garment company in Lesotho was growing and looking for 
ways to keep expanding its operations and was especially interested in 
taking advantage of AGOA so it could begin exporting to the United 
States. At the same time, clothing manufacturers in South Africa were 
looking for regional suppliers of textiles and other clothing inputs, 
like yarn. Presitex used to source from Asia, but, needing to reduce 
transport costs, it turned to USAID's Southern Africa Trade Hub for 
help. The Hub put Presitex in touch with a knitting mill in South 
Africa and helped them to negotiate a $1.2 million annual deal. 
Lesotho's apparel industry has grown to become especially successful 
under AGOA--at one time supporting 50,000 jobs. And regional 
integration is considered critical for the survival of Lesotho's 
apparel industry, both to maintain job opportunities in Lesotho and as 
a platform for future economic growth.
    When 24 private sector stakeholders and the USAID West Africa Trade 
Hub cofounded the African Cashew Alliance (ACA) 5 years ago, its 
mandate was simple and clear: to increase cashew processing in West 
Africa in order to create jobs and reduce poverty. The opening of six 
new major processing facilities over the last 6 months--which will 
employ as many as 5,000 people--is yet more evidence that the alliance 
is a success. The ACA today includes over 135 members from 23 
countries, including every African cashew-producing country and buyers 
and retailers from every major international market. In a recent ACA 
survey of its members found that more than 80 percent had used the 
alliance's services to grow their business.
    Bringing together every aspect of the industry has allowed 
international buyers to quickly assess the opportunities--and act. 
``None of our business in Africa would have been possible without the 
ACA,'' said Shalin Behal of IRACEMA, a leading processor from Brazil 
that has purchased millions of dollars of African cashews. ``The ACA 
has introduced us to all the key players in the region, facilitated 
field trips and all our first steps in doing business here.'' The 
impacts in the communities where the processing facilities are located 
are significant. Residents of a town in Cote d'Ivoire said 
prostitution, once a problem in the community, had all but disappeared 
once the factory opened. This was attributed to the hundreds of jobs 
that were created for young women--some of the almost 10,000 cashew 
processing jobs ACA has created in West Africa.
    Under the President's new Strategy toward sub-Saharan Africa, 
USAID's work will capitalize on Africa's steadily rising middle class 
and burgeoning opportunities, particularly in finance and 
infrastructure, to promote U.S. trade and investment in the region. 
USAID is uniquely positioned to take a major role in the implementation 
of the President's strategy, particularly spurring economic growth, 
trade and investment. Staff in both Washington and the field have a 
deep knowledge of the African economic scene, both in terms of 
macroeconomic conditions and in terms of what businesses need to be 
successful in Africa. USAID has supported macro and micro policy 
reform, key to accelerating growth; built the capacity for policy 
analysis in both government and the private sector; and strengthened 
various institutions of economic governance such as bank supervision, 
tax collection, and commercial courts.
    Many of USAID's programs have focused on analyzing the constraints 
to private sector development and to helping remove existing obstacles, 
both directly and through empowering businesses and business 
associations to bring the obstacles they face to the attention of their 
governments. USAID also has strong relationships with both the U.S. and 
African business communities; USAID implements a number of programs 
that provide information and link U.S. investors to opportunities in 
Africa, including the Africa Infrastructure Program. It provides 
specialized advisors to African governments to address legal, 
financial, regulatory, and other constraints preventing private sector 
investment in energy infrastructure. In the past 3 years alone, these 
efforts have leveraged over $700 million in private sector investment 
in the energy sector, with an emphasis on clean energy.
    USAID's newest trade and investment initiative--the African 
Competitiveness and Trade Expansion (ACTE) Initiative, announced in 
2011--is furthering the progress USAID has made, and supports the 
President's new U.S. Strategy toward sub-Saharan Africa. Through 
USAID's three Trade Hubs, ACTE focuses on the role African governments, 
businesses, and civil society play in advancing regional and 
international trade, increasing the international competitiveness of 
key value chains, and promoting trade and investment between the United 
States and Africa and within Africa.
    USAID established the Private Capital Group for Africa (PCGA) in 
2011 to help deploy Agency resources and tools to leverage private 
investment. For every U.S. assistance dollar, PCGA activities are 
anticipated to leverage $30 in private capital to support key 
development goals. For example, in West Africa we are supporting the 
formation of a lending company to be coowned by U.S. companies to 
support supply chains in the region. We are also working to link a U.S. 
investment company with Kenyan pension funds to coinvest in small and 
medium-sized enterprises in Africa. With just an $18 million investment 
from USAID, this partnership has the potential to catalyze over $500 
million in private funds that will support the expansion of over 500 
enterprises, provide sustainable livelihoods to over 100,000 
smallholder farmers, and support 42,000 jobs in sub-Saharan Africa. One 
of PCGA's early successes was the launch of the Partners Forum, a group 
of U.S. leaders of industry (in particular those from the investment 
sector) who provide advice on how to best engage with the private 
sector and align business and development goals. The forum represents 
our commitment to continuous engagement with the private sector to 
identify where priorities align and partnerships are possible.
    At the same time, USAID's Partnership for Growth aligns with these 
broader U.S. priorities for trade and investment among countries that 
have a proven, positive track record in policy and development. Our 
alliances with Ghana and Tanzania are generating investment and trade 
opportunities for U.S. energy companies, increasing the availability 
and consistent supply of energy for U.S. companies operating in those 
countries, supporting regional integration to develop economically 
attractive markets, and facilitating increased trade opportunities in 
Ghana.
    Looking forward, green technologies offer another promising 
opportunity to expand U.S.-Africa trade. A 2011 report by Frost & 
Sullivan--``Mega Trends in Africa: A Bright Vision for the Growing 
Continent''--suggests that investment in renewable energy in the 
continent will rise to $57 billion by 2020 as interest in wind, solar, 
and geothermal power soars. Consequently, at this year's AGOA Forum, 
USAID and the U.S. Geothermal Energy Association publicly announced 
their partnership to help develop East Africa's geothermal resources. 
The extensive geothermal sources found along the East Africa Rift 
Valley not only has the potential to provide clean power for African 
economies, but also a significant spur for investment and cooperation 
between U.S. and African energy companies. USAID plans to continue to 
make innovative public-private partnerships like this one to support 
development while also opening new markets for the U.S. investment.
    Spurring economic growth, trade, and investment, along with 
promoting opportunity and development, are two pillars of the 
President's strategy toward sub-Saharan Africa, and they are 
inextricably linked. Inclusive economic growth, trade, and investment 
are imperative to achieving lasting, durable development. USAID will 
bring to bear all of its strengths catalyzing growth through public-
private partnerships, leveraging private capital and investment, 
harnessing on-the-ground and industry knowledge, and leveling the 
playing field for domestic and international entry to implement the new 
Presidential Policy Directive on Sub-Saharan Africa.

    Senator Coons. Thank you, Mr. Gast.
    Ms. Liser.

      STATEMENT OF FLORIZELLE LISER, ASSISTANT U.S. TRADE 
      REPRESENTATIVE FOR AFRICA, OFFICE OF THE U.S. TRADE 
                 REPRESENTATIVE, WASHINGTON, DC

    Ms. Liser. Chairman Coons, Ranking Member Isakson, Senator 
Udall, thank you for the opportunity to speak with you today 
about the Obama administration's strategy to encourage economic 
growth, trade, and investment in Africa. We welcome your 
interest and your active support for advancing the United 
States trade and investment relationship with sub-Saharan 
Africa.
    On June 14, 2012, President Obama approved a new 
Presidential policy directive for sub-Saharan Africa. This new 
strategy commits the United States to be proactive in the face 
of the numerous challenges and opportunities facing sub-Saharan 
Africa. In particular, it directs the United States to expand 
our efforts to increase economic growth, trade, and investment 
with sub-Saharan Africa.
    USTR is part of an interagency effort building on the 
successes we have had to date and fostering sustained economic 
growth and promoting U.S. trade and investment with the 
countries of the region. AGOA, as was said, is the cornerstone 
of America's trade policy with Africa. The administration is 
committed to working with Congress toward a seamless renewal of 
AGOA beyond 2015 to provide the predictability needed for 
United States and African businesses to continue to reap the 
benefits of AGOA.
    The administration is consulting with Africa trade 
stakeholders, including Congress, African Government officials, 
United States and African private sector and civil society, on 
modifications needed to make AGOA even more effective and 
mutually beneficial. AGOA's performance and effectiveness are 
closely tied to its Third-Country Fabric Provision, which, as 
you know, is set to expire in September 2012.
    The Third-Country Fabric Provision is crucial to the 
continued survival of Africa's textile and apparel industry. It 
has generated, as was said previously, hundreds of thousands of 
jobs in sub-Saharan Africa and has helped American retailers 
reduce their costs, diversify their supply chains, and provide 
greater low-cost apparel options for U.S. consumers.
    Swift passage of legislation extending AGOA's Third-Country 
Fabric Provision is, as you know, urgently needed to ensure 
AGOA's continued success and the stability, development, and 
economic growth of sub-Saharan African countries. We applaud 
Congress' recent agreement to advance extension of AGOA's 
Third-Country Fabric Provision and appreciate the work that you 
and other members of this committee have undertaken to move 
this important provision forward.
    The annual U.S.-Sub-Saharan Africa Trade and Economic 
Cooperation Forum, also known as the AGOA Forum, 
institutionalizes a high-level dialogue on ways to foster 
stronger economic ties between the United States and sub-
Saharan Africa. The 11th AGOA Forum was held in Washington on 
June 14-15 with the theme ``Enhancing Africa's Infrastructure 
for Trade,'' and other AGO private sector and civil society 
events were held in Washington, DC, and Cincinnati.
    Secretary Clinton, Ambassador Kirk, Secretary LaHood, and 
other senior U.S. Government officials, Members of Congress, 
African trade, finance, and foreign affairs ministers, African 
ambassadors, and our private sectors and civil societies 
participated in this year's forum to advance the United States-
Africa trade and investment relationship.
    Thanks to you, Chairman Coons, and to you, Senator Isakson, 
in particular for attending the forum and meeting with the 
ministers to discuss AGOA impending legislation. It was truly 
appreciated by them.
    USTR also coordinates and leads the interagency engagement 
with our sub-Saharan African partners on trade and investment 
issues under our trade and investment framework agreements, our 
TIFAs. The United States has 11 TIFA partners in sub-Saharan 
Africa, and we also have a trade, investment, and development 
cooperative agreement with the five countries of the Southern 
African Customs Union.
    In addition, the Obama administration is pursuing a new 
trade and investment partnership with the five countries of the 
East African community, which is one of the most cohesive and 
ambitious regional economic groupings in sub-Saharan Africa.
    At a recent meeting which Ambassador Kirk and senior 
administration officials held with the EAC Secretary General 
and trade ministers, the United States and the EAC agreed to 
explore under the partnership a regional investment treaty--
this would be new--a trade facilitation agreement, and 
continued U.S. trade capacity-building assistance, as well as a 
commercial dialogue.
    These agreements and other activities under this 
partnership will help to promote EAC regional integration and 
economic growth and to expand and diversify U.S.-EAC trade and 
investment.
    Also in our toolbox in terms of improving the 
attractiveness of an economy's investment climate, perhaps none 
is more powerful than an investment treaty. These agreements 
establish a framework of reciprocal protections that include 
nondiscriminatory treatment; free transfer of investment-
related funds; prompt, adequate, and effective compensation in 
the event of an expropriation; and transparency in government.
    Our most recently concluded BIT was with Rwanda, and we 
hope that our most recently launched BIT negotiation with 
Mauritius will conclude soon. And we are actively pursuing BIT 
discussions with other countries in the region, including 
Ghana.
    Africa presents many opportunities for United States 
businesses. It is a market not yet fully tapped and one that is 
viewed as a last frontier for many global actors, such as 
China, Brazil, India, and the European Union. No other region 
has rates of return on investment as high as Africa, and it is 
proving to be a growing investment destination, including for 
United States businesses.
    And with Africa's growing middle class, youth bulge, and 
undercapitalized entrepreneurs, including many women-owned 
SMEs, we are focused on increasing United States exports to and 
investment in Africa and fostering joint ventures that can 
benefit United States businesses, including our own SMEs. Our 
efforts growing out of the new U.S. Strategy Toward Sub-Saharan 
Africa, including a Doing Business in Africa campaign, will 
build on existing programs and initiatives, such as the 
National Export Initiative.
    In conclusion, the administration is working to strengthen 
the United States-sub-Saharan Africa trade and investment 
relationship through a range of trade and investment 
initiatives. The new U.S. Strategy Toward Sub-Saharan Africa 
builds on this strong foundation and ensures that our trade 
policy will continue to encourage economic growth, enhance 
trade and investment, support more jobs in the United States 
and Africa, and help realize the full potential of the United 
States-sub-Saharan African economic partnership.
    Thank you.
    [The prepared statement of Ms. Liser follows:]

                 Prepared Statement of Florizelle Liser

                              introduction
    Chairman Coons, Ranking Member Isakson, and other distinguished 
members of the subcommittee, thank you for the opportunity to speak 
with you today about the Obama administration's strategy to encourage 
economic growth, trade, and investment in Africa. We welcome your 
interest in, and support for, advancing the U.S. trade and investment 
relationship with sub-Saharan Africa.
          the administration's strategy for sub-saharan africa
    On June 14, 2012, President Obama approved a new Presidential 
Policy Directive (PPD) for sub-Saharan Africa. To advance U.S. 
interests in Africa, the strategy sets forth four strategic objectives: 
(1) strengthen democratic institutions; (2) spur economic growth, 
trade, and investment; (3) advance peace and security; and (4) promote 
opportunity and development.
    The new strategy commits the United States to be proactive in the 
face of the numerous challenges and opportunities facing sub-Saharan 
Africa. In particular, it directs the United States to expand our 
efforts to increase economic growth, trade, and investment. USTR is 
part of an interagency effort--building on the successes of the 
partnerships we have built in previous years--to foster sustained 
economic growth and to promote U.S. trade and investment with sub-
Saharan Africa.
            spurring economic growth, trade, and investment
    Sub-Saharan Africa is expected to grow by more than 5 percent this 
year, and between 2000 and 2010, 6 of the 10 fastest-growing countries 
in the world were in sub-Saharan Africa. Sustained economic growth has 
the potential to lift millions out of poverty and foster long-term 
stability. Today's challenge is to ensure that these gains continue and 
are spread across the continent. The administration's new strategy 
addresses these challenges by calling for increased U.S. focus to spur 
economic growth through expanded trade and investment by (1) promoting 
an enabling environment for trade and investment; (2) improving 
economic governance; (3) promoting regional integration; (4) expanding 
African capacity to effectively access and benefit from global markets; 
and (5) encouraging U.S. companies to trade with and invest in Africa.
    This approach recognizes that it is in the interest of the United 
States and our African partners to promote regional integration, create 
new trade and investment opportunities for African and U.S. firms, 
encourage the diversification of African exports beyond natural 
resources, and ensure that the benefits from growth are broad-based.
              agoa and the third-country fabric provision
    AGOA is the cornerstone of America's trade and investment policy 
with sub-Saharan Africa. AGOA's performance and effectiveness are 
closely tied to its Third-Country Fabric (TCF) Provision, which is set 
to expire in September 2012. The TCF provision is crucial to the 
continued survival of Africa's textile and apparel industry--it has 
generated hundreds of thousands of jobs in sub-Saharan Africa, 
including in least developed countries, and has helped American 
retailers reduce their costs, diversify their supply chains, and 
provide greater low-cost apparel options for U.S. consumers. Swift 
passage of legislation extending AGOA's TCF provision is necessary and 
its extension urgently needed to ensure AGOA's continued success--and 
the stability, development, and economic growth of sub-Saharan African 
countries. We applaud Congress' recent agreement to advance AGOA's 
Third-Country Fabric Provision, and appreciate the work that members of 
this committee have undertaken to move this important provision 
forward.
    Beyond apparel, AGOA is a measurable success. Total two-way trade 
between the United States and sub-Saharan Africa has increased by over 
300 percent since AGOA was enacted in 2000. U.S. imports under AGOA 
have increased by over 500 percent from 2001 (the first full-year of 
AGOA trade). Petroleum imports dominate this trade, but nonpetroleum 
AGOA trade has tripled to nearly $5 billion in 2011, spurred by 
significant growth of nontraditional, value-added products such as 
apparel, cut flowers, fruits and nuts, wines, cocoa, and footwear. AGOA 
apparel imports have doubled, and today about twice the number of 
eligible countries are shipping noncommodity goods under AGOA than they 
were a decade ago. Additionally, U.S. exports to sub-Saharan Africa 
have more than tripled since 2001. These exports support thousands of 
U.S. jobs and help African countries to modernize their economies.
    The Obama administration is committed to working with Congress 
toward a seamless renewal of AGOA beyond 2015 to provide the 
predictability needed for U.S. and African businesses, entrepreneurs, 
buyers, and investors to continue to reap the benefits of AGOA. The 
administration is consulting with Africa trade stakeholders, including 
Congress, African Government officials, U.S. and African private 
sector, and civil society representatives on modifications needed to 
make AGOA more effective and mutually beneficial.
    promoting united states-sub-saharan africa trade and investment
    As an office within the Executive Office of the President, USTR is 
responsible for coordinating and leading the interagency engagement 
with our sub-Saharan partners on trade and investment issues, including 
under our Trade and Investment Framework Agreements (TIFAs) with 
individual countries and regional organizations. U.S. TIFAs provide a 
formal mechanism for a high-level engagement to address bilateral 
issues and to help enhance United States-sub-Saharan Africa trade and 
investment relations. The United States has 11 TIFA partners in sub-
Saharan Africa: Angola, Ghana, Liberia, Mauritius, Mozambique, Nigeria, 
Rwanda, South Africa, the East African Community (EAC), the Common 
Market for East and Southern Africa (COMESA), and the West African 
Economic and Monetary Union (UEMOA). The United States also has a 
Trade, Investment, and Development Cooperative Agreement with the five 
countries of the Southern African Customs' Union (SACU).
    In addition, the Obama administration is pursuing a new trade and 
investment partnership with the EAC, which is one of the most cohesive 
and ambitious regional economic groupings in sub-Saharan Africa. At a 
recent meeting which Ambassador Kirk and senior administration 
officials held with the EAC Secretary General and Trade Ministers, the 
United States and the EAC agreed to explore under the partnership, a 
regional investment treaty, a trade facilitation agreement, continued 
U.S. trade capacity-building assistance, and a commercial dialogue. We 
are working closely with the Commerce Department to move forward on the 
commercial dialogue, which would create practical ways in which U.S. 
and EAC governments can work together and with our respective business 
communities. These agreements and other activities under the 
partnership will help to promote EAC regional integration and economic 
growth, and to expand and diversify U.S.-EAC trade and investment. They 
could also serve as building blocks toward a more comprehensive trade 
agreement over the long term.
    In the toolbox of U.S. Government initiatives to improve the 
attractiveness of an economy's investment climate, perhaps none is more 
powerful than an investment treaty. Bilateral investment treaties 
(BITs) help protect U.S. investment and help promote economic growth by 
encouraging market-based economic reform and the policies that make 
doing business in Africa more attractive for U.S. businesses. These 
agreements establish a framework of reciprocal protections that include 
nondiscriminatory treatment; free transfer of investment-related funds; 
prompt, adequate, and effective compensation in the event of an 
expropriation; and transparency in governance. U.S. BITs also give 
investors the right to bring investment disputes to neutral, 
international arbitration panels.
    The United States has BITs in force with six countries in sub-
Saharan Africa, and the region has become a locus for recent U.S. BIT 
activity. Our most recently concluded BIT was with Rwanda--an agreement 
that entered into force on January 1 of this year. We hope that our 
most recently launched BIT negotiation with Mauritius will soon 
conclude, and we are actively pursuing BIT discussions with other 
countries in the region, including with the members of the East African 
Community in the context of our EAC Partnership, and with Ghana.
    The administration recognizes the importance of African regional 
integration and intra-African trade. Facilitating intra-African trade, 
reducing barriers to such trade, and harmonizing investment and trade 
rules will build economies of scale, improve African competitiveness, 
and attract investment to the region. Thus, we are supporting African 
regional integration through a number of initiatives designed to build 
trade capacity and promote trade and investment within sub-Saharan 
Africa, strengthening regional economic communities, forging closer 
ties with the African Union, and supporting African efforts to 
establish free trade areas such as the Tripartite initiative (covering 
COMESA, the EAC, and SADC) and the recently announced Continental Free 
Trade Area (which is scheduled to be enacted by 2017).
    The annual United States-Sub-Saharan Africa Trade and Economic 
Cooperation Forum (also known as ``the AGOA Forum'') institutionalizes 
a high-level dialogue between senior officials of the United States and 
AGOA beneficiary countries, the private sector and civil society on 
ways to foster stronger economic ties between the United States and 
sub-Saharan Africa. The 11th AGOA Forum was held in Washington, DC, on 
June 14-15, 2012, with the theme, ``Enhancing Africa's Infrastructure 
for Trade,'' and other AGOA private sector and civil society events 
were held in Washington, DC, and Cincinnati. As always, the forum was 
an important opportunity to discuss the challenges in expanding the 
U.S.-African trade and investment relationship. Thanks to you Chairman 
Coons and to Senator Isakson for attending the forum and meeting with 
the Ministers to discuss AGOA and pending legislation.
    This year's focus on infrastructure was timely. According to the 
World Bank, the annual requirement for infrastructure expenditure and 
maintenance in sub-Saharan Africa is about $93 billion a year. However, 
only about $45 billion is being mobilized, leaving a gap of close to 
$50 billion annually. This significant funding gap cannot be met by 
current official sources of funding alone. Private investment could 
help close the funding gap for Africa's infrastructure. Currently, 
intra-African trade stands at less than 10 percent of African gross 
domestic product and Africa's share of world trade is only 3 percent. 
The United States is working with the international community, African 
governments and the private sector to improve Africa's hard 
infrastructure--including the roads, ports, power pools, and telecom 
networks, and Africa's soft infrastructure--such as the laws, 
regulations, and business environment that impact trade and investment 
decisions. This collaboration is critical because improvements in 
Africa's infrastructure could significantly advance our efforts to 
support regional integration, create larger markets for U.S. exports 
and promote economic growth in Africa.
                  africa as a market for u.s. business
    With the continent-wide growth mentioned earlier, Africa presents 
many opportunities for U.S. businesses. It is a market not yet fully 
tapped and one that is viewed as a ``last frontier'' for many global 
actors such as China, Brazil, India, and the European Union. No other 
region has rates of return on investment as high as
Africa, and it is proving to be a growing investment destination, 
including for U.S. businesses. And with Africa's growing middle class, 
youth bulge, and undercapitalized entrepreneurs--including many women-
owned SMEs, we are focused on increasing U.S. exports to, and 
investment in, Africa, and fostering joint ventures that can benefit 
U.S. businesses--including our own SMEs. Our efforts growing out of the 
new U.S. Strategy Toward Sub-Saharan Africa--including a ``Doing 
Business in Africa Campaign''--will build on existing programs and 
initiatives such as the National Export Initiative.
                               conclusion
    The administration is working to strengthen the United States-sub-
Saharan Africa trade and investment relationship through a range of 
trade and investment-related initiatives. The new U.S. strategy toward 
sub-Saharan Africa builds on this strong foundation and ensures that 
our trade policy will continue to encourage economic growth, enhance 
trade and investment, support more jobs in the United States and 
Africa, and help realize the full potential of the United States-sub-
Saharan Africa economic partnership.

    Senator Coons. Thank you, Ms. Liser.
    We are now going to begin rounds of 7 minutes--7-minute 
question rounds, if we could. And let me start with one of the 
elements of your testimony, Ms. Liser. AGOA, we are committed 
to reauthorization of the third-party fabric agreement, but as 
the list that was shown in the content that accompanied my 
opening statement, there is many countries that have failed to 
fully utilize AGOA.
    We saw it in Uganda, where we recently visited, that they 
simply are not taking advantage of it. Even though in the last 
dozen years, exports under AGOA have increased more than 500 
percent, they have tended to be fairly narrowly focused, either 
in textiles or in extractive industries like petroleum.
    So how are we working to strengthen participation in AGOA? 
And then what is the next step? What is the framework for 
moving forward beyond AGOA? You made some reference to BITs and 
to the emerging partnership with the EAC. How do we take the 
trade relationship between the United States and Africa, as it 
were, to the next level?
    Ms. Liser. So, first of all, speaking to the issue of the 
utilization of AGOA to date, we recognized probably some years 
after AGOA was launched that many of the products that are 
covered under AGOA were areas where or sectors where the 
Africans really had not had much experience in producing those 
products in the volumes and at the prices that were needed to 
be competitive in the United States market or, frankly, in any 
other market.
    So one of the things that has happened is that as they have 
begun to develop their industrial bases, money going into 
various sectors--not just apparel, but we are also seeing 
value-added agricultural products that are coming in, footwear, 
a number of areas, horticulture, et cetera. As they have become 
more competitive in those sectors, we actually are seeing a 
diversification of the products that are coming into the United 
States under AGOA.
    And so, we are pleased with that, but we know that there is 
a lot that is still untapped, a lot of potential that still 
needs to be realized. In terms of how we take this to the next 
level, I think there are two sides to this.
    First, on the African side, I think as was said earlier, 
they have to keep doing what they are doing in terms of 
economic reforms, in terms of improving governance, rule of 
law, and improving the business and investment environment. 
United States businesses and other businesses from around the 
world are simply not going to go to Africa unless they continue 
to do that, and we are seeing increases in investment into the 
region not just from the United States, but from others.
    On our side, I think it is important that we continue to 
work to partner with them, both through trade capacity-building 
support, which AID gives. The hubs have done a fabulous job of 
helping these countries and entrepreneurs to actually develop 
products that they can even ship to us. So we need to keep 
working with them.
    And then we also need to keep pushing them to realize that 
beyond simply taking advantage of one-way preferences, they do, 
indeed, need to prepare to be more competitive in the global 
economy. They have to be continuing to push their businesses so 
that they can compete regionally and be able to trade more with 
each other and also to be able to trade more in the global 
economy.
    Senator Coons. Thank you, Ms. Liser.
    Assistant Administrator Gast, if you would, there are a 
couple things that you mentioned, and I wanted to pursue them, 
if I could, about the Private Capital Group. The reference just 
made to the trade hubs, I certainly was impressed with the West 
Africa trade hub, when Senator Isakson and I had an opportunity 
to visit.
    You have recently deployed your first-ever, I think, USAID 
field investment officers to three offices. You have just 
announced the winner of the second African Diaspora Marketplace 
Grant Program. How are the resources that USAID is deploying to 
engage the Africa diaspora community in the United States and 
how are the strengths and skills of field investment officers 
and the trade hubs making a contribution to strengthening the 
capacity for trade?
    And what role do you see the Foreign Commercial Service 
officers play, particularly in places like the West African 
trade hub, where I was disappointed to recently hear they were 
going to be withdrawn? So I would be interested in that.
    Mr. Gast. If I may, I will start with the question about 
the field investment officers. Soon we hope to have three on 
the continent. I know that is not a sufficient number, but it 
is something that we are building, and we are building that 
capacity.
    And it is really not to take the place of the Foreign 
Commercial Service officer. They have very distinct roles. But 
what this is, the purpose of having a field investment officer 
is really to help facilitate the public-private partnerships 
related to development and growth that are critical to Africa's 
success.
    And with regard to the trade hubs, as Flor mentioned, they 
certainly do help improve the regulatory process within 
governments. But a critical element of their work and, in fact, 
most of where they spend their attention is helping to 
strengthen alliances and cooperatives so that companies that 
are part of those cooperatives can then begin to meet 
standards, for example, phytosanitary standards that would 
allow them to export their products to the United States.
    One example, and perhaps you saw this, Senators, when you 
were out in West Africa, was the Cashew Alliance. And that has 
had tremendous success over the last 4 or 5 years in building 
an Africawide alliance, 23 countries, organizations in 23 
countries, belonging to that with new processing facilities 
being created on the continent.
    Senator Coons. Thank you.
    My last--my first round of questions to the panel, if I 
could, just Assistant Secretary Carson, all three of you have 
spoken in your testimony about the links between good 
governance, security, and economic development, the importance 
of improving rule of law, systems, regional collaboration.
    How does U.S. policy actively promote these goals? And in 
your view, are we dedicating enough resources to these 
priorities when the vast majority of U.S. foreign assistance is 
currently dedicated to health and food security?
    Ambassador Carson. Thank you very much, Mr. Chairman, for 
that question.
    Undoubtedly, we believe that good governance is a primary 
factor not only in the governing of a society, but also in the 
protection of and promotion of business interests. If we have 
governments that follow constitutional norms, the rule of law, 
and have good judicial systems, we believe that those 
democratic practices that help to protect human rights also 
help to protect corporate rights, intellectual property rights, 
investment rights, and the business activities of citizens.
    Those judicial norms and procedures protect citizens and 
individual liberties, but they also protect the sanctity of a 
contract. They allow for prosecution of individuals who 
undermine intellectual property rights. They sanction 
individuals who engage in corruption.
    And if there is a problem between a corporate concern in 
the United States and Africa, we can be assured that an African 
country that practices democracy, has a good judicial system, 
that an American company can be assured that it will be able to 
adjudicate its concerns and interests in a fair and transparent 
manner in the court of law.
    So we believe democracy does play a role both in the 
protection of individual rights, but in corporate rights and 
business interests as well. In that regard, we spend a great 
deal of money trying to strengthen democratic institutions, 
trying to strengthen judiciaries, helping to train magistrates, 
helping to streamline court procedures, making adjudication of 
court processes much more rapid.
    We work with legislative branches to ensure that there are 
fair regulations and good laws that help to improve the 
economic environment in a country so that it will be favorable 
toward business interests, both those from the local citizens 
as well as those on the outside. So we work also with civil 
society and with regulatory organizations in countries to help 
strengthen their capacity to serve, both as watchdogs over bad 
procedures, but also to promote good regulatory environments as 
well.
    With respect to money for different categories of 
assistance, we are always appreciative of the amounts of 
assistance that we receive to promote democracy and governance, 
and we do this by supporting free media, stronger legislatures, 
stronger judicial branches. But we also recognize that it is 
unfair to equate what we get for democracy and governance with 
what we spend in health care and what we spend in areas like 
Feed the Future and humanitarian and agricultural programs.
    Health care, agriculture, humanitarian assistance programs 
are more costly. In democracy and governance, we are providing 
people. We are providing advice. We are providing expertise and 
a lot of intellectual knowledge.
    And yes, we do provide some material things that go along 
with it, books. But if you are running a health care program, 
especially one dealing with HIV/AIDS, you are providing very 
expensive medicines as well. You are providing lots of 
technical equipment that goes into hospitals.
    Same thing in the agricultural sector, the inputs are going 
to be substantially more costly in feed, fertilizer, equipment, 
and other things. So we would expect that there would be a 
difference.
    As I say, we appreciate enormously the resources that we 
get for democracy and governance. I think it is key to being 
able to deliver better services, but they shouldn't be looked 
at on a one-to-one ratio.
    Senator Coons. Thank you.
    Senator Isakson.
    Senator Isakson. The chairman had a graph showing that 
China had overtaken the United States as the No. 1 trading 
partner with Africa. And I think, Mr. Gast, you referred to 
that in your remarks, didn't you? China being a major trading 
partner, or was that Johnnie?
    Mr. Gast. No.
    Senator Isakson. You didn't? Did either one of you--do any 
one of the three of you know what it was that caused China to 
overtake us? What product they are exporting, what--is it 
energy? Is it rare earth minerals? It is petroleum? What is it 
that caused that change?
    Ambassador Carson. Senator Isakson, I think it is a 
combination of things that have resulted in China's expanding 
commercial activities. In terms of imports, China is, indeed, 
trying to import as much raw material as it possibly can. It is 
now an importer of petroleum from Africa. It is an importer of 
iron ore. It is an importer of other kinds of minerals and 
metals. It is also importing some rare earth materials as well.
    But it is also a major exporter. And it is exporting 
inexpensive consumer products into the African market. It is 
also exporting mining machinery and some capital goods as well. 
So it has not been one single item. It has been a number of 
items, both on the export and the import side of the ledger.
    Senator Isakson. I would assume that if we fail to renew 
the third-party fabric agreement in AGOA, that gap will widen. 
Is that correct?
    Ambassador Carson. I would think so, that it very well 
could because we would see a substantial decrease in the amount 
of fabric and textile coming into the United States from 
Africa. Ms. Liser probably has the number on the top of her 
head, but I would think that the largest single item after 
petroleum coming into the U.S. market is textiles.
    And so, the loss of the Third-Country Fabric Provision 
would result in a sharp decline, as we are seeing, in African 
textiles coming into the United States. But the impact for us 
is significant, but for Africa, it is catastrophic because it 
means that jobs will be lost. It means that factories will also 
be closed and that the business probably will disappear and not 
come back.
    Senator Isakson. Ms. Liser, did you want to comment on 
that?
    Ms. Liser. Yes. I wanted to just add just a few other 
things. One of the things that has been seen--one of the things 
that has happened in the trade relationship between the 
Africans and the United States is that for the first time, they 
are able to effectively ship value-added products to us and do 
so competitively.
    That is not necessarily the case in terms of the way that 
their trade pattern is with other countries, including China. 
And they have told us that part of the reason why AGOA is so 
important to them, even though they may only constitute a very 
small portion of our import market in any of the areas that we 
are importing from them--whether it is toys or sunglasses or 
wine or fruit juices or apparel--even though that is the case, 
it is one of the places where they know they can ship those 
value-added products to us.
    And so, we are hoping that, obviously, by the extension of 
the Third-Country Fabric Provision, that their apparel, which 
now actually is about a third of all of their nonoil exports to 
us, and so they are shipping other products, nonoil products to 
us as well. But we want to keep that growing and increasing, 
and we don't think that those kinds of products are going to 
their other partners.
    And that is an area where for all countries in the world if 
all you export are raw commodities at the lowest end of the 
value chain, you will never be able to really capture a large 
share of world trade. And so, that is part of why Africa today 
only has about 2 percent of all world trade. It is because they 
are exporting largely raw commodities, and other countries are 
taking those products, processing them, and adding the value 
and getting a lot more for it once that happens.
    Senator Isakson. Well, one of the reasons I have worked, I 
know Senator Coons has as well, for the extension of the third-
party fabric agreement is we actually will be ceding our 
position and making our position on the continent worse and 
making China's better by just looking the other way in terms of 
the AGOA extension. So I appreciate both of your answers on 
that.
    Mr. Gast, you made a comment that piqued my recollection of 
a trip to Uganda and a trip to Ethiopia that I have taken, 
talking about women in Africa and talking about food security 
and their tendencies to be better savers and better investors. 
They also become better presidents.
    [Laughter.]
    Senator Isakson. I know President Banda in Malawi and 
Liberia's President Ellen Johnson are doing a tremendous job. 
And a lot of people don't realize how much USAID is doing in 
terms of development of women in Africa and how they are 
emerging through many NGO programs like the Village Savings and 
Loan Associations that CARE promotes on the continent and 
throughout the developing world.
    So the African woman is really a part of this expansion of 
opportunity and future for the continent of Africa, and I just 
wanted to commend USAID and you and Dr. Shah for what you are 
doing in that regard.
    Mr. Gast. Thank you, Senator.
    Just one comment, and recently, President Banda was here 
from Malawi. And she spoke at our Frontiers in Development, and 
we had been supporting her and women's institutions in Malawi 
for many decades, several decades. And her response to the 
crowd was, ``I am a product of USAID.''
    Senator Isakson. Senator Coons and I met with her in the 
Foreign Relations hearing room in the Capitol, and we saw 
exactly that same type of commentary from her. And she has 
taken some courageous steps in a very short period of time to 
really turn that country around.
    Thank you, Mr. Chairman.
    Senator Coons. Thank you.
    Senator Udall.
    Senator Udall. Thank you, Chairman Coons.
    And let me follow up a little bit on some of the questions 
that have been asked here, specifically about China's economic 
and trade engagement with Africa and it surpassing the United 
States and Africa at least in a dollar amount.
    Among the reasons that this can be viewed as troubling is 
China's poor record with respect to resource management and 
sustainability. In your opinion, are there opportunities for 
expanded U.S. engagement on these issues?
    Ambassador Carson. Senator Udall, thank you very much for 
that question.
    We engage China on questions related to Africa, and last 
November, I traveled to Beijing for 2 days of meetings with 
Chinese officials. We also talk to African Government leaders 
about China as well.
    We tell our African colleagues that they should hold China 
and Chinese companies to the same rigorous high standards that 
they hold American, European, and other Asian countries, 
including Japan and South Korea, to when they enter into trade 
agreements.
    We see a problem with some Chinese economic engagements in 
Africa that are very much different from our own. When American 
and Western European companies generally engage in the 
continent, we not only make an investment, but we also bring 
new technology. We transfer skills. We hire local labor. We 
deal in transparent contractual negotiations. We are subject to 
the Foreign Corrupt Practices Act of our own country, and we 
hire locally and follow local labor and environmental 
standards; standards which are quite high.
    Frequently, we see in many investments from China that 
these same rigorous standards are not followed. China will 
bring in large number of laborers to undertake and complete 
contracts in countries where there is large levels of 
unemployment.
    There is not a high degree of skill transfer and not a high 
degree of new introduction of technology. And in some cases, we 
see that environmental procedures and labor local laws are not 
followed.
    So to our African partners we say look at what you get. 
Look at it transparently and openly, and we hope that you will 
accept what is, in fact, best for you. To the Chinese, we say 
to them that it is important to carry out your activities in an 
open and transparent way and one in which you are treating 
Africans as partners in the process.
    So, yes, the engagement is there. There is a set of 
fundamental differences between them, but we recognize, too, 
that China does have a right to be an economic competitor in 
the continent, just as the British and the French and the 
Japanese are. But we ask them to be a responsible competitor, 
an open competitor.
    I also note that most of what China does across the 
continent is, in fact, done commercially, is not done as a part 
of a development assistance program. China does not have an 
agency or a department that is the equivalent of USAID or MCC. 
Those don't exist there.
    And they certainly don't have the kind of transparency in 
contractual arrangements that we do, nor do they have a Foreign 
Corrupt Practices Act that allows for extrajudicial oversight 
of any contracts that are made.
    Senator Udall. And it is true, isn't it, that many of those 
Chinese companies are state-run companies and that if they have 
that oversight, I think they could really make a difference if 
they had some structure set up within their government which 
would investigate, if they had a law in place like a Foreign 
Corrupt Practices Act.
    Have you seen--Senator Kerry chaired--or Chairman Kerry 
chaired a hearing here on ivory and the illegal ivory trade and 
how what was really happening with the poaching in Africa and 
the ivory trade in Asia and in China was a result of them not 
cracking down on this. Did you raise that in your meetings?
    When you raise these kinds of issues, do you get assurances 
that all the issues you mentioned in terms of local labor and 
environmental standards and all that, do you get a sense from 
the Chinese they are trying to change, they are trying to do 
something about it? Are they trying to put laws in place?
    Ambassador Carson. Let me say that I have not discussed the 
issue of ivory trade or CITES regulations with the Chinese. We 
are aware of the concerns of the international community about 
the illegal movement of ivory and rhino tusks from Africa into 
Asia. We know that the demand for these products helps to feed 
poaching in Africa, but it has not been something that I have 
talked about.
    I think my colleagues at the State Department do follow 
CITES issues, just as the Department of Interior does. And so, 
this is a discussion with many governments. As you are well 
aware, it is illegal for a U.S. citizen to import any ivory 
products into the United States under our own law, as well as 
under the CITES convention and endangered species.
    With respect to the second half of your question, we 
encourage the Chinese to act responsibly in their trade and 
commercial relations with Africa. But again, as I say, there is 
a dual responsibility that Africans also ensure that they are 
getting compliance from the Chinese in following local labor 
environmental standards and that they are providing value for 
money and that they are employing locally and that there are 
skills transfers.
    We recognize that many Chinese investments and trading 
opportunities in Africa are dominated by state-run 
institutions, and some of those are not nearly as transparent 
to the international community or, for that matter, to African 
governments and to African citizens as they should be.
    Senator Udall. Thank you very much, Assistant Secretary 
Carson.
    Senator Coons. Thank you, Senator Udall.
    I would be interested in hearing from all three members of 
the panel, if I could, your view on the President's Strategy 
Toward Sub-Saharan Africa, in particular the Doing Business 
with Africa campaign and how you see that being implemented 
going forward?
    Your view on the bill cosponsored by Senators Durbin, 
Isakson, and myself, I referenced previously about trying to 
significantly expand U.S. trade relationships. And the last, 
the initiative to streamline potentially, an administration 
announced initiative to streamline Government resources related 
to trade and how your respective agencies currently coordinate 
what can at times be overlapping responsibilities with relation 
to trade.
    If you would just in series briefly address that question 
or series of questions? Thank you.
    Mr. Assistant Secretary.
    Ambassador Carson. I will start. Let me say that in 
promoting greater trade with Africa, Secretary of State Clinton 
has taken a major role by rolling out during the AGOA 
conference this year her economic statecraft policy. She has 
made it very clear that every Ambassador is a commercial 
attache for American business interests overseas, and that 
includes Africa.
    That every embassy is charged with helping to promote 
greater trade and investment. This is key for us in Africa as 
well. In addition, we have undertaken, as I pointed out, this 
year and will continue to do so in the future, trade missions 
to Africa, where we will identify a particular sector and bring 
American business officials to Africa.
    Secretary Clinton will be in Africa during the last week of 
July. And as I mentioned in my testimony, she intends to take a 
rather large group of American business leaders with her to 
South Africa to help to promote trade and investment between 
the United States and South Africa.
    We also have expanded AGOA over the last 2 years to not 
only include the AGOA Forum in Washington, where we have an 
opportunity for American Government officials to talk with 
African Government officials and African business leaders, but 
we have added a U.S. trade and investment component, where we 
have gone out to Kansas City 2 years ago. In June 14-15 after 
the AGOA Forum, we were in Cincinnati, OH. We intend to build 
on each of these tiny initial steps to strengthen what we are 
doing.
    And finally, we are taking the lead in creating 
organizations like AWEP, the African Women's Entrepreneurial 
Program, which, again, was an innovation that the Secretary, 
Secretary Clinton asked us to move forward on. It is also part 
of our effort to engage young African leaders.
    And again, this year for the very first time, we brought 
some 62 young African leaders to the United States to be here 
for a 3-week period to help to promote business initiatives 
with them, to put them in mentorship programs with American 
companies to help them get ideas on how they could grow their 
businesses in Africa. All of this will feed into the Grow 
Africa program.
    There are other strategies that are out there, but these 
are just some of the things that have been done and the last 
new things that have been done in the last year or two for 
which we will build on as we strengthen our efforts to reach 
out to Africa in the business community.
    Mr. Gast. We enthusiastically support the President's 
strategy, especially the pillar on promoting economic growth in 
Africa. And we support it in many ways.
    One is in Washington. This strategy now gives us a common 
framework for all agencies through which to work, and that 
helps us sharpen our efforts. It helps us set strategic 
priorities in Washington for our agencies that are working in 
Africa. And then it also helps identify overlap and gaps and 
manage those overlaps and gaps.
    As the Assistant Secretary mentioned, the Ambassador in-
country is empowered as the CEO of all U.S. Government 
operations. And so, that is where we get the on-the-ground 
operational coordination of all agencies in engaging with 
African partners, as well as U.S. partners. And I can say that 
all of our Ambassadors are fully engaged on promoting U.S. 
trade and investment.
    And then just let me give you an example of how this 
coordination is playing out. From the U.S. Government's 
perspective, there is a focus on the EAC, East African 
Community. USTR and the State Department certainly doing their 
part. We are helping the EAC through trade capacity-building.
    But also one of the things that we looked into was 
establishing the partnership with the U.S. Geothermal 
Association. Why? Because there is significant potential in the 
Rift Valley. Members of the EAC have great potential to develop 
their power sector, and power is one of the major impediments 
to trade and investment and primarily investment in Africa.
    And the United States has a tremendous comparative 
advantage. And so, we think with the tools that we have and the 
competitive advantages that we have in the private sector and 
among agencies, we can collectively pool our efforts and really 
make meaningful impact in a short period of time.
    Senator Coons. Thank you.
    Ms. Liser.
    Ms. Liser. So one of the things, obviously, that the PPD is 
doing is helping us, as Mr. Gast was saying, within the U.S. 
Government to be more coordinated, to set our priorities, and 
to work more effectively together in all the pillars of the 
PPD, but in the particular one that focuses on trade and 
investment and economic growth.
    But I wanted to touch on here the Doing Business in Africa 
campaign really is an effort to recognize that the U.S. 
Government really can only go so far, that we absolutely have 
to have U.S. businesses actively engaged. And it is not as 
though United States businesses are not in Africa. We know that 
there are many of them that are there, many of them that are 
involved in joint ventures, selling products.
    I think just the other day I heard about Rwanda Air is 
going to be purchasing a Boeing aircraft. So we have businesses 
there. But I think the point of the Doing Business in Africa 
campaign will focus on the fact that even for the United 
States, it is not the Boeings that drive our trade. It is the 
small, medium-size enterprises, women-owned, minority-owned, 
diaspora-owned enterprises.
    And it is those companies that we want to get out and 
educate about the opportunities in Africa, which will help them 
to grow their businesses. The most successful small businesses 
in the United States are able to do that by expanding out from 
the U.S. market and identifying foreign markets that they can 
be competitive in and sell their goods and services to.
    So we will be working closely with the Commerce Department 
and others in this Doing Business in Africa campaign, which, as 
I said, I think will be very much focused on our medium-size 
and smaller businesses to make sure that they know that Africa 
has the highest rate of return on investment, to know that 
there are partnerships that are being built, working in terms 
of importing products as well, which can help them in terms of 
supplying from Africa.
    Senator Coons. Well, thank you, Ms. Liser.
    You mentioned in your testimony progress toward a bilateral 
investment treaty with Ghana, and yet at the same time, the 
Foreign Commercial Service, if I understand correctly, has just 
withdrawn their representative, their participant in the trade 
hub. Would you see the absence of a Foreign Commercial Service 
officer in Ghana, in the regional trade hub, as any impediment 
to progress in a bilateral investment treaty?
    Assistant Administrator Gast referenced how the PPD is 
helping identify areas of overlap or gaps, and one of the 
things we are trying to do in the Senate is to identify gaps, 
overlaps, areas where we could be constructive by either adding 
more resources or directing more priority. How do you see that 
playing out in Ghana?
    Ms. Liser. Well, you know, clearly it is useful to have 
Foreign Commercial Service officers in as many places as 
possible in Africa. We certainly see the value of that, and we 
are hoping that through this PPD process and identifying our 
priorities--priority countries, priority issues, areas that 
have not gotten as much focus as they should--that that will 
give agencies, including Commerce, an opportunity to perhaps go 
back and to look at where they need to put those valuable 
resources because they can't put them in every country.
    But if I could just say I have been to a number of 
countries in sub-Saharan Africa, and I believe that the 
embassies, their econ officers, political officers, the people 
in the embassy are doing a great job. People at AID who are 
posted there, people who are, I think, also very useful in the 
exercises that we undertake to improve and enhance our trade 
and investment relationship.
    So even as we are planning for TIFA meetings, we are 
talking to people at the Embassy. They are helping us to set up 
the right meetings, bring in the right people.
    So we are hopeful that notwithstanding the fact that there 
might not be a Foreign Commercial Service officer in Ghana, we 
think that just pursuing this agreement signals to people that 
Ghana certainly is a place that is ready to welcome with all of 
the protections, et cetera, that are needed, new U.S. 
investment--they already have quite a bit of U.S. investment--
but we are hoping that by negotiating a BIT with them that they 
will attract even more.
    Senator Coons. Thank you.
    Senator Isakson.
    Senator Isakson. Ms. Liser, I think this would probably be 
for you. When talking about developing more exports from the 
United States to Africa, for me, the No. 1 problem in Africa in 
terms of business development and trade expansion is 
infrastructure--roads, highways, bridges. But most importantly, 
a reliable electrical system, which everyone that we have met 
with that has come to talk about it from the Great Lakes region 
or wherever, they talk about their unreliable power system.
    The United States has some great leaders in power. General 
Electric and the generators that they sell comes to mind. What 
are we doing to help facilitate expansion of U.S.-manufactured 
products in the energy field to the African Continent?
    Ms. Liser. I think, actually, on that one, Johnnie would be 
good because he just took a group of people there. But if I 
could just say this one thing about the opportunities for U.S. 
businesses there, that we have been working with the Africans 
to help them recognize that the high cost of energy, 
transportation, and other infrastructure in Africa, as well as 
some of the redtape in moving products in and out of ports and 
airports, is keeping them from being competitive and eating up 
some of the advantage that they have through things like AGOA.
    And so, to some extent, just making sure that they are 
focused on investing in regional transport infrastructure, 
regional energy infrastructure that will bring costs down for 
production, make it more attractive for U.S. businesses to be 
there, we think that this focus will actually help as well.
    Senator Isakson. Secretary Carson.
    Ambassador Carson. Senator Isakson, I think your question 
is absolutely spot on. Nigeria today, a country of 
approximately 160 to 170 million people and is one of the top 
10 exporters of oil in the world and is the fifth-largest 
exporter of oil to the United States with enormous gas 
reserves, probably on any given day produces less electrical 
power than is produced and generated in the city of New York.
    This speaks to the need for electricity, reliable 
electricity in Africa's largest, most populous country, but it 
also is reflective of the problem across the continent. We see 
the need. We have tried at the Department of State to respond 
to it, to do on this side to educate, to inform, and encourage 
American energy companies to go out to Africa to see for 
themselves the enormous potential there is for both investment 
and business.
    This is why in February of this year, we in the Africa 
Bureau, I personally led a trade mission to four African 
countries--Mozambique, Tanzania, Nigeria, and Ghana--of some 10 
companies in the United States who we were trying to interest 
in generating, distributing, and transmitting electrical power 
to African countries to strengthen their capacity to do all 
these things. These four countries that we visited have 
enormous hydropower, enormous gas, and enormous petroleum 
resources, as well as natural resources in wind and solar.
    So we took these 10 companies out to give them an 
opportunity to see what the potential in the marketplace was. 
These were companies, some that have never been to Africa 
before, but have been active in Latin America. Small companies 
like Energy International all the way up to GE going out with 
us as well.
    Following up on this theme and using and trying to 
integrate what we have been doing at one level with what we do 
in other areas, as a part of this year's AGOA Forum, the focus 
was on infrastructure with a key aspect being energy. That was 
a discussion point at the meetings in Washington, but following 
that, the Corporate Council on Africa held its infrastructure 
conference here in D.C. They focused on energy.
    And then we, again, as a part of the extension of AGOA, 
took African ministers, business leaders, as well as some of 
the women from the AWEP, the African Women's Entrepreneurial 
Program, as well as some of these young African business 
leaders, we took them to Cincinnati, and again, we revisited 
the theme of energy there. Two of our most important site 
visits were with Duke Energy, which is headquartered in 
Cincinnati, and with GE, which also has a major divisional 
headquarters here.
    The officials, the senior officials at Duke were 
extraordinarily hospitable in showing us. In both the GE 
discussions and the Duke discussions, we tried to show African 
businessmen and women and officials that it is possible to have 
reliable, inexpensive energy generated from gas or from 
gasoline or diesel, as well as from wind and solar, that it is 
possible.
    At one of those stops, I can't remember now whether it was 
Duke or GE, one of the senior engineers told us that in off-
peak hours, he was paying approximately 4 to 5 cents a kilowatt 
hour for electricity, 4 to 5 cents a kilowatt hour. And during 
the high peak in which--the intense part of the day when summer 
heat is highest, he was paying 14 to 15 cents a kilowatt hour 
for electricity.
    He also reported--they also reported that Cincinnati had 
never had a power outage since 1965. The city of Cincinnati had 
not had a power outage since 1965, that the backup systems were 
just that good, despite the fact that they were in a weather-
prone area that had tornadoes and other things.
    Contrast that to what our African Government officials were 
saying to us and the business people were saying to us where 
they were paying for electricity, unreliable electricity, they 
were paying anywhere from 40 cents a kilowatt hour to 80 to 90 
cents a kilowatt hour. And most of their electricity was being 
generated by off grid as a result of the use of imported diesel 
to drive high-cost electric generators.
    Indeed, it is an impediment to manufacturing, keeping 
manufacturing costs low. And again, our effort to help Africa 
deal with this problem is twofold. As I say, one, to educate 
and inform and encourage and to go along with American 
companies out to Africa to show them the enormous potential 
that exists. It also is bringing African business leaders and 
government officials here to show them what exists in this 
country and what can exist in their own countries as well.
    We intend to continue to push this. Secretary Clinton has 
given us the mandate to go forward and try to encourage this 
through our economic statecraft. We will do it as our effort in 
helping to promote Doing Business in Africa as well, but it is 
a focal point 
of ours. And it is not just the only focal point that we have 
on 
the economic radar, but it is one that we are going to continue 
to pursue.
    Some American companies are doing extraordinarily well out 
there, and we hope to use them as examples to other American 
companies about what they can do in the energy field as well.
    Senator Isakson. Thank you very much.
    Did you have something, Mr. Gast?
    Mr. Gast. In my opening statement, I mentioned that we 
established a partnership with the U.S. Geothermal Association, 
and I talked about it very briefly a few minutes ago. But let 
me just give you some statistics that may help illuminate the 
potential that is there.
    In the Rift Valley, the engineers estimate that there is 
15,000 megawatts worth of potential. This is an area that is 
growing, greater need for electricity, and where we have a 
comparative advantage.
    And where the United States has probably unparalleled 
advantage in terms of technical capacity is on low-temperature 
geothermal projects, and there is an estimate of about another 
15,000 megawatts. This is a huge growth area for U.S. 
investors, as well as driving investment and driving growth in 
East Africa.
    Senator Isakson. Thanks to all of you for your testimony.
    Senator Coons. Thank you.
    If I might, Senator, if you would just indulge me one last 
question, I suspect it is of interest to both of us.
    Ms. Liser, the poultry industry is of great significance to 
the State of Delaware, as well as the State of Georgia and many 
other States, and a significant piece of its opportunity for 
the future here in the United States is in exports to Africa. 
My view is that we will always do better developing exports in 
partnership with countries that recognizes their legitimate 
need to develop their own domestic technology and industries as 
well.
    The University of Delaware is host to the Avian Bioscience 
Center. I recently spoke to their most recent class of folks 
who came from around the world from a dozen countries, 
including four from sub-Saharan Africa, to get skills in how to 
manage avian flocks.
    What are we doing to strengthen opportunities and access 
for U.S. poultry exports in Nigeria, South Africa, Kenya? There 
is many markets that have real potential, but where some, I 
think, not scientifically grounded bans based on misperceptions 
about avian influenza continue to make it difficult for us to 
export.
    And what more could we be doing to help build this sort of 
partnership that would make access to those markets both more 
sustainable and more mutually beneficial?
    Ms. Liser. Thank you.
    So, first of all, there are a number of African countries 
that are importing poultry, but then there are those countries 
where we have had some issues. And the issues range. For 
example, in South Africa, it is an antidumping rule that has 
affected the U.S. poultry exports to that country.
    Ambassador Kirk, when he sat down with Minister Davies of 
South Africa during the AGOA Forum, raised this again. And it 
is one of the areas where we have raised it under the TIFA. But 
with it having been discussed at that level, there is a 
commitment to come back and to let us know more about the 
decision that has been made. It is a sunset decision that has 
been made where they kept the antidumping duty in place instead 
of letting it expire.
    So we are following up with them. There is a judicial 
process that is going on there. That is kind of one country and 
one issue. Nigeria, it is a somewhat different issue. The ban 
that they have there, which affects some of our poultry 
exports, has more to do with the philosophy that Nigeria has in 
general about how one goes about building up your domestic 
industries in key sectors.
    And they view poultry, as do a number of African countries, 
they view it as a key sector, both to supply protein to their 
local people, to sell to their neighbors, et cetera. And so, 
the point you were making about we want to partner with them. 
We understand that they would like to grow their poultry 
industries, but we also want to talk to them and work with them 
so that they are not banning the imports of products where we 
are competitive in that market.
    And I would just say this. We have noticed--it is not true 
in every country. We have noticed that they may have a 
preference for certain types of chicken. It might be dark meat. 
So if we could import--if we could export our dark meat and be 
able to be competitive in that market, then our view is that 
there is plenty of room for us to be in the market.
    So we are working with them. We have raised it. We have 
raised the Nigerian import ban, which is not just on poultry, 
but a range of products, in our TIFA meeting, and we will be 
raising it again in the fall.
    And the last thing I would say is that we have also been in 
contact with our poultry industry to talk to them and find out 
more about what they need to do, working with us so that we can 
address the specific countries and areas where we should be 
able to advance our poultry exports into particular markets, 
and it might even be particular products into particular 
markets. But we are doing that as well.
    Senator Coons. Well, thank you.
    If I might, I just have a closing question for the whole 
panel, which is how might we in the Senate, who are 
particularly concerned about continuing to expand and promote 
business relationships between the United States and Africa for 
our mutual benefit, be more constructively supportive of the 
work of the administration and your three agencies?
    Because each of you have described a variety of initiatives 
and efforts that are compelling, that are positive, and that I, 
frankly, think deserve more support from the Senate, from us 
individually and from our offices and from the Senate as a 
body.
    So here is a wide open, softball question to encourage you 
in brief and in closing to let us know what more we could be 
doing to support the work that each of you are doing through 
your agencies.
    Mr. Secretary.
    Ambassador Carson. Mr. Chairman, I am going to say again 
what I said at the very beginning. I appreciate your personal 
commitment, as well as the personal commitment of the ranking 
member, Senator Isakson, for meeting with African members who 
came in from the continent to participate in the AGOA Forum. I 
think that is important.
    I would say things that you can do. Meet periodically with 
the African ambassadors. Encourage them to continue to put in 
place the kind of economic reforms and regulatory environments 
that will attract American business.
    Second, I would encourage you to whenever you can to speak 
to American business groups and encourage them to take 
advantage of the opportunities that exist to do business in 
Africa and assure them that we in the U.S. Government have a 
number of programs that are designed to facilitate and help 
them get into the African marketplace.
    Our own trade promotion efforts, our Doing Business in 
Africa initiative, whether it is Ex-Im Bank or OPIC or USAID 
through its trade hubs, we are out there, and we are willing to 
work with the American business community to move forward.
    Third, I would say do what you are doing right now. Bring 
us here. Ask us what we are doing. Question us about the 
effectiveness of it. And look to see where we are not doing as 
much as we could and encourage us to do more.
    And I will stop right there.
    Senator Coons. Thank you very much.
    Administrator Gast.
    Mr. Gast. My answers aren't too dissimilar from the 
Assistant Secretary's. First of all, our agency, the U.S. 
Government, thank both of you for your personal involvement.
    Both of you are frequent travelers to Africa, and both of 
you are frequent visitors and participants in many of the 
discussions and events that we have here in Washington and 
throughout the country on Africa and investment in Africa. So 
please continue to do that and be active participants.
    Second, I would say continue to support the President's 
Feed the Future initiative. We are seeing tremendous impact in 
a very short period of time. And just recently at the AGOA 
conference, we had investment commitments on the part of the 
private sector, 48 companies of $3 billion, taking place on the 
continent. That is huge.
    Thank you.
    Senator Coons. Thank you.
    Ms. Liser.
    Ms. Liser. And mine builds on what has already been said. 
We think that it would be really helpful for you to continue to 
talk to your constituents and educate them not just about trade 
with Africa, but about trade more generally. I think all of us 
recognize that the American public has a view about trade that 
has it as sort of zero sum gain as opposed to win/win. And we 
think that one of the most important things that needs to 
happen is for Americans to have a really good understanding of 
how trading with the rest of the world really supports the 
global economy, grows jobs here, as well as in other places.
    And so, as you go out and talk to people about Africa trade 
and just letting them know that there are huge opportunities 
that would be mutually beneficial for Africa as well as for us.
    The second thing I would say is, again, you travel to 
Africa. When you go there and you speak with African leaders 
and talk to them about the importance of improving their 
environment for business and for trade, that trade is an engine 
for economic growth, and that that's the thing that is going to 
move them from being dependent on aid to being able to really 
be competitive in the global economy.
    And we would just ask that you also speak to their 
parliamentarians. That that is like really important because 
sometimes we find that the leaders that we deal with, the 
officials that we deal with, trade ministers, et cetera, they 
get it. But we find sometimes that they will mention that their 
parliamentarians don't.
    And so, as a parliamentarian, we think that your engaging 
in Africa with people in their Parliaments would be very 
helpful.
    And the last thing I will say is please continue to press 
to move on the AGOA legislation, not just the Third-Country 
Fabric Provision, but also on the extension of AGOA beyond 
2015.
    Thank you.
    Senator Coons. Thank you very much.
    I am grateful to our entire panel for your testimony today, 
for your hard work on this important topic.
    Senator Isakson, did you have a closing statement you would 
like to make of any kind?
    Senator Isakson. No, thank you.
    Senator Coons. Then let me simply say that both of us come 
out of the private sector, come from States that are known for 
their economic dynamism, and are grateful for the opportunity 
to engage in our home States with the diaspora community, with 
our private sectors, with those who can take advantage of a 
trade. And it is possible for us to sustain the sort of 
engagement we are offering because it connects to American 
jobs. It connects to opportunity for our own States.
    So thank you very much for the opportunity to explore these 
issues today. We will keep the record open for a week for those 
members of this committee who might have missed the 
opportunity.
    I look forward to our next hearing on this topic next 
month.
    Thank you very much.
    [Whereupon, at 4:10 p.m., the hearing was adjourned.]

                                  
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