U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

80–799PDF 2013

INCREASING AMERICAN JOBS THROUGH GREATER

EXPORTS TO AFRICA

HEARING

BEFORE THE

SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH, 

GLOBAL HUMAN RIGHTS, AND 

INTERNATIONAL ORGANIZATIONS

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRTEENTH CONGRESS

FIRST SESSION

MAY 7, 2013

Serial No. 113–57

Printed for the use of the Committee on Foreign Affairs

(

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

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

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

ADAM KINZINGER, Illinois 

MO BROOKS, Alabama 

TOM COTTON, Arkansas 

PAUL COOK, California 

GEORGE HOLDING, North Carolina 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

STEVE STOCKMAN, Texas 

RON DESANTIS, Florida 

TREY RADEL, Florida 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

LUKE MESSER, Indiana 

ELIOT L. ENGEL, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

JUAN VARGAS, California 

BRADLEY S. SCHNEIDER, Illinois 

JOSEPH P. KENNEDY III, Massachusetts 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

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

INTERNATIONAL ORGANIZATIONS

CHRISTOPHER H. SMITH, New Jersey, Chairman 

TOM MARINO, Pennsylvania 

RANDY K. WEBER SR., Texas 

STEVE STOCKMAN, Texas 

MARK MEADOWS, North Carolina 

KAREN BASS, California 

DAVID CICILLINE, Rhode Island 

AMI BERA, California 

(III)

C O N T E N T S 

Page

WITNESSES 

Mr. Stephen Lande, president, Manchester Trade ............................................... 7

Mr. Peter C. Hansen, principal counsel, Law Offices of Peter C. Hansen, 

LLC ........................................................................................................................ 18

Sharon T. Freeman, Ph.D., president and chief executive officer, All American 

Small Business Exporters Association ............................................................... 36

Ms. Barbara Keating, president and founder, Computer Frontiers .................... 45

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Mr. Stephen Lande: Prepared statement .............................................................. 11

Mr. Peter C. Hansen: Prepared statement ............................................................ 20

Sharon T. Freeman, Ph.D.: Prepared statement ................................................... 39

Ms. Barbara Keating: Prepared statement ........................................................... 48

APPENDIX 

Hearing notice .......................................................................................................... 76

Hearing minutes ...................................................................................................... 77

(1)

INCREASING AMERICAN JOBS THROUGH 

GREATER EXPORTS TO AFRICA 

TUESDAY, MAY 7, 2013

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH,

GLOBAL HUMAN RIGHTS, AND INTERNATIONAL ORGANIZATIONS,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The subcommittee met, pursuant to notice, at 2 o’clock p.m., in 

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

Smith (chairman of the subcommittee) presiding. 

Mr. SMITH. The subcommittee will come to order, and good afternoon to everybody. Today’s hearing is intended to examine the 

issues surrounding U.S. exports to Africa, which are supposed to, 

at least, balance African exports to the United States. This will include existing obstacles to two-trade trade with Africa. 

The hearing will specifically examine the Increasing American 

Jobs Through Greater Exports to Africa Act of 2013, H.R. 1777. 

The bill was introduced, as we did previous years, by myself, Ranking Member Karen Bass, and my friend and colleague Bobby Rush, 

who is joining us on the panel, on April 26th and was introduced 

in the Senate on April 11th as S. 718. 

The purpose of H.R. 1777 is to increase U.S. exports to Africa by 

200 percent over the next decade. This bill does not replace AGOA. 

It complements it by providing for rebalancing that makes it as 

beneficial to Americans as it is to Africans. The bill intends to 

reach its ambitious but achievable goal by taking several steps, including the creation of a comprehensive U.S.-Africa trade strategy 

and a coordinator to ensure that all U.S. agencies involved in trade 

work in concert with one another. 

The legislation also calls for not less than 25 percent of available 

U.S. financing for trade deals to be devoted to facilitating U.S.-Africa trade. Furthermore, it encourages the descendants of Africa in 

this country, who largely operate small- and medium-sized businesses to play a greater role in trade with countries in Africa. Various studies show that every additional $1 billion in exports 

generates 6,000 to 7,000 new U.S. jobs. According to current data 

from the United States International Trade Administration, exportsupported jobs linked to manufacturing account for an estimated 

3.3 percent of my home State of New Jersey’s total private sector 

employment. More than one-sixth or 17.2 percent of all manufacturing workers in New Jersey depend on exports for their jobs. 

2

But U.S. exports have suffered during the global economic downturn because traditional markets, such as in Europe, are buying 

fewer U.S. products. According to the U.S. ITA, we are the largest 

importer of African goods, receiving 20 percent of the continent’s 

total global exports. However, U.S. exports to Africa fell sharply 

during the height of the global recession. From 2008 to 2009, U.S. 

exports to Africa dropped 45 percent, from $78.3 billion to $42.8 

billion. 

According to statistics released by the U.S. Census Bureau, African exports to the U.S. since AGOA took effect in 2001 increased 

from $25.4 billion to $66.9 billion in 2012, an increase, a huge increase of more than 163 percent. By far, petroleum exports from 

Africa led the way, with more than $28 billion in 2012 alone. 

Meanwhile, U.S. Census Bureau statistics showed that the 

United States’ exports to Africa increased from $12 billion to $32 

billion from 2001 to 2012, an increase of 166 percent. Consequently, while U.S. exports to Africa showed a robust increase, 

since the inception of AGOA, the U.S. trade deficit with Africa increased from $13 billion in 2001 to $34 billion last year. 

The five most popular import sectors for African countries are 

machinery and equipment; chemicals; petroleum products, including lubricating oils, plastics, and synthetic fibers; scientific instruments; and food products. That means that small- and mediumsized companies across the United States have commercial opportunities available in exporting goods and services to African countries. 

The African Development Bank estimates that one in three Africans is considered to be in the middle class. That is nearly 314 million Africans who have escaped poverty and now buy consumer 

goods, including those from the U.S. In the supermarkets and department stores that have sprung up across Africa in recent years, 

there are some American products already on the shelves, but 

there is space for more contributions from U.S. producers. Companies, such as Procter & Gamble, have long realized the potential 

of African markets. Two years ago, Wal-Mart, the world’s largest 

retail outlet, purchased South Africa’s Massmart and its 288 stores 

in 14 African countries. 

The Economist magazine created a significant buzz within the 

U.S.-Africa trade community 2 years ago when it announced that 

6 of the world’s 10 fastest growing economies in the first decade of 

this century were in Africa: Angola, Chad, Ethiopia, Mozambique, 

Nigeria, and Rwanda. In the following 5 years, The Economist projected that 7 of the 10 fastest growing economies in the world 

would be in Africa: The Democratic Republic of the Congo, Ethiopia, Ghana, Mozambique, Nigeria, Tanzania, and Zambia. 

Whether or not you agree with the popular slogan ‘‘Africa is rising,’’ markets on the continent are attracting foreign trade and investment in increasing amounts. It is not only China that has had 

its sights set on African markets. Countries as diverse as India, 

Japan, Brazil, and Turkey all see the potential of selling their 

products in Africa. 

The Anglo-Dutch consumer goods giant, Unilever, has long considered Africa a lucrative environment for consumer sales, earning 

a fifth of its profits in Africa until the 1970s, when it turned its 

3

main commercial attention to Asia. Now Unilever is back in Africa 

in force, selling $3.7 billion of everything from soap to soup. Frank 

Braeken, head of Unilever’s African operation said African consumers are underserved and overcharged. To meet the continent’s 

need for personal care products, Unilever developed its Motions 

range of products. 

At our hearing on this legislation last spring, we heard from Luster Products, which produces items that fit the description of what 

Unilever is selling as well. There is little reason why this company 

and other U.S. producers can’t follow suit and meet the needs 

Unilever says it is now meeting as an unmet need. 

We will hear today from four witnesses with expertise on the opportunities and challenges faced by U.S. companies in trade with 

countries in Africa. We expect to learn why the U.S. exports to Africa have not kept pace with U.S. imports from Africa and find out 

what Congress can do better to balance U.S.-Africa trade. 

I would like to now yield to Mr. Cicilline for any opening comments he might make. 

Mr. CICILLINE. Thank you, Chairman Smith. 

I also want to acknowledge and thank Ranking Member Bass for 

holding today’s hearing on this very important issue and extend my 

gratitude to the witnesses for their testimony today and for their 

important work on this very critical subject. As has been noted in 

The Economist, between 2001 and 2010, 6 of the world’s 10 fastest 

growing economies were located in Africa, and it is predicted that 

it will grow to 7 out of 10 by 2015. 

In light of this growth, it is critical that the United States remain a strong trading partner with nations on the African continent in order to remain competitive in today’s global economy. We 

must cultivate new and existing trade relations with emerging 

markets in the African continent, particularly sub-Saharan Africa, 

to maintain and foster a strong, mutually beneficial relationship to 

harness this accelerated and exciting growth. 

I look forward to hearing your thoughts and recommendations on 

the United States-African trade relationships and the future of this 

important partnership, and with the permission of the chair, I 

would like to yield the balance of my time to the distinguished gentleman from Illinois, Congressman Rush. 

Mr. RUSH. I want to thank my friend for yielding his time to me. 

And I want to join in the chorus of thanksgiving to the chairman, 

Chairman Smith, to Ranking Member Bass, and to all the members of the subcommittee for allowing me to participate in this 

hearing, and I appreciate the opportunity to be with you today to 

address this most important issue. 

Africa as a continent and as nations as trading partners offer 

U.S. businesses and government unprecedented and significant economic opportunities. I am proud to work with my colleagues in a 

bipartisan and bicameral effort to remedy a problem that we see. 

As has been discussed many times, Africa is indeed a continent on 

the rise, and the African sub-Saharan area region is definitely one 

of the fastest rising parts of the African Continent. As has been indicated, more than half of the world’s 10 fastest growing economies 

are located in sub-Saharan Africa. 

4

What is even more impressive about that fact is that these economies are located where they are in a region that, as we all know, 

is traditionally seen as underdeveloped. H.R. 1777 is indeed an important step and not only is happening in cities’ vast markets but 

also an important step in helping correct the trade imbalance that 

currently exists. In short, this is indeed a win-win move for Africa 

and the U.S. 

I am disheartened by the continuing projection of the image and 

the consciousness of Africa as only being in need of aid when I 

think that the most prevailing solution to the problem of Africa, 

notwithstanding the aid, is also to increase the level of trade. And 

during my tenure as a Member of this Congress, I have had the 

opportunity to travel, as many of you have, and when I am there, 

I am impressed but also disheartened about the amount of global 

investment that is happening in Africa, particularly Chinese investment. I am gladdened because China and other nations are 

there, but I am saddened because the U.S. is standing flat-footed 

as the other nations of the world are standing, are moving fleetfootedly. 

. One of the distinctive resources that the U.S. has and places 

us at a trading advantage to other nations is our Nation’s vast diaspora. The ethnic and cultural linkages that have been forged 

with Africa throughout our own history links inextricably to this 

continent. Indeed, our economic prosperity was founded, has depended upon, and has grown thanks to Africa’s vast resources and 

to Africa’s people. 

So, in this bill, we will be able to leverage trade opportunities 

with Africa. It is an economic prescription that will promote our 

economic aims and our objectives and give the U.S. a leg up over 

our competitors. 

Once again, Mr. Chairman, I want to thank you for holding this 

hearing, and I want to thank you and the ranking member for allowing me to participate, and I look forward to hearing the testimony of these expert witnesses, and I will look forward to also asking a few questions of my own. 

Thank you, and I yield back the balance of my time. 

Mr. SMITH. Thank you very much, Mr. Rush, and you are welcome anytime to join us. Thank you for being here and for your 

leadership on the bill. It is deeply, deeply appreciated. 

We do have, and I say this to our distinguished witnesses, a vote, 

a few votes on the floor right now, so we will temporarily take a 

recess and then come back. Again, I want to apologize. We will lead 

off with Ms. Bass’ opening statement, and then go to our witnesses. 

Thank you for your patience. 

[Recess.] 

Mr. SMITH. The subcommittee will resume its hearing, and the 

chair recognizes Ms. Bass, the ranking member. 

Ms. BASS. As always, I want to extend my appreciation to Chairman Smith for his leadership in this, on this issue and for calling 

this hearing and also to my colleague who has left us, Mr. Rush. 

I want to compliment both of them for moving swiftly to reintroduce H.R. 1777, Increasing American Jobs Through Greater Exports to Africa Act, and holding a hearing on a topic that is a key 

5

priority for me personally and for the more than 1 billion people 

living and doing business on the continent. 

Let me also acknowledge Senator Durbin for leading the way in 

the Senate regarding the bill’s reintroduction and also the bill’s 

other cosponsors, Senators Coons and Landrieu and Boozman. 

It has been a pleasure to work with them. I think this bill is an 

example of our bipartisan and bicameral commitment to the continent, and I always tell everybody we only make the news when 

we are fighting. When we are working on something together that 

is going along smoothly, that, for whatever reason, is not newsworthy. 

I believe that if we focus on the task at hand, strengthening economic opportunities for the U.S. and nations of Africa, we will benefit from the continent on the rise. In Washington, we often hear 

about Africa’s rise and its reemergence. Six of the world’s fastest 

growing economies over the last decade are located in Africa, and 

that number is expected to increase to seven by 2015, yet this information more often remains a well kept secret to U.S. businesses 

looking for new profitable markets. 

I also think that it is very positive that the legislation calls for 

the appointment of a special White House coordinator who would 

focus on an assertive whole of government approach promoting 

U.S. private sector engagement with the continent. 

As the U.S. economy strengthens, we need to seize the moment 

and recognize that the expanding markets in Africa and the growing middle class who increasingly attend universities in the U.S. 

present opportunities for engagement by our Government and by 

the U.S. private sector. These are opportunities that our competitors in China, India, the EU, and Brazil have been quick to exploit. 

These are opportunities that can and will prove transformative for 

our economy and the billion Africans eager to be full participants 

in a global marketplace. 

Africa is no longer interested in development aid alone. Africa, 

with a U.S.-educated middle class, wants to do business increasingly with the United States. We must recognize that Africa itself 

is in transition and seeks partners that want to provide opportunities for trade, economic growth, and investment. It is time for our 

Government and the private sector to see Africa through a new 

prism. 

Mr. Chairman, nearly a year ago, President Obama released the 

U.S. strategy toward sub-Saharan Africa. In this policy directive 

there are four interlocking pillars: Strengthening democratic institutions; spurring economic growth, trade and investment; advancing peace and security; and promoting opportunity and development. While this hearing may focus on the second pillar of economic growth and trade, our success in accessing African markets 

will rely on the strength of each of these pillars and their ability 

to develop and sustain environments that will support the type and 

quality of business engagement that will attract and retain American businesses. 

U.S. companies, such as General Electric, Microsoft, and Firestone, as well as our witnesses today, understand the importance 

of stability, good governance, and the institutions that encourage 

6

and welcome businesses that create jobs and help put an end to 

poverty of individuals and communities across the continent. 

A couple of weeks ago, in Los Angeles, where I represent, I invited representatives from MCC, the Ex-Im, OPIC, and the Department of Commerce to my district in Los Angeles to help educate 

and raise awareness on how California-based businesses can access 

U.S. Government resources intended to seek opportunities throughout Africa and to do so safely and with the sense of security that 

their investments will be safeguarded. 

And I am not the only one. I understand that Senator Coons has 

held forums in his home State of Delaware on doing business in Africa, and last year, Representative Ellison invited me to his district, where we met with the Somalian diaspora, and there are 

other members, like Chairman Royce, Rush, Isakson, Rangel, and 

McDermott, all of whom care deeply about strengthening our economic ties with the continent. 

To this point, I commend the President for launching Doing Business in Africa last year through the Department of Commerce and 

holding the Doing Business in Africa Forum earlier this year. This 

forum and the program aims to leverage the Federal Government’s 

trade promotion financing and strategic communications capacities 

to help U.S. businesses identify and seize opportunities in Africa. 

Mr. Chairman, in closing, I want to acknowledge the bipartisan 

and bicameral support for AGOA, our lead trade agreement with 

Africa. The Foreign Affairs Committee has a long history of supporting this legislation, including Chairman Royce, who has been 

a staunch and ardent supporter, Representatives Rangel, 

McDermott, and also the chairman have been long champions. I 

look forward to working with you and our fellow colleagues as we 

continue to elevate U.S.-Africa policy as well as look for any and 

all opportunities to strengthen our own economy while also benefiting African nations. 

Thank you, and I look forward to your testimony. 

Mr. SMITH. Thank you very much, Ranking Member Bass. 

Let me now introduce our distinguished panelists. 

Beginning first, over his 50-year career at the State Department—talk about a journeyman—the Office of the U.S. Trade Representative, and in private sector work, Mr. Stephen Lande has 

worked extensively to expand U.S. trade. He has worked as a Foreign Service Officer, a senior trade negotiator, and an assistant 

U.S. Trade Representative. He has negotiated trade agreements 

with countries around the world, and he was instrumental in the 

creation of the Generalized System of Preferences, or GSP, the Caribbean Basin Initiative, and NAFTA. Mr. Lande continues to work 

with African governments and teaches international trade at Johns 

Hopkins School of Advanced International Studies. 

We will then hear from Mr. Peter Hansen, who is an attorney 

with 15 years of legal experience and specializes in public international law and African investment law. He has served with the 

United Nations and World Bank and has taught, lectured, and published on the United States and international law topics. Mr. Hansen advises clients in African investment and the development of 

commercial projects involving Africa. He has taught, lectured, and 

published on international legal subjects. 

7

We will then hear from Dr. Sharon Freeman, who is the president and CEO of the All American Small Business Exporters Association. She is an entrepreneur and has undertaken major development assignments in over 100 countries around the world. Dr. 

Freeman has been appointed to numerous U.S. Government 

boards, including those of the Department of Commerce, the Ex-Im 

Bank, the U.S. Trade Representative’s Office, the SBA, and the Department of Energy. She has also won awards from leading business institutions and government agencies in recognition of her 

business and community leadership and business successes. 

We will then hear from Ms. Barbara Keating, who is the president and founder of Computer Frontiers, and has 25 years of experience working in Africa bringing technology solutions to the most 

remote parts of the continent. She has worked for several companies and partnered with USAID in support of various U.S. Government initiatives and has Peace Corps experience as well. She works 

to provide effective communication services in limited infrastructure environments and adapting technology to improve performance for government agencies, NGO programs, and private companies. 

Mr. Lande, if you would begin. 

STATEMENT OF MR. STEPHEN LANDE, PRESIDENT, 

MANCHESTER TRADE 

Mr. LANDE. Good afternoon. And thank you very much for the 

opportunity to speak before you on a very current topic. When you 

have been in trade policy and investment policy as long as I do, I 

always begin by saying, This is not the History Channel, but hopefully we are looking forward to other policies that we may be able 

to discuss. 

We have all read the tea leaves about Africa and can almost 

smell the opportunities that will ooze from collaborating with a 

continent of over 1 billion increasingly urbanized, more dynamic, 

better educated, deeper democracy, upwardly mobile, and mostly 

young. Unfortunately, our private sector has not heard this message. As pointed out, some of the larger companies are involved, 

and you mentioned the names earlier, and we appreciate that. 

We believe that it is a possibility for the U.S. Congress, working 

together with the U.S. administration, to demonstrate that there is 

full support for U.S. investment. We are not a Communist society. 

We don’t have state-operated, state-owned enterprises; we don’t tell 

people where to invest. But what we can do as a group, we can 

work to make sure that there is a level playing field that exists for 

U.S. investors, U.S. exporters overseas. 

To do this, Manchester Trade has come up with their own idea, 

which we call a new Transatlantic South partnership. As you 

know, the U.S. is focusing on a Trans-Pacific Partnership involving 

12 Asian and Latin American countries. We are working on the 

Transatlantic Trade and Investment Partnership, the TTIP, which 

focuses on 27 European countries. However, unlike the other two, 

which focuses on trade agreements, our suggestion for a Transatlantic South partnership goes well beyond trade agreements and 

will encompass investment and development goals. It will realize 

there is significant U.S. national security consideration and will 

8

herald the whole of government approach that was mentioned by 

Ranking Member Bass just before in her comments and so on. 

However, what we are talking about, an important component is 

coordination in Congress, and that is the message that I would like 

to spend a few minutes and focus on. Just for example, we all know 

that Ways and Means Committee is going to soon consider, hopefully renew and even more importantly enhance the current African Growth and Opportunity Act. We all know that H.R. 1777, 

which we are very pleased that Chairman Smith has reintroduced 

and so on again this year and with bipartisan support and so on, 

focuses on exports. We all know that last year, Congressman Bobby 

Rush introduced H.R. 656, the African Investment and Diaspora 

Act. Between them, they form a perfect triangle for moving into Africa as a group. They must proceed under congressional rules, 

under their own committees, and so on. That is how it operates. 

But if there could be coordination—and in this regard, we must 

recognize the efforts of Ranking Member Bass—to bring together a 

group of influential Members all with the commitment of Africa, 

this is the kind of thing that must happen for us to be successful 

with a coordinated approach. 

I guarantee you the Chinese coordinate everything that they do 

there and so on, and they have the advantage of being able to tell 

their SOEs and their profits where to invest. We don’t have that, 

but we could certainly coordinate to assure a level playing field. 

Let me just use the few minutes that I have been given to just 

touch a few measures which could help illustrate where this kind 

of coordination could take place. I want to be clear, there is a lot 

of ideas out there. The Corporate Council has just come up with 

44 suggestions in the trade investment area. The Wilson Center 

has turned out a very good paper, which we were very pleased to 

participate in, but so we are putting out these ideas not as exclusive but as ideas for further work and so on. 

We have already mentioned the fact that the Ways and Means 

Committee should focus on imports, and the act to double U.S. exports from this committee can work together very nicely and so on. 

Export-Import Bank is the largest source of funding for U.S. 

business overseas. The bank itself has been committed to increase 

resources. In fact, under the leadership of Chairman Hochberg and 

so on, Rick Angiuoni, who runs the African Bureau, and so on, we 

have seen since the beginning of the Obama administration an increase of Export-Import financing for Africa from $400 million to 

$1.5 billion last year, almost a four times increase, which is impressive. 

Your bill—even better, your bill calls for 10 percent of Export-Import Bank financing to go to Africa or else you should report to 

Congress why not, which is a good way to push for going there. 

That will result, if you assume that our financing will be in the 

neighborhood of $40 billion next year, $4 billion, so that is another 

doubling. So we support that. 

But we have to go a little deeper than that, and that is where 

you have to work with the Financial Services Committee because 

Export-Import Bank is very proud of the fact that people pay back 

the money that it lends to them. And obviously, we don’t want to 

9

have some recent examples where people didn’t pay back money; 

we know what happens in that case. 

But, on the other hand, if you are going to work in a frontier 

economy, like an African economy, you have no choice but to take 

greater risk. So I don’t know how you are going to work out the 

2 percent; we shouldn’t lose money, yet you have to take greater 

risk. One idea we have, which involves some work, is that maybe 

there could be more coordination with MCC, with USAID, and 

maybe they could help service the debt, service the loan, so if Export-Import Bank gives a loan and it is entitled to a higher interest 

rate, maybe they can contribute some money that they can use in 

order to do business. There are many ideas. 

Another idea we have been working on, a little bit separate than 

this, but it makes sense, is given the need for fiscal probity, Export-Import Bank, OPIC, TDA, all require all kinds of paperwork, 

it has to be done. Well, a little guy can’t do it. An SME can’t do 

it. A diaspora company can’t do it. Maybe, it could well be possible 

that MDBA, SBA can work together with Export-Import Bank, 

with the other lending institutions, and try to conglomerate investments and put them together and provide the technical assistance. 

In other words, we must work together. 

Regional integration. There is nothing more important to U.S. 

commercial and political interests than an integrated Africa. We 

cannot live in the post-colonial era, where a relatively small continent compared to others were sliced into 47, now 48, countries in 

sub-Saharan Africa. They must come together, and this is in your 

bill, you promote it. But, again, it has to be done with Ways and 

Means because it is a trade issue, so they involve both together and 

so on. 

But let me mention what I consider to be the biggest threat we 

face. AGOA is a good program. It should be renewed. I don’t know 

how much time I have, but it still says 5, and I know you are not 

supposed to go over 5, so I don’t—I will just keep talking. 

Mr. SMITH. If you could sum up, I didn’t put it on there. 

Mr. LANDE. Let me make my three points and end, I didn’t want 

to cut myself off either, but I didn’t want to go on. But let me just 

make three very quick points and make them very specific and so 

on. Regional integration, extremely important for the U.S. It provides sufficient scope for U.S. multinationals, large U.S. companies 

to reach the economies of scale, working together with the U.N. in 

peacekeeping and so on, regional community, peer group pressure 

is extremely important and so on. U.S. provides AGOA, which basically says nonreciprocal, when you are together as a group, let’s negotiate a group. The Europeans have come up with Economic Partnership Agreement; horrible things, from a trade point of view. If 

you don’t sign, we cut off access. The U.S. free access, the U.S. is 

right; Africa isn’t ready to sign until they are a group. What we 

are suggesting is that together with the relevant committees, we 

send a signal to the Europeans, excuse me, we are doing a Transatlantic Trade and Investment Partnership with you, let’s make 

sure that extends to Africa, to our southern area, and so on. 

The other quick recommendation there, of course, is that you 

work with European Parliament. European Parliament was just 

pressured into agreeing to this deadline. It would be good if toVerDate 0ct 09 2002 14:11 Sep 25, 2013 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\WORK\_AGH\050713\80799 HFA PsN: SHIRL
10

gether with yourselves you could have a consultation, whether a 

regular scheduled or special, to look at this issue and so on. 

President Obama, when he took office, was very specific. He said 

we cannot do things alone. We have to work with other countries. 

We have too many unilateral sanctions, conditions. Every committee has something else. Each of the objectives are good, but if 

you are a U.S. businessman and you suddenly face a condition on 

whether you use, you know, carbon emission, even though Africa 

is unfortunately going to have to use fossil fuels; if you have a condition that you can’t use U.S. agricultural—you can’t promote U.S. 

agriculture, which promotes things, that you make, have an AGOA 

benefit, but it could be taken away if it turns out that the country 

is undemocratic. 

We are arguing very basically that there should be some committee within the Congress which would review these conditions 

and look at them two things: One are they effective in the way they 

operate. The worst thing we have done is take Madagascar off of 

AGOA because we didn’t like a bunch of colonel thugs for seizing 

power. Seven years later those thugs are around and 200,000 

Madagascan women who are trying to help could have lost their 

job, so we want this reviewed. 

A third quick focus is on agriculture, again beyond Feed the Future. We would want to look at, one, let’s give Africa a chance to 

export the products it can export. It produces tobacco. It produces 

sugar. It produces peanuts or ground nuts. It sweetens cocoa. All 

that is not included because of domestic interests, even though if 

you let Africa ship them, they would have no effect on domestic industry. They would be able to compete against Brazil and displace 

them if we could give some attention to that. 

So, in conclusion, what we are really arguing for is there is a 

whole area which involves more than one committee that has to be 

looked upon. The contribution of Congress can be to work together. 

The time, the tea leaves are in place. For some reason, Mr. 

Froman, the only NSC adviser who ever went to Africa, but then 

he spent 2 weeks there—as I said, only went there on an economic 

mission, and he spent 2 weeks there, going to five, six countries 

and so on, is now the USTR, also remaining as the Special Adviser 

to the President, if Congress approves him and so on, et cetera. 

You have all these ideas coming from the private sector. Every 

time you read something it talks about Africa is on the way, every 

magazine article. You cited The Economist, Forbes, all there. I really would hope very much that this Congress could focus on a 

Transatlantic-South partnership with Africa. Thank you so very 

much. 

[The prepared statement of Mr. Lande follows:]

11


80799a-1.eps
12


80799a-2.eps
13


80799a-3.eps
14


80799a-4.eps
15


80799a-5.eps
16


80799a-6.eps
17


80799a-7.eps
18

Mr. SMITH. Thank you so very much. 

Mr. Hansen. 

STATEMENT OF MR. PETER C. HANSEN, PRINCIPAL COUNSEL, 

LAW OFFICES OF PETER C. HANSEN, LLC 

Mr. HANSEN. Thank you very much. 

I have been told I am a firebrand, so I hope I don’t disappoint 

without alienating anyone. 

I would just like to start by saying I think the bill is an excellent 

step in the right direction. In my written testimony, which is fairly 

extensive, I made some minor suggestions as to wording to emphasize investment, and I would like to request at this time that my 

written testimony be put in the record. 

Mr. SMITH. Without objection, your full statement will be made 

a part of the record and that of all of our distinguished witnesses. 

Mr. HANSEN. Thank you. I would like to start off with a few relevant figures that could put matters into context. Unfortunately, 

they are surprising, perhaps humorous, and all the more horrifying 

for being so. First off, sub-Saharan Africa’s entire GDP of $869 billion is 79 percent of the U.S. budget deficit in 2012. So it is less 

than our budget deficit. In other words, close to 900 million people 

in the region of sub-Saharan Africa, that is almost three times the 

U.S. population, live on a little under 6 percent of our GDP. So 

when we ask Africans to buy more U.S. products, it is like asking 

Americans to buy more U.S. products after losing 98 percent of 

their income. 

As for trade, U.S. apparel imports, about which there has been 

a great deal of talk and legislation over the years, apparel imports 

under AGOA now roughly equal Americans’ consumption of overthe-counter teeth whiteners, which is sad. 

U.S. food imports from rural agricultural Africa, filled with farmers, in 2011, were about half of what America spent on Twinkies, 

and even less than what Americans spent on Halloween costumes 

for their pets. 

As for investment, which is critical, U.S. investment in Africa, 

after decades of amassing assets there and operations there, is a 

little bit more than what Americans waste on gambling in a year 

and little more than twice what Americans spend on Easter. 

This is quite sad, which brings me to one of my two points, which 

is that the U.S. is losing Africa because it will not invest in Africa. 

It is a cold fact that U.S. investment must precede U.S. exports, 

as my written testimony made clear with examples of Taiwan and 

the People’s Republic of China. 

As things stand, the U.S. has almost no economic relationship 

with sub-Saharan Africa beyond oil. If the U.S. were to level sanctions against sub-Saharan Africa in every non-oil sector, it could 

hardly be more effective than present U.S. indifference. The U.S. 

wants to sell to Africa but has not wanted to date to buy or to invest there. The U.S. Government has done almost nothing to secure 

treaty protections for U.S. investors in sub-Saharan Africa, and by 

that, I mean bilateral investment treaties, or BITs, or double tax 

treaties, which are known also as DTTs or DTAs. By contrast, the 

People’s Republic of China wants to sell, wants to buy, and wants 

19

to invest in sub-Saharan Africa. This is why China is ascendant in 

Africa. 

Finally, as the stats on the rise of China show, AGOA is an economic irrelevance and a strategic distraction of disastrous proportions. This is not to say, incidentally, that AGOA should be set 

aside, but it is a major distraction. So this brings me to my last 

point, which is that the U.S. must get serious about investing in 

Africa if it wants to export to Africa and influence Africa, indeed 

to retain any kind of strategic position on the continent. 

The U.S. has got to quit arguing about AGOA and see it as but 

a small part of a far larger Africa strategy. The U.S. has to treat 

African countries like other countries, especially as we do the People’s Republic of China. We have to accord African countries what 

I would call ‘‘most favored investment partner’’ status or to adapt 

a more current trade law term to have ‘‘normal investment relations,’’ as with other countries. African countries should not 

uniquely have to earn U.S. economic partnership by jumping 

through hoops and meeting or passing ever-moving goalposts. 

The U.S. Government should seek to turn Africa and African 

countries into economic partners. In earlier writings referenced in 

my written testimony, I have called this the Mature Market Model 

or M3. The U.S. has to quit worrying about closed economic sectors, 

whether it is mining or hotels. The U.S. has closed economic sectors as well. What the U.S. Government has to do is engage with 

Africa and allow U.S. investors to penetrate those markets and 

gradually crack open those closed sectors by gaining trust on the 

continent. 

The U.S. Government has got to conclude BITs and DTTs, that 

is bilateral investment treaties and double tax treaties, across the 

continent. Arab North Africa along the Mediterranean rim has 60 

percent coverage of both BITs and DTTs. Once you get down to 

Black Africa, sub-Saharan Africa, BIT coverage drops to a mere 11 

percent and double tax treaty coverage to 2 percent. In other 

words, one double tax treaty with South Africa. This is ridiculous. 

We need to conclude those treaties forthwith. 

Also, if a stunning gesture is looked for, a sensible approach 

would be to have a multilateral, continent-wide, multilateral investment treaty and multilateral double tax treaty. 

And very finally, U.S. aid should reform whole industries and 

embrace private projects as well. This is in my writings called the 

Aid and Investment Model, or AIM, approach rather than ineffective, one-off, isolated and useless projects and studies. Thank you. 

[The prepared statement of Mr. Hansen follows:]

20


80799b-1.eps
21


80799b-2.eps
22


80799b-3.eps
23


80799b-4.eps
24


80799b-5.eps
25


80799b-6.eps
26


80799b-7.eps
27


80799b-8.eps
28


80799b-9.eps
29


80799b-10.eps
30


80799b-11.eps
31


80799b-12.eps
32


80799b-13.eps
33


80799b-14.eps
34


80799b-15.eps
35


80799b-16.eps
36

Mr. SMITH. Mr. Hansen, thank you very much for your testimony. I think this is the first testimony I have seen where there 

were 85 footnotes. So I do appreciate the extensiveness of your research. 

Dr. Freeman. 

STATEMENT OF SHARON T. FREEMAN, PH.D., PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, ALL AMERICAN SMALL BUSINESS EXPORTERS ASSOCIATION 

Ms. FREEMAN. Thank you very much, Chairman Smith, ranking 

member, and members of the subcommittee, thank you very much 

for this opportunity to speak to you today in my capacity as the 

president of the All American Small Business Exporters Association about increasing American jobs through greater exports to Africa. I have read extensively the bill, and I applaud it, and I certainly support it. 

First, I would like to briefly mention why it is important to encourage exporting to Africa by SMEs, including the African diaspora firms. The U.S. International Trade Commission’s 2010 report, called ‘‘Small and Medium Sized Enterprises’ Characteristics 

and Performance,’’ confirmed that SMEs play a larger role in the 

export economy than is often suggested by traditional trade statistics. In fact, it is estimated that SMEs support 4 million jobs 

through their exports. 

While we know a lot about the role of SMEs in exporting, we 

know less about the contribution and potential of a subset of SMEs, 

which is minority and immigrant-owned firms, particularly African 

immigrant-owned firms. 

So here is what we know. We do know that according to the 2007 

census minority-owned exporting firms were larger than their nonexporting minority-owned counterparts. We also know that minority-owned exporting firms average having about 21 employees 

while non-exporting minority owned firms have about 7. Their receipts, that is the exporting minority firms, are greater per employee and significantly so than non-exporting firms. We know further that minority business export activity spans into at least 41 

countries over six continents, and we know that minority firms are 

prime for exporting due in large part to their language capabilities, 

their cultural compatibility, and business agility. 

Now let’s consider what we know about Africans in the U.S. This 

is important. We know that they have home country linkages. We 

also know that most of these immigrants are located in high-density exporting areas, such as California, New York, and so forth. 

We also know that the largest African sending countries, such as 

Nigeria and Ethiopia among them, are also among the countries to 

which we export in growing number. Surely that is not a coincidence. 

Given this, what we need to do and consider is what could be 

done to consider encouraging firms with home country linkages, in 

other words African-owned firms, to export more to their home 

countries. So there are about six suggestions I have in the time 

that I have been allotted. Otherwise, I would have a lot more. 

But the first thing we have to do, really, is understand that it 

is necessary to compete with China, and in that recognition, we 

37

have to know that it is not possible to have a one-size-fits-all strategy in how we go about that competition. We can say for certain 

that China does not pursue a one-size-fits-all strategy. They have 

a very tailored commercial strategy for each and every country 

which they negotiate directly with the Presidents of those countries, and I must say the total number of African Presidents that 

has ever been in America at one time is six; whereas certainly the 

head of China has all of the African countries visit them at one 

time. So the reality is, is China is a competitor, no matter where 

we are trying to export in Africa, and so we have to have a China 

strategy. 

Now, I note that your bill mentions the Trade Promotion Coordinating Committee a number of times. I know it very well, and I 

have known it for many, many years. I have read all of the national export strategies. I have worked closely with this coordinating body, but here is the thing I want to say about the coordination. It is not just a matter of coordinating the unified budgets of 

the 19 or 20 Federal Government agencies. We have to be more 

strategic about what we are actually coordinating, and what I want 

to say in particular to draw your attention to is one example of the 

failure of strategic coordination is, for instance, the fact that the 

U.S. Agency for International Development has come up with new 

rules wherein they say for all the countries in which they are operating, that now we can, U.S. companies working there can procure 

all of the goods from those local countries, no matter where those 

goods come from. So if you look on the shelves of Malawi, you name 

a country, where do those goods come from? They don’t come 

from—they are not made in Malawi. So we have now just eliminated just huge, billions of dollars worth of export opportunities for 

our small firms. That is not proper coordination. 

On the one hand we have the national export initiatives and on 

the other we are removing the export opportunities for our firms. 

Another issue that I want to mention is export processing zones. 

A long time ago, USAID used to actually help fund those. I work 

on them, so I know this is a total fact. They haven’t done this for 

years. But I tell you who is doing it now. That is China. Big time. 

Because they know that their firms need a foothold in that country. 

And so when it becomes difficult for Chinese firms to work in African firms, they create a zone that makes it easier. When they have 

power, when they have, you know, exemption from laws and regulations, they can do their business, and they are doing that business not just to export from the zone into a foreign territory, the 

foreign territory becomes the domestic territory. That means they 

are exporting into Africa from that zone. That is a very important 

concept. And we need to get with that concept. 

So what I am saying is for all of the things that USAID is doing, 

one of the things they need to be doing is having another look at 

this, and I tell you who is looking at this finally again is the World 

Bank and the IFC. For many years, they considered this an economic distortion, but what they have come to realize is that it is 

an economic and competitive reality, and now they are sponsoring 

it, too. 

I am going to say three other things really quickly. One is mentor protege programs, and this is to help small firms actually link 

38

with larger firms to take advantage of some of the procurements 

that are involved in the Millennium Challenge Corporation and 

other of the TPCC institutions, so that this gives, helps the protege 

firms to develop the capacity to export more, and of course, we do 

know that if you sell anything right here in Washington, DC, to the 

World Bank or any of the international organizations, that is an 

export because they are a foreign entity. So we have a U.S., you 

know, executive office in the World Bank. Here is an idea. Why 

don’t we get a list of, you know, those procurements and see how 

many U.S. companies are involved, and then why don’t we give incentives to some of those companies that got some of those procurements to join together with smaller firms? I think that is very important. 

Awareness campaigns, I think it is important for the U.S. Trade 

Representative’s Office and some of the other TPCC offices to specifically figure out where are these African diaspora firms located, 

because we know that essentially from the Migration Policy Institute’s data hub, you can find it in 5 minutes by zip code, and then 

let’s reach out to them because we can see a pattern of a relationship between increasing exports to their countries where they are 

located. So when you see more Ethiopians in Prince George’s County, you see more exports from Prince George’s County to Ethiopia. 

So let’s match up and connect these dots. 

Finally, in regard to export financing, what I like about your bill 

in particular is that there is a recognition that you need administrative funds to do the outreach. It is not just program funds. So 

I do note that and support that, and I support the comments of my 

colleagues, and I thank you for the honor of being here today. 

[The prepared statement of Ms. Freeman follows:]

39


80799c-1.eps
40


80799c-2.eps
41


80799c-3.eps
42


80799c-4.eps
43


80799c-5.eps
44


80799c-6.eps
45

Mr. SMITH. Dr. Freeman, thank you as well for your testimony, 

and your very specific recommendations based on extraordinary experience. Thank you. 

Ms. Keating. 

STATEMENT OF MS. BARBARA KEATING, PRESIDENT AND 

FOUNDER, COMPUTER FRONTIERS 

Ms. KEATING. Chairman Smith and members of the subcommittee, and especially to you, Congresswoman Bass, and your 

staff, your very active role in bringing new voices like mine to you 

to hear about the issues. 

My name is Barbara Keating. I am the president and CEO of 

Computer Frontiers. We are a small, woman-owned business. I 

have been in business since 1996. I started it in a spare bedroom 

in Germantown, Maryland, and since that time, we have been focused on Africa. We work in 34 African countries. We are incorporated in nine countries, and we currently have four fully staffed 

offices on the African continent as well as my office in Frederick, 

Maryland. 

I am speaking to you today as a representative of small business 

who has worked to establish business throughout Africa and the 

continuing and growing challenges that are arising for companies 

like mine. 

There are two major points that I want to bring to your attention 

in regards to increasing U.S. exports to Africa, and those are to 

support that, one, small- and medium-sized businesses is the right 

place for you to focus your support and two, now is the time to act. 

Why focus on small- and medium-sized business? One reason is 

that there are 54 African countries and the majority of these countries have relatively small individual markets, making these markets less attractive to larger U.S. corporations. However, for smalland medium-sized businesses, African markets are the right size, 

leading to cooperative partnerships and long-term relationships for 

continuing growth between U.S. and African businesses. 

My oldest company is located in Uganda. It is 13 years old. Initially with a partner, we grew the company together from 5 to 35 

core highly qualified technical staff and hundreds of consultants 

and trainees throughout the last decade. In Uganda, as well as in 

Togo, my companies with my partners grew and expanded in both 

staff and revenue. From these bases, we then expanded our reach 

into other surrounding African country markets, incorporating in 

five other countries and hiring staff and providing services without 

having full-fledged offices there. The bottom line is that 90 percent 

of my professional staff based here in the United States are reliant 

on our work in Africa. 

And yet we are a small company. The challenges are many for 

small U.S. companies not only to enter and succeed in Africa, but 

then, once established, to move from the startup phase to the scale 

is further challenged by the lack of coordinated U.S. Government 

focus on Africa as well as from U.S. policies seemingly almost unwittingly bent on crushing small business. I will discuss each of 

these in turn. 

First, one could find that the U.S. Government is providing many 

resources, including financing, for U.S. small business to increase 

46

their exports to Africa. However, where to go and what is really 

available is a hit-or-miss affair, based on the knowledge of the staff 

in the government agencies you meet, and this amorphous resource 

pool does not in reality seem to be more than a few more inches 

deep. And in my experience over the last decade, the bureaucratic 

hoops that must be passed through to even determine if your business qualifies for a program or financing are almost in themselves 

too unlikely to succeed, too time consuming, and we in our own 

analyses have deemed them unrealistic to even raise the effort to 

apply. 

Other than minimal bank lines of credit based on receivables, we 

have had no loans or financing. It is almost impossible to grow, and 

we continue to cycle at the same level of activity. 

What would help is a more coordinated focus on Africa to include 

a strategic trade policy and a one-stop shop for small business to 

more quickly determine if there are any supported options for our 

programs. 

Second, in the same vein of challenges, is access to Africa. One 

of the main plusses to being a U.S. State Department, USAID, or 

other U.S. Government agency contractor in Africa is that contract 

vehicle for small businesses like ours gives us a reason to be in 

that market. Currently, as Ms. Freeman also testified, the USAID 

Forward Implementation and Procurement Reform process is requiring more local contracting and loosening the hold on the ‘‘buy 

America’’ act. While one might think that that would be an excellent move for small business like mine, who has established a local 

presence for more than a decade in Africa, the rule has language—

I hope which is unintended—which rules out companies like mine. 

The new rule requires that to be considered a local company, it 

must be owned at 51 percent levels by the local nationals from that 

country, eliminating U.S.-majority-owned company, like mine, 

which have long vested in these markets. To my mind, the reason 

for a U.S. person or entity to maintain 51 percent controlling interest is to ensure that we comply with the U.S. and local laws. And 

it appears, in my humble opinion, to be an advantage for the U.S. 

Government. However, this is not what is being implemented. 

Further, as part of the USAID Forward procurement reform, 

large contracts, which large USAID government contractors will 

pursue in Africa for USAID, will be required to include 30 percent 

of the contract value to go to African local companies. Previously, 

these subcontracts may have gone to small U.S. companies like 

mine. However, it is now unlikely that U.S. small businesses will 

be considered to partner and provide services for these large contracts as we don’t meet the checked box requirements for being a 

local company. In summary, USAID Forward takes away both the 

logical vehicle for U.S. small business that has now used this to access and grow in African markets and further takes away our competitiveness in U.S. contract marketplace itself. 

Now is the time to act. Over the last 10 years, I have been part 

of the discussion in Washington with relevant department heads, 

Congressional Members on the Chinese entry into African markets 

and have posited the notion that U.S. companies have no support 

from the U.S. Government in Africa, while we are exposed in direct 

competition with Chinese businesses having full power and financVerDate 0ct 09 2002 14:11 Sep 25, 2013 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 F:\WORK\_AGH\050713\80799 HFA PsN: SHIRL
47

ing of the Chinese Government behind them. A common response 

has been that it is just sour grapes the U.S. private sector is experiencing from the new private sector in the African markets. However, today, we can clearly see how China’s Government’s efforts 

over the last decade have positioned its companies to be the largest 

African investors by far. 

We should not dwell only on the Chinese investments or their 

good sense in pursuing the African market, as other countries are 

also providing significant support to their companies to aggressively expand into Africa. I have, myself, seen it from Europe, 

India, Turkey, the Gulf States, Brazil, Malaysia, Israel, and South 

Africa. It is resulting in the reality that the U.S. investment share 

is shrinking, simply because others are doing more. 

As is stated in the U.S. Corporate Council on Africa in their policy recommendations to the Obama administration this year and 

where I have been a board member and a member there over the 

last 10 years, some European companies are pursuing commercial 

advantage through economic partnership agreements and reviving 

traditional relationships. Some countries are offering concessional 

financing in addition to innovative combinations of government assistance and private sector contracting that the U.S. Government 

has been increasingly unable to match. The move to create a 

BRICS infrastructure bank is an indicator of how emerging powers 

are shifting focus toward Africa. If the U.S. does not work to reverse this trend, long-term opportunities for U.S. business will be 

greatly limited. A substantial additional commitment of human, financial, and policy resources is needed to support our national interests in Africa. At a bare minimum, the United States should be 

matching the support provided by other governments to their private sector. Thank you for your attention to this. 

[The prepared statement of Ms. Keating follows:]

48


80799d-1.eps
49


80799d-2.eps
50


80799d-3.eps
51


80799d-4.eps
52


80799d-5.eps
53


80799d-6.eps
54

Mr. SMITH. Thank you very much for your testimony and for 

being here to share your insights and wisdom. 

Just a few opening questions, and I will yield to my distinguished colleagues. And again, your full statements really are helpful to this subcommittee because you have taken the time to give 

us a very broad look. Obviously, time didn’t permit each of you to 

say everything in your paper. But I can assure you, I read it. I 

know members of the subcommittee will do likewise. So thank you 

so much for that. 

Let me just ask Dr. Freeman, you mentioned that all firms entering the African market now have to compete with China. I am wondering if—there are a number of issues and all of you might want 

to speak to this. But I have been baffled. I have been here for 33 

years. We know that much of the content of what we deal with in 

terms of our policy—first, it was the Soviets and the proxies there 

between ourselves and the USSR, but now it has been the focus on 

PEPFAR, malaria, TB, the wars in Sudan, obviously the problems 

in the D.R. Congo. We have been crisis managers, if you will—how 

well or poorly is up to the judgment of history. But there has been 

a genuine compassion and concern on both sides of the aisle 

through various presidencies to try to help out and to be a real 

force for good. 

But I wonder sometimes if the branding of Africa in the mind’s 

eye of the Americans becomes one of crisis after crisis after crisis, 

inhibiting and chilling investment. 

And Mr. Hansen, you talked about the need for investment. So 

I am wondering how we change that perception. It would seem to 

me that in an exporting strategy, which is why we are doing this 

bill and why we are trying to promote it and get it passed, will finally say it is in America’s interest and the most robust the give 

and take between the African countries and the U.S. is, the better 

the rising tide will lift all those boats. But this idea of the branding—I have been to Africa many times. It is a wonderful place to 

visit. Even when we go to difficult places, they are usually like difficult places here or any other country in the world. There is also 

a number of oases everywhere you go where people are living their 

lives, their children are growing and opportunities, if they could get 

more, would mean that they have a greater quality of life. 

So I am wondering if you could speak to the branding issue. Why 

hasn’t, Mr. Hansen, the investment actually occurred? Is it because 

of that? Is it not easy to get financing on the stock market or ETFs 

not sufficiently including African businesses? If you could start off 

with that, I would appreciate it. 

Mr. HANSEN. Thank you very much, Chairman Smith. 

It is a complex question. I think, as to the branding issue, I have 

written that if Asia gets CNBC, Africa is relegated to the late night 

murder segments of the local news, I am afraid. I think journalists 

love to go out there with their flak jackets and go in for Pulitzers, 

and they don’t want to report on Ghana’s explosive growth. They 

don’t want to report on the quiet places of Africa, the vast, vast 

tracts of Africa that are quiet and ready to prosper. They want Somalia, and they don’t even talk—when they talk about Mogadishu, 

it is Black Hawk Down-type stuff. It is not that the Turks are coming in and investing at a tremendous clip. 

55

So I think what Africa simply needs is normality from the U.S. 

perspective. I think the U.S. needs to treat Africa as it would treat 

Asia, as it would treat Mexico, as it would treat Latin America. It 

should no longer be a plaything of the United States, and particularly of the United States Government and the United States aid 

industry. It simply needs to have protections put in for business 

and a tone, however the U.S. Government wants to promote that, 

that would be great, but a tone that it is simply open for business 

and ready to work. I think that is everything. 

And I believe Ms. Freeman has some other insights. 

Ms. FREEMAN. Well, actually, my comment will go beyond the 

branding and to the issue of strategy. You know, a long time ago, 

we used to put out in hard copy a very big book called the U.S. 

Industrial Outlook, and it used to analyze very, very clearly what 

America’s standing was in respect to a whole host of products and 

industry. We used to have 17 major sectors of our economy, and we 

have actually trade committees still in each of these 17 areas. So 

the issue is, how do we actually understand ourselves and our economic growth and the basis for it industrially? 

China understands it very well. So when they look at the pharmaceutical industry or the automotive industry, they look at that 

from every strategic point of view—supply, demand, inputs, outputs, whatever it is. And then they say, okay, where can we get 

that from? Where does Africa play into this? 

So, yes, we have commercial strategies and policies. But are they 

strategic enough? Are we understanding where we are going economically to understand therefore the role that the assets that Africa has can play into that? And that is very much on a product 

and industry sector basis. We no longer produce these industrial 

outlooks. 

And I would say that we have more information right now that 

is available to us through the Internet, but we have less knowledge, less knowledge and less understanding. If you ask us where 

are we going in any sector—computers, pharmaceuticals, you name 

it—where is there a unified approach and understanding of how we 

grow? What are the inputs for that? 

So let’s take it outside the framework of how we feel about Africa. China is not worried about how they feel about Africa. They are 

talking about, you know, what can we get? When we look at our 

Prius cars, where does the input for those batteries come from? It 

comes from the Congo, okay? The Chinese don’t have any feelings 

about the Congo. They are saying, let me get that titanium or 

whatever you make those batteries out of. So we need to go back 

to that U.S. industrial outlook approach and understand now 

where we are going industrially or even in the service industries 

and see what plays into that. Thank you. 

Mr. LANDE. Very short. 

One of the challenges you face as a committee is that you look 

at Africa. You have a budget for USAID to go up there. But there 

is a big difference between the humanitarian needs of Africa, which 

will be serious, the problems in Mali, which are serious, and economic growth, which is as much in the U.S. commercial interest as 

they are. 

56

So my only suggestion—which Manchester Trade has made a few 

times now—is to differentiate. Just say, economic growth, this is 

our interest. Let’s see how much money we can put into it. Let’s 

see how we can work with it, and we will get that back. The good 

things we do continue doing. And no one said, you shouldn’t do it. 

PEPFAR, a great success. I mean, God. But having said that, I 

think it is this differentiation. 

One of the points, for example, we always have, as mentioned, 

that brings us closer to your committee. MCC. MCC has an emphasis on poverty. We understand that. But also, MCC is the only institution in the United States today that focuses on infrastructure. 

And infrastructure is one of the three requirements for regional integration. One is doing away with trade barriers. Two is infrastructure. And three is making the political decisions that you have to 

make to move in that direction. Why doesn’t the MCC, as long as 

they have got money, 20 percent, reasonable infrastructure could 

be one of their requirements working with, of course, the compact 

countries? 

So all I am saying is that part of it might be able to be done by 

differentiating the economic growth stuff with the other stuff because America has to do the other stuff because, as Sharon says, 

China will not do it. Thank you. 

Ms. KEATING. I have just a really specific and small recommendation, which is, I have worked on some of the CODELs into 

Africa, and so what you see and what the pictures that come back 

are of the game parks, of the little village. I want to see the buildings. I want to see those kinds of things, that from your visits and 

showing that, it can go a long way. 

Mr. SMITH. I do have other questions. But I will yield to my colleagues out of deference to them. And maybe if there is time, I will 

go back to those questions. 

Ms. Bass. 

Ms. BASS. Thank you, Mr. Chairman. 

I actually had a couple questions for each of you. 

Mr. Lande, you mentioned in your series of recommendations 

that—this is what Congress should do—a committee that would review the conditions and sanctions. And I wanted to know if you 

could expand on that a little bit. What is your vision of that? How 

do you see that happening within the Congress? 

Mr. LANDE. Let me begin by amplifying the comment that Sharon Freeman made. Again, it is the History Channel. But if you remember when Ross Perot was running for President, he made a big 

deal about our support of export processing zones in Central America. And one of the results of that was that USAID had a prohibition against aiding export processing zones. Export processing 

zones in Africa create jobs for the U.S. They enable Africa to participate in supply chains and displace China. China participates in 

the supply chain and tries to grab the production. It is trying to 

grab the intellectual property rights and so on. I don’t want to say 

the obvious. 

All I am just saying is that it is this need of some committee as 

part of this Transatlantic South initiative or maybe a group of committees—I can’t tell you how to organize Congress itself. But just 

say, wait a minute, we are not the only power in the world. It is 

57

a multipolar world. We have a lot of conflicting interests. Some 

people worry about commercial. When the people come who are 

concerned about conflict diamonds—it is a horrible situation going 

on in the Congo. No one is going to sit and defend—you were just 

there, Ms. Bass. But to say that this is how you correct it, by ensuring that no one in the Congo can work in mining, that the average American company says, I don’t want to be bothered with all 

this mishegas concerning about investing with conflict diamonds. I 

have to have tests. They have to make sure that they don’t come 

from this—I will just go to Australia. I don’t have that problem. 

So what I would picture very much would be these two requirements. One, is there a more effective way to do it? And two, is 

there some way we can reduce the collateral damage on innocent 

parties, of which innocent parties can be Africans who want to 

work in the area or could well be American investors who are trying to do a good job? So that is what I would picture. I can’t tell 

you how to organize it congressionally. But the kind of work that 

you do talking to other Members is a good way to get there. Thank 

you. 

Ms. BASS. Thank you. 

And Dr. Freeman, Mr. Lande was mentioning export processing 

zones. Was that the same thing that you were talking about? 

Ms. FREEMAN. Yes. 

Ms. BASS. And you mentioned that used to be a part of USAID. 

I was wondering if you could tell me when and why it changed. 

Ms. FREEMAN. It changed because the textile forces of the U.S. 

thought that a lot of U.S. companies would go to, particularly at 

that time, the Caribbean countries and manufacture there and the 

U.S. would lose jobs. So it was first supported by USAID in the 

early 1980s as a way to promote economic development of those 

countries. But then the textiles unions fought against it. So it was 

a prohibition against USAID funding any more of those zones. And 

then, as I said, subsequently, it was determined by the World Bank 

that the promotion of these kinds of regimes was a macroeconomic 

distortion, and they had reversed their position on that as well. So, 

in fact, this——

Ms. BASS. That was their position; it is not their position now? 

Ms. FREEMAN. It is not their position anymore, no. IFC has funded new positions to be in charge of overseeing these various 

projects that they are now funding. So whether it is an economic 

distortion or not, the reality of the world that has presented itself 

before these institutions is that you really need this. And so when 

you look at the diaspora, one of the problems of taking advantage 

of the home country linkages is when some of, you know, the diaspora go back home, they are faced with a lot of difficulties of the 

lack of electricity, the extensive costs of using the cell phone and 

so forth. So when they are able to operate in a zone that has the 

necessary provisions and also protections, let’s face it, then they 

can actually do business. And that business then does involve importing goods into that export zone and then exporting into the 

country from the zone. So I am a huge supporter of it. I have actually been engaged to design these around the world. I have studied 

at least 110 of them and have done papers on this. And I tell you, 

58

it has changed the economic position of many countries in the 

world. 

Ms. BASS. Okay, thank you. We would like to follow up with you 

and get some of those specific examples. 

Ms. FREEMAN. Thank you. 

Ms. BASS. Mr. Hansen, I appreciated your examples that you 

gave in the beginning. I haven’t had a chance to read your written 

testimony. I am not sure if you put those examples in there. But 

if you didn’t, I would certainly like to have them. I wanted you to 

expound on part of it though because you painted an overall picture of our investment being minuscule. And so I wanted to ask 

you what you thought the level of investment should be. 

And then you also talked about embracing the idea of whole industries of private projects. And I wanted to know if you could give 

an example on that. 

On the issue of branding, I do think that part of the problem is 

the education that we need to do with our own country. I mean, 

when people hear about a problem in Mali, they say, well, then I 

can’t go on a trip to South Africa. If there are riots in Greece, we 

would never think of not going to Paris because there was a riot 

in Greece. So I think part of it is education that we are all responsible for. But if you could expound on that, I would appreciate it. 

Mr. HANSEN. Thank you very much, Ms. Bass. In my written testimony, I gave a figure. I thought that if we invested in sub-Saharan Africa at the rate we do Taiwan in terms of GDP alone, subSaharan Africa should have $2.4 billion more right now. 

Ms. BASS. Was that $10.4 billion or $2.4 billion? 

Mr. HANSEN. If U.S. investment were distributed equally on the basis of GDP, sub-Saharan Africa would have $2.4 billion more 

today, and it would be shifted away from mining, where it is heavily placed, and put into Taiwanese-style industrialization. The 

point being, to give the sub-Saharan Africans income with which 

to buy, not only their own products but U.S. exports. We can’t expect them to buy if we don’t give them jobs to earn money with. 

And I also wrote that if we invested in sub-Saharan Africa the way 

we do in Taiwan in terms of population, Africa would have $761.4 

billion more in U.S. investment. And frankly, that is not an unrealistic amount of money for what could be done over there. And the 

idea being to grow Africa’s internal markets, not just their export 

markets to the U.S., but to grow a vast African internal market, 

which would increase consumer demand for U.S. goods. I have 

found that if Africans imported U.S. goods—just the goods—at the 

same rate that Taiwan does, they would import $988 billion worth 

of goods annually, which is a lot of goods. And I believe your other 

question was on the Aid and Investment Model which I had put 

forward. 

In a writing for the Compendium of the Working Group on U.S. 

Investment in Africa, I put in an example which is referenced in 

the written testimony. It has to do with the Kenyan meat industry. 

There have been successive USAID studies of the Kenyan meat industry. And one in the 1970s gave an apparently huge amount of 

recommendations. And then recently USAID paid for another 

study, which found a meat deficiency in Kenya. And its recommendation—paid for by U.S. taxpayers—was fat cows, low 

59

prices, and cleanliness, which I guess was news to everybody everywhere. So I use that as an example for the AIM model, which is 

what would happen is, USAID would focus on bringing U.S. investment to bear on African industries in order to reform them, expand 

them, and make them competitive. For example, in the Kenyan 

meat industry case, instead of sending out a team to make a study, 

you would have U.S. planners work with the Kenyans to identify 

various theaters—abattoirs, feedlots, transport, cold chain, you 

name it. And then each theater would have a public sector anchor. 

You want to build a cold chain warehouse, okay, fine. That is the 

anchor. But whatever the bidding companies wish to do—if they 

want to add vegetable warehouses as an extra, great. That is great. 

So what you are doing is you are seeding that theater with a public 

sector project but allowing U.S. investors to go in and build related 

projects, partly under U.S. Government cover, which would allow 

then a more gestalt approach and would allow the industry to function and would bring U.S. investment in. 

Ms. BASS. Thank you. 

And then, finally, Ms. Keating, I wanted to know if you would 

tell us a little bit more about your business. And then you talked 

about coordination and how it would be helpful to you and you also 

talked about the hoops that you have to jump through. You talked 

about it in general terms, and I was wondering if you could describe specifically your story. And also if there is any relationship 

between your company and EX–IM, or is EX–IM a model that is 

much too big for it? 

Ms. KEATING. Computer Frontiers, what we initially started, we 

were a government contractor, and we helped to set up the Internet 

in 21 countries. And from that process, we were able to be in all 

those countries. And so that is where I am saying that the link between working for the U.S. Government and also seeing what is 

available and making those relationships with ministers to, you 

know, end users is kind of under the cover of being there and having some protection by the U.S. Government, in essence. What I 

would say is that what I did was not necessarily encouraged by 

USAID for most companies. What happens is that if you are an aid 

contractor, they really don’t want you entering the market because 

of historical trends, which were that if you are there, you know we 

don’t want to be seen as going into the market to take the market 

over. I think those things have been overridden, and we have to 

change our programming and how we are looking at the private 

sector in these countries. 

So I did have some very good managers basically at USAID at 

that point. They knew what I was doing. They knew I was establishing these businesses. And they allowed me in essence to do it, 

and that has turned into a 17-year business and being very productive and doing real development which is providing real jobs. 

So that leads to the other point of it is, is that they can’t buy 

our goods unless they are making money. So they have to be selling 

it to somebody. So let’s create those trade relations with us. And 

that really in essence was the basis of my company. So after those 

10 years in creating that platform of both the regulatory environment for telecoms as well as the Internet infrastructure, we have 

built our companies on top of it. I have people who do Internet proVerDate 0ct 09 2002 14:11 Sep 25, 2013 Jkt 000000 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 F:\WORK\_AGH\050713\80799 HFA PsN: SHIRL
60

gramming. We do mobile money applications. We are on the cutting 

edge of those kinds of things in Africa. And I hate to tell you this, 

but Africa is advanced in terms of mobile money and financial systems in that regard. So that is where we operate. 

We are basically bringing our intellectual property into the mix, 

and we do need more protections for intellectual property. There 

are other things that we want to do that we cannot because we are 

afraid, basically, in all honesty that our intellectual property will 

go missing or become very available and not due to our work. 

The other thing you were mentioning was the hoops that we 

have had to go through. So I have been at this now for 17 years. 

In the initial years in talking to EX–IM, physical exports. Obviously, I am not exporting physical things. It makes it very difficult 

for them. The initial period when we were trying to do deals, the 

deal sizes were $10 million. So there was just no way that that 

would be a deal size that we could do at that point. Now those 

things have started to change. I am hearing that there are different amounts. But still, the reality and the reality reflecting of 

other small businesses of my size that try to really make inroads 

into these groups, it is difficult. And also understanding what they 

need in order for you to make the applications for their assistance. 

I do think things are changing now, but it is just not very apparent. 

When I am talking about one-stop shop, the other issue is there 

are two many trade related agencies, it is just so hard to know 

where to go. And as a small business you have very limited funds 

to do those pursuits. So you might make one attempt a year. You 

pick a certain agency. You try to pursue and see where that goes. 

You gain the knowledge from that. But usually, it has not translated into any real money or pieces out of that. So what would be 

helpful would be to have that coordinated somehow so that we can 

just determine immediately, well, this is not a place where we can 

get assistance, or it is, and then we will put the money toward 

doing that. But those are the things that you run into as a small 

business. 

As I said, you could say that there are many pieces that are 

available to us, but in reality, there are not. So that is part of it. 

I think I covered it for the most part. 

Mr. SMITH. Mr. Marino. 

Mr. MARINO. Thank you, Chairman. 

Good afternoon. And thank you for being here. Dr. Freeman and 

the rest of you, it is an honor for me to be having this discussion 

with you. 

I want to ask the ladies—my father always told me to refer to 

a female as a lady. That is the quintessential compliment. So, ladies, can you explain to me, how are women’s rights and child labor 

considered in expanding U.S. trade with Africa? 

Ms. FREEMAN. I will take a stab at that first. A lot of the ways 

in which U.S. companies enter Africa is through—we have talked 

about the trade promotion coordinating committee in these 20 Federal Government agencies. You add those together with the international organizations, including the United Nations, the World 

Bank, and others, and actually there are provisions that you have 

to agree to about anti-trafficking, anti-sexual harassment. You acVerDate 0ct 09 2002 14:11 Sep 25, 2013 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6633 F:\WORK\_AGH\050713\80799 HFA PsN: SHIRL
61

tually cannot engage in procurements with these entities without 

agreeing to those conditions. 

So I would say they are very clearly set forth. In fact, in contract 

terms, they are called standard provisions, and they are flowed 

down even to subs that you might work with. So I think there is 

a clearer foundation for the protection of those rights. When you 

work with any of these organizations, and very few—my colleague 

here may be an exception from this. Very few firms go alone into 

Africa. They are usually under the umbrella of some funding organization, in which case they are signing up for all of these provisions. And of course, firms have their own set of ethics and standards and their own policies and procedures. And from a human relations point of view, if you look at the manuals of—I am sure even 

my colleague’s company and many other private firms, these provisions of our Title IX follow us overseas. We cannot be exempted 

from it because we are working overseas. So you will see this in 

our own individual handbooks as well. 

Mr. MARINO. Are we adequately monitoring this? 

Ms. FREEMAN. Well, I can say with regard to certain provisions 

like—let’s take anti-trafficking in persons as an example. There is 

a new Presidential directive for which the regulations are actually 

going to come out very soon—or if they are not out already—and 

it will be very seriously monitored beyond simply a firm declaring 

that they are following these precepts. They basically have to 

proactively have, number one, training programs and, number two, 

if they have any partners or subs involved in their work, they actually have to investigate, proactively investigate, what they are 

doing to comply with these provisions. So I think the bar has been 

raised to a higher level to require this kind of investigation. 

Mr. MARINO. Thank you. 

Ms. Keating, what role do women play in Africa in the international business sector? African women? 

Ms. KEATING. I want to first add a little bit to what she was saying. 

Mr. MARINO. Go ahead, please. 

Ms. KEATING. Which is our greatest export is ourselves. And our 

greatest export is how we do business in the United States and carrying that with us. And that is why my comments earlier on 

USAID not wanting 51 percent majority U.S. companies, but that 

brings with it our requirements to adhere to all these types of 

rules. If you don’t have that, you are basically subcontracting to 

people that you have no control as the U.S. 

So, in terms of protection of women’s rights and child labor and 

those kinds of things, those come with us. And that is what I would 

say is that the biggest thing that we really need to do is to be incorporating in these countries, not seeing it as just places where we 

are outsourcing necessarily. So that is in so much the difference 

that I would like to draw. 

Mr. MARINO. Are African women playing a vital role? 

Ms. KEATING. African women play a very vital role in business 

in Africa. And again, in some ways, the reason for doing business 

with women in Africa is that they are more inclined to do the development that you want to get done, which is where women are 

educated and are part of business and earning their own income, 

62

it goes back into the family and to the advancement of their own 

children. And that in itself becomes a development process instead 

of trying to develop externally into all these different kinds of 

projects. Those are the kinds of things, and empowering them in 

that way is a very important force. 

Ms. FREEMAN. Could I just add one point to that? 

Mr. MARINO. Yes. 

Ms. FREEMAN. I was commissioned by the African Development 

Bank to do a study of the role of women entrepreneurs in Africa. 

And this was as a foundational work for them to create an actual 

lending window at the ADB for women in particular. So we studied 

the most successful women to understand how were they able to be 

successful and, conversely, what were the barriers to women entrepreneurs in Africa. And that book was published for the African 

Development Bank, and we will send you a copy. 

Mr. HANSEN. Thank you, Mr. Marino. 

I just want to make a quick comment here. This kind of goes to 

the branding question Ms. Bass had as well, which is that concern 

about African women is very well merited. And gender inequities 

there are quite extreme sometimes, and inclusion is a necessity. 

Also, child labor is a horror, and it should be suppressed. 

But what the concern, though, is, is that we see these issues, 

which are at this point just issues, not actual problems. But we see 

it as an issue of whether we should engage with Africa: Shouldn’t 

they clean their act up, and then we engage? But what happens is, 

for example, in Bangladesh recently, in Dhaka, a factory collapses, 

and they pulled 700 bodies out of the wreckage, mostly women. 

Now, no one says we should never have gone to Bangladesh in the 

first place, we never should have made shirts there. We don’t think 

we should pull out of Bangladesh. We don’t even really call for a 

commission on Bangladesh. But if it were Africa, if that happened 

in Lagos, it would be all over the news. We should never have been 

there. It is immoral. We are exploiting these people, et cetera, because we see Africans as playthings ultimately, and as unable to 

take care of themselves. But the Bangladeshis, they can make 

shirts, and they are tough, and they are part of the game. 

We need to see Africans as everybody else in the world, and we 

need to engage. It doesn’t mean you accept collapsing factories. It 

doesn’t mean you accept child labor. But it means you engage. You 

put them down there. And when you find a child working there, 

you say, get them out of there and get them into school. But you 

have a factory there where someone else can take that kid’s job and 

do it properly. 

Mr. MARINO. Thank you. I yield back. 

Mr. SMITH. Mr. Stockman. 

Mr. STOCKMAN. Yes, thank you. 

I would like to preface to my questions with a statement. First 

of all, I have been to DRC. I have been to numerous countries—

Chad and South Sudan and all over the area. 

And I think, Mr. Hansen, for me, I would appreciate it if when 

you say ‘‘investments,’’ I think we need to, in your numbers, delineate between private and government so that we know. Because I 

think when you talk investments, you are talking both, right? Correct? You are talking both government and private? 

63

Mr. HANSEN. Thank you, Mr. Stockman. The investment numbers that I have come from USTR and CRS, which are presumably 

private investments. In another piece I have done, which is referenced here in the Compendium, I added all of the aid on top 

which would be, if you calculate generously, about $30 billion on 

top of it, essentially nonproductive——

Mr. STOCKMAN. I think some of the statistics show that the West 

has given about $1 trillion in aid. But this is one of the things that 

I think is a challenge; because we are trying to bring medicines 

into—in particular into DRC, the Republic of Congo has changed 

their airport. But when I was going to DRC, the challenge for an 

individual that is not a government high-ranking official is the 

bribes and the hassle you have to go through. And we were there 

as humanitarians trying to help. We were basically assaulted in 

terms of shakedowns. 

I think it is not so much a racist thing as it is as much of a hassle factor. Americans will go to McDonald’s—they are not going to 

sit down for a four-course meal. Americans avoid hassle. I was even 

asked for money from a general there as I was leaving. 

And I think that is part of the problem. It is not that we don’t 

care. It is that we try to avoid those situations. 

Also you keep saying—both Dr. Freeman and Mr. Hansen, you 

talk about being like China. But I know close up and personally 

that the Chinese do not have the Foreign Corrupt Practices Act. 

And I don’t think you would suggest that we emulate their manner 

of giving contracts through bribes and things like that. I mean 

would you suggest that? 

Mr. HANSEN. Thank you, Mr. Stockman. I would absolutely not—

absolutely not ask to have the FCPA repealed. I think it is a net 

asset by far for U.S. investors because if you say, I don’t want to 

pay a bribe, you are arguing over the price. If you say I am not 

going to U.S. Federal prison over this, that is a pretty clear no. So 

that is good. 

I differ with certain of my colleagues in the anticorruption field 

though in calling for a de minimis exception because at this point, 

if you go to Kampala and do a trade show and you show these officials, well, we would like to open a series of clinics here and, by 

the way, have some beer and here are some gifts for your kids, you 

are a Federal criminal, because there is no dollar threshold on the 

FCPA. 

But if a U.S. Congressman—no offense—but if a U.S. Congressman showed up with staff, you could probably hand them a large 

campaign check and that is fine. 

Mr. STOCKMAN. But we can’t accept anything over $25. 

Mr. HANSEN. I may be wrong on this. But one could have someone mail it to a PAC or what have you. We are more sophisticated 

than this. 

Mr. STOCKMAN. No, we can’t take foreign money either. 

Mr. HANSEN. No, no. Not foreign money. No. The U.S. investor. 

I am talking about the U.S. investor could do this, yes. So the point 

is, is that a de minimis exception should be put in there. 

As for the larger question of corruption, I think it is actually 

rather overblown in Africa. It does happen very much. One thing, 

it is actually a function of our lack of investment there because 

64

what people often fail to realize is that Africa, coming from a very 

agricultural background, is basically, you have two choices if you 

want real money, a middle class lifestyle. Well, cassava farming is 

not going to do it, so you have to join the only real industry, which 

is government. And if you succeed in rising in that industry, your 

real income oftentimes, unfortunately, comes from getting it from 

the capital flows that come in. Humanitarian aid is a capital flow. 

People wonder why Africans will get mosquito nets and then go sell 

them. It is because that is the only capital coming in. They are a 

capital deprived environment. It is like an anoxic environment. 

They do not have financial oxygen. 

What we need to do is—we should not worry about them cleaning up their act and the public sector becoming like Switzerland before we go in. What we need to do is get the legal protections. We 

have the savvy investors by the thousands who could go in there, 

make their way in and provide alternatives for the Africans to 

make money. 

Mr. STOCKMAN. I think you are missing my point. My point is, 

I know firsthand—because I was there—the Chinese operate in a 

very different manner than we do. And it does constitute oftentimes—let’s be up front—large sums of money. I was there. So I am 

suggesting to you that it would be helpful if we could somehow address that issue, too, because we are playing on an uneven playing 

field. 

Go ahead. 

Mr. LANDE. I think your question is really the nub of this conversation, and it is right on the mark. I don’t know the answer. 

The reason I say this is as follows: The Foreign Corrupt Practice 

Act, they had a meeting—oh, God, it was just the other day. And 

Symbion Power, GE were there. And they both were saying, thank 

God we have this act. We are able to tell people, ‘‘No, we will go 

to jail’’; people don’t even ask us for bribes anymore. 

The negative side. People don’t come to the Hill and give you the 

negative side because it sounds like you like corruption. Negative 

side: More people come into my office and say, you know, I was trying to do some business in Africa and I had this deal, and I went 

to this U.S. corporate executive. I said, Let’s do it together. They 

said, oh, but FCPA. I said, What do you mean? Well, you have to 

understand. It is administered by the Justice Department. Justice 

is pretty straightforward. They want to find something and so on. 

They don’t look at necessarily what is going on. They say that if 

there is corruption, well, I am a CEO. And some local guy does 

something and so on and it falls under the act, I am responsible. 

I have to exercise due diligence. Well, due diligence for a small 

company may not be possible. You would have to get a whole legal 

group in there to prove—the CEO hasn’t touched any of this 

money. He is not even part of it. He doesn’t know what is going 

on. You have that. 

The British have now decided that you want to cover everything 

that happens, even what you call the doing business bribes, you 

know, just to get something out of customs quickly. Maybe your 

point but on a much lower level and so on. If you are guilty of 

being involved with that, the British say, you can’t list on our stock 

market, which also means you can’t list on the U.S. stock market. 

65

So what we are recommending in Manchester Trade—not that you 

get rid of FCPA because obviously it does something. But that we 

sit and we see, how is it administered? Can it be administered in 

ways as more people are scared to go into Africa, people who really 

want to do the honest thing and want to work on it and so on. 

I grew up in the Rockaway, which has recently been in the news 

for the hurricane. But when I grew up, my neighbor was Carmine 

DeSapio. You may remember him. He was the last Tammany Hall 

boss. We got rid of Tammany Hall. It doesn’t exist anymore. We 

didn’t do it because the British came and told us to get rid of it. 

We did it because we reached that level of economic development 

where it didn’t make sense. We got rid of the corruption in the—

I am looking at Congressman Smith—with the longshoremen. Remember, that was a horrible thing in the ports. 

So I think what Peter and I are trying to say is, yes, there are 

problems. We need some rules. But we also have to accept the fact 

that you make progress through economic growth. And if what we 

do is because we are so concerned about the current situation, we 

prevent U.S. investment, two things happen: One, we don’t have 

economic growth. And who comes and builds this stuff? The Chinese. And they are going to do it worse than we are going to do, 

and you are going to have the factories falling down in Bangladesh. 

You are going to have the roads not working right and so on. So 

all we are trying to say—at least Manchester Trade is trying to say 

is, I would like to go through all our conditions. Have somebody 

take a step back and say, there is nothing wrong with the conditions. They are highly moral. In a multipolar world, where you 

have to work with the Chinese, where we have to work with other 

countries and so on, how do we establish something that is effective, but we don’t shoot ourselves in the foot, how we don’t shoot 

those Africans who we don’t want to work with in the feet and that 

is kind of the balancing we are trying to put on the table. 

Mr. STOCKMAN. I have to agree with you. I think there needs to 

be a little bit of leeway. Our Government, I know from our standpoint, anything we do—when Chris and I go out or whatever, we 

are so paranoid to act. I know for a fact that in Africa, people are 

paranoid to act, because it is safer to do nothing than to do something. And if we could modify that law to where we are not so paranoid to act. 

If you understand, I am very sympathetic to what you guys are 

doing, but I also know on the ground what is really happening. And 

I think that the act and the way it is implemented is hindering 

Americans from saying, ‘‘Why take a chance?’’ I can make a buck 

here the United States. Why go over there and risk a buck over 

there, because I could go to jail? 

Mr. LANDE. Let me give one last quick example because this has 

been mentioned at other congressional hearings and it is correct. 

Normally when a person wants to do business, he invites a foreign 

person to come over to the country and look at the factory and how 

it operates. Normally, when that happens, you say, okay, bring 

your family with you. If you are going to come, let’s spend the day 

in Disney World. It is only about 20 minutes away from where we 

are located. 

66

Under the Department of Justice interpretation is, that could be 

a bribe. It could just be an incidental normal bit of entertainment. 

So I think we are in absolute agreement that I just want somebody 

or some group who cares about Africa, cares about our values, to 

look at these things and say, are we doing it the best way possible? 

We cannot have eight different committees deciding how we are 

going to operate in Africa, all setting up norms, because there is 

one investor, and when he looks at what the eight different committees have done, he is discouraged. And I would say I agree 100 

percent with your point as to—that we have to figure out a way 

to do it that makes sense. 

Mr. STOCKMAN. Dr. Freeman, I know you wanted to say something. I apologize. 

Ms. FREEMAN. Yes. I am just going to say quickly, you asked 

what example should we take from China? Certainly, being corrupt 

is not one of them. 

But here is what I do want to say that is very important and is 

an example we should take from them. When they want to learn 

how to do something, okay, because they have gone from like zero 

to 110 percent in 20 years, okay, how did they do that? Well, they 

learn. They seriously look at every example that is the penultimate 

example of the thing that they are looking at. So if we are good 

in financing, they will call over—they will find out. They have 

teams of researchers who know exactly who is the best finance person in America. And they bring over that person, and they understand. They have whole committees of people who will sit that person down, and they say, what can we learn from you? They are a 

learning institution. 

And so in support of the points my colleagues are making, we 

also need to learn better how to implement and modify, as appropriate, whatever we want to achieve from this act. So that is what 

I was saying earlier, too, about being strategic and looking at our 

industries. We have to take this example from them and say, how 

do we do everything smarter? 

So one little small example on corruption, for instance, let’s say 

this price of water is $1. What they have is a structure in tenths. 

They say, do you want quality one of the water? Because that is 

10 cents. If you want quality two of the water, it is 20 cents. So 

is it corrupt when they say that the water is $1, they negotiate 

downward with everybody individually on what it is that you can 

agree on from a supply and a demand point of view. 

That is an interesting example. So we need to learn what we can 

learn that is good from them, just like they learn from us what is 

good in us. But we are not the only examples of ourselves. We can 

learn from Saudi Arabia. We can learn from Turkey. We have to 

be a learning institution. 

Mr. HANSEN. Excuse me, Mr. Stockman. I know you want to 

move on, but I just would like to point out, I think apart from a 

de minimis threshold on the FCPA, where like buying a cup of coffee is not a big deal, I would recommend that the FCPA not be 

loosened, not be watered down, because it would declare open season on U.S. investors, because they would say: Oh, now the FCPA 

doesn’t apply, so now you have got to pay me some money. So we 

67

have the solution in place. I think removing it would be more harm 

than the disease. 

Also, I just want to point out that U.S. investors are extremely 

law abiding, on the whole. I mean, there are corrupt people. But 

most want to play by the rules. So if we just provided them legal 

protections, that would be something because what we have done 

now—we are in a situation where, let’s say we send someone to Nigeria or Kenya, we don’t provide a bilateral investment treaty, so 

they are at the mercy of the local government. We don’t provide 

them a double tax treaty, so they are at the mercy of the local tax 

authority. We send them out there with no hope of escape. It is basically a Black Hawk Down situation for investors out there. You 

can maybe ask the U.S. Embassy to help you if they care. 

But if you are out there and you get caught and some official 

says, okay, now you have to pay me something, and you are unprotected, exposed and isolated and you make a payment, you are a 

federal criminal. And they will put you in jail. 

So we are telling U.S. investors, go over if you want but don’t put 

a foot wrong. We are not going to help you. But if you put a foot 

wrong, you are going to prison. Who wants to invest in that kind 

of environment? 

Mr. STOCKMAN. I couldn’t leave the country, though, until I paid 

passport fees that were repeated throughout the chain. I am just 

telling you on a firsthand basis, too. As you know, there is a mountain of copper out there. And what the Chinese have done, they 

didn’t even hire the indigenous folks. They moved the Chinese folks 

from China to that area. It doesn’t benefit the local government or 

the local people to do that. 

I, for one, would like to see more American participation. But on 

the other hand, I think we need to understand the investors and 

the people that go over there, they have got challenges, too. They 

want to help out, but they can’t always do that. I yield back what 

time I don’t have back to the chairman. 

Mr. SMITH. Thank you very much. 

Mr. Rush. 

Mr. RUSH. I want to thank you, Mr. Chairman. 

I have been quite interested. This is my first opportunity, I believe, to—not be in a hearing of the Foreign Affairs in this subcommittee—but it is my first opportunity to be in a hearing on this 

particular type nature. 

And I would preface my remarks by saying that the biggest obstacle that I see to a robust U.S.-African trade policy is the question of the meeting of the minds. America, U.S. investors and indeed this Congress have really not made up its mind about what 

it wants to do or needs to do in Africa, I think. And once we make 

up our mind, then it is in our national interest to be vigorously engaged and helping to develop the economy of Africa. And I think 

that we will be better off, and we will see more results, more positive results. 

I don’t see Africa as a continent any more corrupt than I see 

China and I am—I have been made aware of some of that corruption among government officials in China. And I know that the citizenry of different nations in Africa, some of those citizens are very, 

very upset with the corrupt officials and the corrupt government 

68

there. And I feel as though one of the things that we are lacking 

in this conversation and most conversations that I am involved in 

is that we don’t hear from the Africans. And one of the things that 

I have noted being reinforced around the issue of immigration is 

that the African immigrants are the most educated immigrant 

group of all of the immigrant groups in this Nation. And so the diaspora, as far as I am concerned, represents an enormous reservoir 

of intellectual capital and brain power that could be harnessed in 

a serious way in some discussions about how do we move our Nation and the nations of Africa together in some kind of harmonious 

way that would be beneficial to both. 

Mr. Hansen, I was very interested in some of the things that you 

said. And in your testimony, your written testimony, you say, Africa is poorer because the U.S. gives it no way to earn serious money 

in the way the U.S. did for Taiwan. You are using the Taiwanese 

model. Could you be more explicit in terms of the industrialization 

of Taiwan? And it might not be fair to look at this entire sub-Saharan region, but maybe you could take one nation and compare it. 

Mr. HANSEN. Thank you very much, Mr. Rush. 

Well, perhaps looking at the Taiwanese example, Taiwan is very 

much like Japan, South Korea, and the People’s Republic of China 

in that they became, they are known as the Asian tigers because 

they became export-driven economies, and we imported a great 

deal from them to spur their development. 

Now, one way where I see a difference between sub-Saharan Africa and the Asian model is that the U.S. does not care really about 

rights or what have you in these Asian markets and just sent over 

much of our industrial base to Japan, to Korea, and more recently 

to Shanghai, Guangzhou. We did not ask whether they respect 

women or children or care about human rights or abortion or corruption. We didn’t ask any of that. We just sent it over. And with 

results that in my written testimony show, especially for what is 

now a rather fearsome regional and now increasingly global rival, 

the People’s Republic of China, they now have almost twice our 

U.S. investment that we have across the whole of sub-Saharan Africa. They are importing a hundred, I believe $104 billion in U.S. 

products, which is—in fact, all U.S.-Africa trade now is one-third 

of our trade deficit with the People’s Republic of China. 

The reason the PRC can do that and the reason Taiwan can do 

it is that we industrialized them, which allowed them to rise up the 

economic chain and to earn real money. It is like asking like a CEO 

of a Fortune 500 company now to buy stuff; whereas with Africa 

it is like treating the 18-year-old intern and asking them to buy 

stuff. It is not the same scale. 

Where we went wrong and where AGOA is a misdirection—I 

mean, it should be continued, but it is a misdirection strategically—is that we applied the Asian model to sub-Saharan Africa 

without an Asian-style export economy. We said, okay, export stuff. 

But who was there to export? There was no export industry waiting 

to happen. AGOA, as I point out in my written testimony, it is very 

unclear whether there is an intention to help U.S. investors go over 

to start AGOA businesses, and in fact anecdotal evidence around 

town here, when you talk to people, they sometimes say, oh, U.S. 

69

businesses can’t benefit from AGOA. So it is very unclear even 

what our purpose is with that. 

We basically said, okay, be South Korea. Oh, you are not South 

Korea? Oh, well. I mean, we did not take any step to turn them 

into South Korea. We just said be South Korea, and that was foolish. 

Mr. RUSH. Are there any legislative remedies that you suggest in 

order to correct the non-industrialization policy that relates to Africa? Is there some specific, and how do you see an industrialization 

policy that emanates from the U.S. to Africa, how do you see that 

in terms of the forms, shapes, and mechanisms? 

Mr. HANSEN. Thank you, Mr. Rush. 

I know Mr. Lande wants to make a point on this, so I will be 

brief. In my written testimony, I suggest various wording changes 

to the bill to emphasize investment, which is actually to make it 

fully comport with the existing section 4 of the bill calling for investment, and in fact naming investment first. 

As for legislative means, what has to be done is pressure, great 

pressure has to be put on the U.S. executive branch to conclude bilateral investment treaties and double tax treaties across the continent. Preferably they would be in a simplified form or in one multilateral form for all of Africa. That would be a way to do it. What 

absolutely has to happen is whatever gets U.S. private capital to 

Africa and in the hands of private people, not through a Byzantine 

aid industry, which basically ends up enriching folks in Arlington, 

Virginia. I am talking about getting money into the hands, into the 

pockets of every day Africans who are able to do their own business 

and make their own way and create their own economies and their 

own markets. That whatever gets that U.S. capital there to create 

businesses must be done. That will have the effect of creating not 

only profitable U.S. businesses that are involved in Africa but also 

markets for U.S. exports. You can’t sell to a market that doesn’t 

exist. We have to build that market. So I would like to—oh, I am 

sorry. 

Mr. RUSH. If I might, just before Mr. Lande steps in here, I have 

one final question for you. I am intrigued by the, again, by the diaspora. Those who are Africans who are here, who are quite capable, who started small businesses, those who have been trained in 

the best Western colleges and universities, those who have a keen 

mind and keen abilities and character, that really, you know, want 

to see, be successful, not only here in America but also want to be 

successful in Africa, would love to be successful in Africa, how do 

you see engaging those individuals, that asset? And do you—how 

powerful an asset is it in your opinion? 

Anybody, Dr. Freeman, Mr. Lande, Ms. Keating, anybody should 

respond to this. 

Mr. HANSEN. Well, Mr. Rush, I would just very quickly say that 

the diaspora is an amazing asset and absolutely has to be used, but 

Dr. Freeman is a much better authority to speak on that. 

Ms. FREEMAN. Actually, one thing I do want to say about the example of Taiwan’s growth, not just our role in it, but also China 

and its growth is that policies and even institutions did not cause 

that growth. You know what caused that growth? Money. And 

where did that money come from? Their diaspora. The Chinese has 

70

the biggest diaspora in the entire universe, and they poured in 

more money—we talked about export processing zones, for instance. Well, they put in more money in Tianjin in one export processing zone in 1 year than all of the investment in Asia combined 

in that year. That means in one little zip code, okay? 

So we were talking about learning, okay? The Indians and the 

Chinese have learned how to harness very strategically the remittances and the intellectual capital of their diaspora. So what we 

can do to help the African diaspora here is to learn from these examples, support these examples, and help to transport these examples and transplant them, both here among our diaspora and 

among the leadership there. 

Mr. LANDE. Let me go back to your first question, which was 

right on the mark, Taiwan, and why did it succeed in Africa. Two 

reasons. One, it is something called the East African—the East 

Asian growth model where, and again, I don’t want to go debating 

free trade and liberal trade, but the Japanese first, followed by the 

Koreans and the Taiwanese built up very protective barriers, was 

able to first produce for the domestic market, at the same time 

produce for export but keep U.S. products out. And we saw the loss 

of the U.S. television industry. We saw the loss of the U.S. footwear industry while these countries operate. Good or bad, I don’t 

think now we can use an East African—East Asian development 

model for Africa. 

Having said that, it is interesting to me—and there is no debate; 

that is what annoys me a little bit. The Africans have something 

they call localization, where they say we want to give some preferences for our own people to give them a chance to participate in 

the economy, and so on. So maybe we will have some local requirements. Well, as a free trader, teach at Johns Hopkins, that is bad, 

oh, no, no, you have to have the free market determine it. I would 

rather have a discussion, because everybody has protectionism. We 

had protectionism in the years 1900–1912, the McKinley and so on 

kind of tariff bills. So all I am saying is that there are models that 

Africa can follow. 

Now, what can we do to help Africa, because, again, your question focuses exactly correctly. What can we do to get the establishment of supply chains that operate in Africa that is in our interest 

because that is the modern form of where you get your manufacturing. You become part of a manufacturing process. And that is 

where there is a whole group of ideas. The export processing zone 

was one that we mentioned. Let’s get rid of U.S. aid limitations, 

that they can’t help develop them along the way and so on. 

Let us begin to, I don’t know how to put it, I will be very blunt. 

Bangladesh has always been a problem in terms of exports to the 

U.S. of textiles. They have no respect for labor rights at all. That 

is why in these export processing zones that they have, unions 

aren’t allowed to operate, and that is why there is all these complaints that show up about Bangladesh, the fire safety discussions 

we are having now. 

Africa basically comes out of an English tradition, at least a lot 

of the exporters are English, where they have a lot of respect for 

labor rights. In fact, sometimes people say they don’t want to go 

71

to Africa because labor is too strong. Others will say it is more productive that way. 

But, again, if we would begin to play to Africa’s strengths, and 

I don’t care if Bangladesh doesn’t have a preference; they are running around town saying Africa has a preference, we want to have 

a preference. Not my interest and so on. So I would say let’s figure 

out what Africa’s strengths are. Maybe they can’t be as protectionist as East Africa, but at least accept this idea. 

Let me just make one last quick point, and again to go back to 

the really good question that Ranking Member Bass asked and so 

on, and that is, the way that you should apply sanctions is the way 

that we have applied them in the Middle East and in North Africa 

during the recent problem. They should be targeted. You decide 

who are the bad guys and let’s do it. If somebody grabs power, 

Assad, let’s just punish his family; they can’t travel, or we will 

bring different cases against them. And then let’s try to take them 

collectively. It shouldn’t be the U.S. alone anymore. It should be a 

whole group of people doing it along. And then the collateral damage should be let’s agree that we are going to do nothing or at least 

do a study on the impact that is going to minimize Africa’s possibility for industrialization. So if this is going to have an effect on 

industrialization, let’s come up with a different tool. The idea of 

taking away from a country because a dictator is a horrible guy but 

of punishing people by taking away MCC programs, by taking 

away USAID economic development programs, by taking away 

AGOA preferences, taking away trade preferences, which is the 

only way available for them to develop, with all due respect, coming from New York, it is cockeyed, it just doesn’t make sense, and 

that is what we do sometimes. 

Mr. SMITH. Thank you, Mr. Rush. 

Let me just ask one final question, and perhaps Ms. Bass might 

want to say something as well. 

Mr. Hansen, you earlier mentioned in passing at least that when 

it came to China and human rights and trade and the like that, 

and you are right, there was a lack of concern about workers’ 

rights, whether it be the Clinton administration, the Bush administration or the Obama administration, there are no linkages to Most 

Favored Nation status or now PNTR with China. There should 

have been, and unfortunately, that was squandered on May 26, 

1994, when Bill Clinton shredded his own Executive order that had 

laid out very fine, and I think very important, benchmarks on the 

achievement of human rights. ‘‘Significant progress’’ was the language he used in his Executive order, and then he just tore it all 

up, which said to the Chinese Government all these clowns think 

about is profits. And I love profits, but profits, human rights, trade, 

and the non-exploitation of workers ought to go hand in hand. 

So I would raise a question because, again, Dr. Freeman, you 

said all firms entering the African market now have to compete 

with China. Had we stuck to our guns about reforming China, the 

good model that they might be projecting to the world would have 

at least been more favorable toward human rights and intellectual 

property rights and the like. 

Thank you for your very specific recommendation of how we can 

improve the bill. I think, you know, as we go to markup, that will 

72

be extraordinarily helpful. But how do we deal with the exploitation of Chinese workers? I filed with the AFL–CIO some years 

back, and it still went nowhere, an unfair trading practice complaint because of the exploitation of their workforce, 10 to 50 cents 

per hour in China. I mean, no OSHA regulations, an increasing 

problem with arrearages, with not even paying their workers. 

There is just one problem compounding after another, which makes 

it hard for the U.S. manufacturers, small, medium, or large, to 

compete with that kind of cost. The cost of the product is reduced 

substantially. As I think you kind of referenced, or at least hinted 

at, Ms. Keating, the intellectual property issue is very real, and we 

had a hearing in this committee, and I chaired it, on that problem 

in China, once a company markets its product and starts to get a 

foothold in a market, in comes the Chinese Government, and its 

friends in business, and they produce that same product. They rip 

off the intellectual property rights, and we had Luster Products 

here. They talked about this in Nigeria. They held up their product 

and they held up the Chinese fake, and they said, you tell the difference because they have been ripped off, and I am wondering how 

we protect against that. You know, so if you could speak to those 

issues, if you would like, I would appreciate it. 

I do have some other questions, but because it is late, I won’t get 

to those, but please. 

Ms. KEATING. In terms of the intellectual property rights, the 

biggest issue that we have is just that, and it is even more difficult, 

not even a physical product, in software and things that we are developing. So if we develop a mobile money application, it is very 

quick and very easy for them to duplicate it very easily. 

How do we defend against that? Really that is the biggest issue 

that we have, which is that there are no relations between the U.S. 

Government and the African governments in any kind of trade 

practices that would allow them to enforce it or allow the U.S. Government to assist them in enforcing those things because there is 

nothing to enforce. So we are just in the open. We are—and that 

is the problem with bringing any intellectual property from the 

United States into Africa almost everywhere outside of South Africa. 

And that is a huge issue that unless you have these things, you 

have the trade agreements that are going between the different 

countries or Africa as a whole that they sign on to, and in that 

signing, they agree to protect our intellectual property, we are not 

going to get there, and so that is just a major hindrance. And so 

we need those kinds of things in order to even go forward, and that 

is what America has to sell in many ways and what our advantage 

is. So I will leave it at that. 

Ms. FREEMAN. I will just say quickly when I was a little girl hiding under the chairs when we used to have those drills when we 

were afraid of the Russians, well, if we remember what we were 

afraid of, that the Soviet Union might take charge, and they would 

what? Well, what in fact has happened is, it wasn’t the Soviet 

Union; it was China. And we weren’t paying attention. We were 

hiding under the desk, you know, worrying about that eventuality, 

and so now we have arrived at this point in history and in this sitVerDate 0ct 09 2002 14:11 Sep 25, 2013 Jkt 000000 PO 00000 Frm 00076 Fmt 6633 Sfmt 6633 F:\WORK\_AGH\050713\80799 HFA PsN: SHIRL
73

uation where, quite frankly, in my view, what you have asked, it 

is actually not solvable at this time, period. 

Mr. LANDE. Very short and to the point. One, Africa is making 

progress on intellectual property rights. The Nigerians have one of 

the top intellectual property rights offices, and they have come to 

the States and they have visited with us. The Ghanaians have done 

a lot. There is a lot of work going on in Africa over the particular 

issues. It was our company that brought that famous textile example of the printed fabric, which you couldn’t—they even copied the 

name of the company that did that and so on, et cetera. But it was 

an issue, you know, which is a Chinese issue. It was their product 

that was coming in, and so on. We could have done more. 

But Africa, one, is aware of this and they are making steps. But 

what makes it very hard is the fact that the U.S. goes equally 

against all intellectual property rights violations. And that brings 

us up to some really tough issues where the populous are there. 

Textbooks, I am not in favor of anybody copying a textbook, but let 

me be very careful. If I have a choice between going after somebody 

maybe stealing my software and putting it in the government and 

somebody putting out a textbook that is spreading the word I want 

them to spread, I am not sure. 

The most sensitive of all issues is pharmaceuticals, New Jersey 

a tough issue. But how the hell do you deal with that issue? The 

U.S. pharmaceutical companies correctly say, I put in millions of 

dollars, I developed these things, and then they rip them off in Africa, cheap medicine. And the next thing I know, this cheap medicine is now coming in to my developed country markets. The Africans say, ‘‘Excuse me, guys, we need this stuff. We can’t afford it.’’

So, again, I would always come back to the same thing. The general rule doesn’t apply. Yes, we should help the Africans develop 

better IPR standards and so on. The U.S., we should use a little 

intelligence and maybe not go after every single intellectual property right because somebody is yelling, but focus on those which 

are important to us but also on those which are ‘‘deleterious to the 

Africans.’’ That would be my only little additional comment. 

Mr. HANSEN. Thank you, Mr. Smith, for the question. 

A bit of historical perspective is in order just simply to say that 

after the Revolution, the U.S. was decried by Great Britain for 

being a thief of intellectual property and having protected markets, 

and we seem to have done okay as a result. 

Another thing, I think a certain humility has to be applied in the 

face of historical trends. Yes, there are horrendous abuses of labor 

in China, but what will ultimately correct that is not U.S. legislation or U.S. investment trends or whatever, except, you know, on 

the margins. What really is going to do it is the fact that China 

is developing. And now on the coast of China, wages are going 

through the roof, and their workers are going to become scarcer, 

more demanding, and have better rights. So, in a way, history unfortunately will—well, it will correct itself—but unfortunately, 

there is only so much that can be done. 

I think that in terms of Africa, we should not be—we should not 

let concern for these inevitable tragedies prevent us from engaging 

with Africa because that is the greater tragedy. If we don’t do anything with Africa, they will have no economy, and they will be poor 

74

and dying in huts with malaria in the countryside. If we industrialize, if we invest, yes, there will be factory collapses; yes, there 

will be corruption; yes, there will be all that, but it will develop. 

And it will progress to a higher stage inevitably if we keep going. 

I would just simply point out, Upton Sinclair, you know, he wrote 

‘‘The Jungle’’ about Chicago. Chicago was awful. I mean, there 

were like carcasses of pigs in the river and everything. It was a 

nightmare, but now look at Chicago today; it is a glory, because if 

you keep it going, eventually things will develop. That is the way 

it is. We need to engage and we need to develop with Africa, together with Africa. Thank you. 

Ms. KEATING. I just want to add one point. One of the mitigating 

factors that we have is because we are in Africa, we are producing 

the software in Africa. Some of it is U.S.; some of it is African. Because we have African people also producing that, there is—the 

theft of it goes into, I hate to say it, the local networks, which is 

they aren’t going to allow that to happen, they start to talk to their 

own people about this joint product that we have created. So, 

again, it goes back to that joint activity with Africa, and that is the 

only way we can mitigate at this point, and so that works for us. 

And then what we would really appreciate is those trade agreements because what happens for us is if they want to try to bring 

stuff into the U.S. market, which they all do, they won’t be able 

to if they are stealing intellectual property. But anyway, that is 

just a mitigating factor. 

Mr. SMITH. Thank you. 

Ms. Bass. 

Ms. BASS. Well, I just want to also thank you. This was a great 

panel. I thought it was very helpful, all of your input in the discussion today, and I would just like to ask if—today we were talking 

about this specific piece of legislation. But you all know that AGOA 

is on the table as well, and perhaps you could give us in writing 

your recommendations, how this discussion today might be applicable to the discussion that we are having on AGOA would be very 

helpful. Thank you very much. 

Mr. SMITH. Thank you. 

Thank you very much for your testimony and insights, wisdom, 

and very, very fine recommendations. It has been a great panel. We 

deeply appreciate it, and again, I am sorry for the votes that 

pushed this back about 45 minutes. The hearing is adjourned. 

[Whereupon, at 5:03 p.m., the subcommittee was adjourned.] 

(75)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

76

f


80799n.eps
77

Æ


80799m.eps