Datasets:

gtfintechlab
/

CoCoHD_transcripts

	<html>
	<title> - ADVANCING THE U.S. TRADE AGENDA: TRADE WITH AFRICA AND THE AFRICAN GROWTH AND OPPORTUNITY ACT</title>
	<body><pre>
	[House Hearing, 113 Congress]
	[From the U.S. Government Publishing Office]





	ADVANCING THE U.S. TRADE AGENDA:


	TRADE WITH AFRICA AND THE AFRICAN


	GROWTH AND OPPORTUNITY ACT

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

	HEARING

	before the

	SUBCOMMITTEE ON TRADE

	of the

	COMMITTEE ON WAYS AND MEANS
	U.S. HOUSE OF REPRESENTATIVES

	ONE HUNDRED THIRTEENTH CONGRESS

	SECOND SESSION

	__________

	July 29, 2014

	__________

	Serial 113-TR07

	__________


	Printed for the use of the Committee on Ways and Means




	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]







	U.S. GOVERNMENT PUBLISHING OFFICE

	21-110 WASHINGTON : 2016
	____________________________________________________________________
	For sale by the Superintendent of Documents, U.S. Government Publishing 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 20402-001






	COMMITTEE ON WAYS AND MEANS

	DAVE CAMP, Michigan, Chairman

	SAM JOHNSON, Texas SANDER M. LEVIN, Michigan
	KEVIN BRADY, Texas CHARLES B. RANGEL, New York
	PAUL RYAN, Wisconsin JIM MCDERMOTT, Washington
	DEVIN NUNES, California JOHN LEWIS, Georgia
	PATRICK J. TIBERI, Ohio RICHARD E. NEAL, Massachusetts
	DAVID G. REICHERT, Washington XAVIER BECERRA, California
	CHARLES W. BOUSTANY, JR., Louisiana LLOYD DOGGETT, Texas
	PETER J. ROSKAM, Illinois MIKE THOMPSON, California
	JIM GERLACH, Pennsylvania JOHN B. LARSON, Connecticut
	TOM PRICE, Georgia EARL BLUMENAUER, Oregon
	VERN BUCHANAN, Florida RON KIND, Wisconsin
	ADRIAN SMITH, Nebraska BILL PASCRELL, JR., New Jersey
	AARON SCHOCK, Illinois JOSEPH CROWLEY, New York
	LYNN JENKINS, Kansas ALLYSON SCHWARTZ, Pennsylvania
	ERIK PAULSEN, Minnesota DANNY DAVIS, Illinois
	KENNY MARCHANT, Texas LINDA SANCHEZ, California
	DIANE BLACK, Tennessee
	TOM REED, New York
	TODD YOUNG, Indiana
	MIKE KELLY, Pennsylvania
	TIM GRIFFIN, Arkansas
	JIM RENACCI, Ohio

	Jennifer M. Safavian, Staff Director and General Counsel

	Janice Mays, Minority Chief Counsel

	______

	SUBCOMMITTEE ON TRADE

	DEVIN NUNES, California, Chairman

	KEVIN BRADY, Texas CHARLES B. RANGEL, New York
	DAVID G. REICHERT, Washington RICHARD E. NEAL, Massachusetts
	VERN BUCHANAN, Florida JOHN B. LARSON, Connecticut
	ADRIAN SMITH, Nebraska EARL BLUMENAUER, Oregon
	AARON SCHOCK, Illinois RON KIND, Wisconsin
	LYNN JENKINS, Kansas
	CHARLES W. BOUSTANY, JR., Louisiana
	PETER J. ROSKAM, Illinois


	C O N T E N T S

	__________
	Page

	Advisory of July 29, 2014 announcing the hearing................. 2

	WITNESSES

	Ben Leo, Senior Fellow, Director of Rethinking U.S. Development
	Policy, Center For Global Development.......................... 6
	William C. McRaith, Chief Supply Chain Officer, PVH Corp......... 18
	Witney Schneidman, Senior International Advisor, Covington &
	Burling LL; Nonresident Fellow, Africa Growth Initiative,
	Brooking....................................................... 27

	SUBMISSIONS FOR THE RECORD

	Africa Coalition for Trade, statement............................ 46
	African Cotton & Textiles Industries Federation, statement....... 52
	American Sugar Alliance, statement............................... 58
	Brown Shoe 072914TR, letter...................................... 69
	Footwear Distributors and Retailers of America, letter........... 71
	National Pork Producers Council, statement....................... 73
	U.S. Chamber, statement.......................................... 77
	CBI Sugar Group, statement....................................... 86


	ADVANCING THE U.S. TRADE AGENDA: TRADE WITH AFRICA AND THE AFRICAN
	GROWTH AND OPPORTUNITY ACT

	----------

	U.S. House of Representatives,
	Committee on Ways and Means,
	Subcommittee on Trade,
	Washington, DC.
	The Subcommittee met, pursuant to notice, at 2:04 p.m. in
	1100 Longworth House Office Building, the Honorable Devin
	Nunes, [Chairman of the Subcommittee] presiding.
	[The advisory announcing the hearing follows:]

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




	Chairman NUNES. I would like to call the Committee to
	order. Good afternoon. Welcome to today's hearing on advancing
	our trade agenda and trade with Africa. Before hearing form our
	witnesses, I would like to make three points.
	First, we are committed to a seamless, bipartisan renewal
	of AGOA well before its expiration in fifteen months.
	Congressman Rangel and I worked closely in developing this
	hearing--having jointly selected all the witnesses--and we are
	cooperating to develop a plan for AGOA's renewal. To improve
	the program, we are studying possible changes with an eye
	toward strengthening utilization and effectiveness. We are
	listening to stakeholders on issues like capacity building,
	product coverage and rules of origin, eligibility criteria, and
	graduation among others, so that we can determine what changes,
	if any, are appropriate. To assist in our review we have
	requested an extensive study from GAO. In addition, as part of
	this hearing, we are requesting and encouraging additional
	analysis and suggestions from the public.
	Second, to make AGOA more effective, we must help Africa
	address both political and supply side barriers to trade. To
	encourage greater regional and global integration, Africa must
	remove domestic barriers to trade and investment, including
	high tariffs, forced localization requirements, legal
	restrictions on investment, and customs barriers, among others.
	Supply-side constraints such as poor infrastructure, lack
	of regional integration, and other obstacles impede AGOA
	utilization. We are working with Chairman Royce and the Foreign
	Affairs Committee to develop approaches to assist African
	countries in maximizing AGOA utilization. For example, earlier
	this year the House passed the Electrify Africa Act with strong
	bipartisan support. I call on the Senate to act quickly on this
	important legislation.
	Implementing the recently concluded Trade Facilitation
	Agreement would also help Africa address supply side
	constraints and encourage greater investment from private
	sector and development banks. I am frustrated that India is
	blocking adoption of the deal it agreed to last December,
	harming developed and developing countries alike and
	threatening the WTO's viability.
	Third, as we renew AGOA, we should look at ways to deepen
	and expand our trade relationship with AGOA countries. We
	should expand our TIFA and BIT programs, and seek BITs with
	regional groupings. As countries become ready, we should begin
	negotiating FTAs for the most robust trade relationship. At the
	same time, I am concerned by the EU's efforts to withdraw
	unilateral preferences and force African countries to sign
	bilateral agreements. This approach disadvantages U.S.
	companies seeking to do business in Africa and raises serious
	policy and development concerns.
	Finally, the bipartisan TPA bill that I co-sponsored
	earlier this year with Chairman Camp includes strengthened
	provisions on capacity building and development. I call on the
	Administration to work with Congress to pass this important
	legislation.
	Chairman NUNES. I will now yield to Ranking Member Rangel
	for the purpose of an opening statement.
	Mr. RANGEL. Thank you, Mr. Chairman. It is so refreshing to
	listen to a Chairman of the majority to give a statement that I
	don't have to rebut or contest, or to display political
	eloquence in terms of why I have a different idea. You have
	really worked hard, not only on this bill, but what's in the
	best interest of our great country and how we can help these
	struggling countries that for so long have been neglected.
	And I cannot think of a better time to do this as the
	President of the United States has invited 50 heads of the
	African countries to come, not only to discuss the African
	growth and opportunity bill, which we have these experts here
	to share with us, which is the best direction, but also to be
	able to look at the broad question of what contribution we and
	other nations can make to be of assistance to the spectacular
	growth of the economy of these African countries. And, as you
	said, the reports indicate there are some things, a lot of
	things that we can do better, and working together we would.
	In addition to having the heads of states, there are 500
	young people from Africa that have been coming to the United
	States in order to learn more about our system, both in the
	private and public sector. And I can't think of a better way
	than--to improve our relationships with the countries except
	through their young people. I am seeing that you have given
	permission for Congresswoman Karen Bass to share with us, and I
	want to thank you for this courtesy, because no member of this
	Congress has displayed more in terms of more hard work, which
	is the most important thing, but interest in seeing what the
	United States and what the Congress, and more specifically our
	Committee with the Foreign Affairs Committee, in working
	together under your leadership can do.
	And so I want to thank you for your commitment, and also
	thank the witnesses for helping us and directing us to see what
	we can do better. I truly believe, without exaggeration, that
	this is a historic time in our international trade policies.
	The countries of Africa, the last to get on board, and with our
	help I am certain they can catch up.
	Thank you so much, Chairman Nunes.
	Chairman NUNES. I want to thank you, Mr. Rangel. There is
	no one committed more to getting AGOA passed than yourself from
	the time of our first meeting when I became chair of this
	committee. This was your priority and we worked together on
	this. And there is nothing better than having three witnesses
	here that we all agree upon. I want to welcome all three of
	you.
	The first witness is Ben Leo, Senior Fellow at the Center
	for Global Development. Our second witness is William McRaith,
	Chief Supply Chain Officer for PVH Corporation. Our third
	witness is Witney Schneidman, Senior International Advisor for
	Africa at Covington & Burling, and a non-resident fellow for
	the African Growth Initiative at the Brookings Institution.
	Before we recognize our witnesses, our time is limited this
	afternoon. You should limit your testimony to five minutes and
	Members should keep their questioning to five minutes.
	Mr. Leo, your written statement will be made part of the
	record, and you are now recognized for five minutes.

	STATEMENT OF BEN LEO, SENIOR FELLOW, DIRECTOR OF
	RETHINKING U.S. DEVELOPMENT POLICY, CENTER FOR GLOBAL
	DEVELOPMENT

	Mr. LEO. Thank you, Chairman Nunes, Ranking Member Rangel
	and other Members of the Subcommittee.
	I appreciate the opportunity to discuss ways to advance the
	U.S.-Africa Trade and Investment Agenda. This hearing and the
	broader examination of the African Growth and Opportunities
	Act, along with other U.S. policy tools, is extremely well-
	timed. When African leaders and business people come to
	Washington next week, we all expect them to deliver a very
	united message that their most pressing objectives are seeking
	ways to generate more trade and investment with the United
	States.
	My remarks today will focus on four interrelated points.
	First, the global competitiveness of African firms is primarily
	constrained by business climate issues, small market size and
	collusive political economic dynamics. Business surveys paint a
	very clear and very stark picture. The biggest constraints are
	unreliable and costly electricity, high transport costs and
	export processing times and access to capital. Addressing these
	kinds of factors, even if only on the margins, will have a
	greater impact on U.S. trade and investment than further
	expanding AGOA's market access provisions. The key question is
	determining where and how the U.S. can best incentivize and
	support reforms by committed African governments.
	Second, despite clear criteria, AGOA country eligibility
	decisions have not reflected whether African governments are
	establishing market-based economies and favorable business
	climates. AGOA was originally designed as a compact with
	African governments, founded upon a commitment to sound
	economic policies, democratic pluralism and respect for human
	and labor rights. While Congress created these eligibility
	criteria equally, successive administrations have implemented
	them in highly unequal ways.
	In practice AGOA eligibility has been used to promote
	democratic freedoms, which is a good thing, while economic
	freedoms have been basically ignored in the eligibility
	determination process. Going forward, Congress should consider
	conditioning preferential access to the $17 trillion U.S.
	economy upon business climate reforms.
	Third, with a few very important exceptions, U.S. trade
	capacity building programs lack an overarching strategy and
	have been fragmented and under-resourced. What we often find
	are a multitude of very small U.S. Government agencies
	providing sporadic and largely insignificant assistance.
	Moreover, U.S. assistance for regional economic communities has
	been modest, despite their outsized role in facilitating
	regional integration and helping to address the problem of
	small market size. On the positive side, the Millennium
	Challenge Corporation and more U.S. initiatives like Power
	Africa and the little-known Trade Africa Initiative are
	focusing on the right issue sand doing a good job. The key is
	ensuring that they have scale and staying power. Going forward,
	Congress and the Obama Administration should bring greater
	focus and coordination and scale to trade capacity building
	programs in Africa.
	Lastly, the U.S. Government should actively pursue legally
	binding, bilateral investment treaties as an additional way of
	promoting economic freedoms and greater trade and investment
	flows. These treaties can encourage investment by providing
	investors with protections against things like expropriation or
	discriminatory treatment; however, the U.S. has only ratified
	six treaties with sub-Saharan African countries over time,
	which covers a mere seven percent of regional GDP. And, to-
	date, the Obama Administration has not successfully negotiated
	a single, legally binding investment agreement.
	Countries like China and Canada have demonstrated that
	African governments are ready to sign these agreements,
	including major economies like Nigeria. While our peers and our
	competitors have been busy inking investment agreements, USTR
	has been pursuing ineffectual, non-legally binding trade and
	investment framework agreements. It is time that we focus and
	stop allocating very scarce government capacity and resources
	to these inconsequential talk shops and start pursuing real
	agreements that catalyze much-needed investment flows to the
	Continent.
	Thank you very much.
	[The prepared statement of Mr. Leo follows:]

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



	Chairman NUNES. Thank you, Mr. Leo.
	Mr. McRaith, you are now recognized for five minutes.

	STATEMENT OF WILLIAM C. MCRAITH, CHIEF SUPPLY CHAIN OFFICER,
	PVH CORP.

	Mr. MCRAITH. Thank you, Chairman Nunes, Ranking Member
	Rangel and distinguished Members of the House Ways & Means
	Trade Subcommittee.
	On behalf of PVH I want to thank you for allowing me the
	opportunity to testify in front of this Committee. I have
	already submitted my written copy for you to read. I am going
	to talk from these points and try to remain focused on them.
	So my name is William McRaith, Chief Supply Chain Officer
	for PVH. I also sit on the board of the American Apparel and
	Footwear Association. And color on PVH--PVH is one of the
	largest apparel companies in the world. We are headquartered in
	New York with distribution sales in other corporate locations
	in multiple states across the U.S., including Georgia, North
	Carolina, New Jersey, New York, Nevada, Pennsylvania and
	Tennessee. Among others, our company brands include Calvin
	Klein, Tommy Hilfiger, Van Heusen, Arrow, Warner, Izod and
	Speedo, and we are directly responsible for 16,000 jobs within
	the U.S.
	PVH is a dedicated, global corporate citizen. Outside of
	the U.S., we have 3,000 retail locations and provide more than
	14,000 additional jobs. My message today is quite simple. Many
	parts of Africa are ready. They are primed to receive large
	investments that will generate economic growth envisaged by the
	AGOA founders. To get there, though, AGOA must be renewed as
	soon as possible, and for an extended period of time, including
	its third country fabric provision. With the right approach,
	Africa can become a vertically-integrated sourcing region for
	the apparel industry and generate thousands, tens of thousands
	of jobs and added value to their economies.
	AGOA was the right trade policy 15 years ago, but it was
	ahead of its time for business community and for Africa to be
	able to fully utilize it. However, we are now seeing more
	mature and democratic countries, better and lasting
	infrastructure and more meaningful, economic and educational
	reforms starting to take root. Congress must send an
	unequivocal signal to the investor and business community by
	promptly approving a lengthy extension of AGOA.
	Just a very quick story of our own: In April of this year,
	PVH together with several of the largest apparel companies,
	textile manufacturers and stores conducted an exploratory
	business mission to this region. I would say many of those
	companies that went with us were skeptics. They were cynics.
	They really did not believe it was ready for this type of
	investment.
	After visiting sites, looking at infrastructure, and
	meeting with ministries from different countries, our business
	delegation came to the realization that some African countries
	had already laid the foundations necessary to attract
	significant foreign investment and were prepared to undertake
	the commitments necessary to secure socially responsible
	investors. What we saw in Africa reminded us all of some of the
	current production powerhouses we are in today and what they
	looked like 20 years ago. There is great excitement among the
	apparel business community about this very near growth
	opportunity in Africa.
	African nations are on much more of a course than just to
	become pure seamstresses. They can become the world's very
	first example of how to proactively build a fully vertical,
	socially compliant, human rights compliant, ground to finished
	product supply chain. Africa can invest, attract the investment
	in other added value processes, such as cotton growing, yarn
	spinning, weaving and logistics. Countries in Africa will also
	be the beneficiaries of a more inclusive model of investment
	and growth in which socially responsible companies like PVH
	will be able to put in place right from the very beginning
	facilities, norms and values that will guide the work at the
	factories and the relationships between workers, managers,
	associations, civil society groups, governments, and any other
	stakeholders.
	I see my time is a little bit short. I only have three more
	points to make. So if I can just quickly move through them, the
	U.S. can help us in many ways.
	One of those: programs that will help increase the quality
	and yield of African cotton, vocational and educational
	programs to help train workers and management, projects that
	help build interregional connectivity for goods to transit the
	Continent seamlessly will enhance the attractiveness of the
	region.
	Aside from a lengthy AGOA extension, one way to the
	additional certainty for the business community is by extending
	the Third Country Fabric Provision for a reasonable period of
	time and allow the growth of the investments that will make
	this Third Country Provision no longer necessary. As someone
	who has been involved in global operations for over three
	decades and recently had to ponder the question of where is the
	next growth region for the next 20 to 30 years, I believe that
	we now have the answer. It is Africa.
	We must not lose a moment in this tremendous opportunity
	for Americans and for Africans alike. To make it happen, AGOA
	must be renewed soon and for a lengthy period of time. In
	addition, Congress and the Administration must continue to work
	hand in hand to improve and facilitate the creation of programs
	that will strengthen the Africa region. We look forward to
	working with the Members of this Committee, other Members of
	Congress, and with the Administration in this worthwhile goal.
	Thank you, Mr. Chairman. Apologies for the time.
	[The prepared statement of Mr. McRaith follows:]

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




	Chairman NUNES. Thank you, Mr. McRaith.
	Mr. Schneidman, you are now recognized for five minutes.

	STATEMENT OF WITNEY SCHNEIDMAN, SENIOR INTERNA-
	TIONAL ADVISOR, COVINGTON & BURLING LL; NONRESI-
	DENT FELLOW, AFRICA GROWTH INITIATIVE, BROOKING

	Mr. SCHNEIDMAN. Chairman Nunes, Ranking Member Rangel and
	distinguished Members of the Committee, it is an honor to
	testify before you today.
	On the eve of the African Leaders Summit, the moment could
	not be more timely to be considering the renewal and
	strengthening of the African Growth and Opportunity Act. I will
	briefly discuss several critical issues related to AGOA, but
	first it is important to note that AGOA is the cornerstone of
	the U.S.-African commercial relationship, and it provides the
	U.S. with a strategic advantage on the continent.
	Over the course of the last 14 years, AGOA has led directly
	and indirectly to the creation of several million jobs. For a
	continent of one billion people, where the median age is 17,
	this is a significant contribution to economic growth, social
	stability and the emergence of a middle class with a strong
	appetite for American products and brands. There is also a
	strong affinity with the way in which American companies do
	business in Africa in terms of skills development, technology
	transfer, career enhancement and respect for rule of law and
	anti-corruption practices. It is in our strategic interest,
	therefore, that a renewed AGOA contributes to a deeper U.S.
	commercial engagement in Africa, while also encouraging more
	experts from beneficiary countries. As for the most critical
	issues, let me start with the timeframe.
	Most Americans have what might be referred to as a pre-
	dial-up perception of Africa. In other words, their views of
	Africa continue to be informed by the Cold War, before the
	Internet when coups, conflict and corruption were rife. There
	is little appreciation for the rapid growth, the significant
	improvement in governance and the emergence of a middle class
	on par with that of India and China. In order to change how
	American companies view Africa, there can be no higher priority
	than creating a framework of stability and predictability for
	entering the African market. The same is equally true for
	African and other companies navigating the complexities of
	exporting to the U.S. market under AGOA. All of them need
	assurances of a stable and sustainable set of commercial rules.
	For that reason, I support the African Union in its call
	for a 15-year extension of AGOA from 2015 to 2013 (sic). Now,
	many American companies, especially small and medium companies,
	need support to be successful in Africa. African companies
	generally need assistance to fund buyers in the U.S. and comply
	with U.S. regulations. The architects of AGOA anticipated some
	of these problems and created three trade hubs, not only to
	help African companies enter the U.S., but also to facilitate
	American companies.
	The architects of AGOA anticipated some of these problems
	and created three trade hubs to help African companies utilize
	AGOA. The time has come, however, to redefine the role of the
	trade hubs. They need to be restructured into trade and
	investment hubs, so they not only help African companies enter
	the U.S., but also facilitate American companies to capture
	market share on the African continent. To do this, the newly-
	fashioned trade and investment hubs should become one-stop
	shops where the trade promotion activities of our embassies,
	officials from the Departments of Commerce and Agriculture,
	ExIm and OPIC, are closely aligned on a daily basis in support
	of enhancing the U.S. commercial presence on the continent. For
	this to happen, the Administration would have to commit to a
	``whole of government'' strategy for trade promotion in Africa,
	which unfortunately has been lacking.
	Congress would have to play its part and make the funding
	available. This should be pursued with a sense of urgency,
	given the competitiveness of companies from China, India, the
	EU and elsewhere in Africa. Now, it is often said that
	``Capital is a coward,'' which explains why Africa accounts for
	only one percent of U.S. investments world-wide, which is a
	shockingly low number. As part of a reauthorized AGOA, Congress
	should establish a tax incentive to help change the risk-reward
	ratio for American companies by reducing the tax to zero on
	repatriated income by U.S. companies who make new job-creating
	investments in supply chain products in agriculture,
	manufacturing, apparel, technology, clean energy and other
	relevant sectors. Congress and the Administration would reduce
	the risk for American companies to invest in Africa.
	I would just like to touch on one or two more points
	quickly, as I see my time is running out. No issue is as
	central to Africa's accelerated economic development as
	regional economic integration. The U.S. has largely understood
	this, but we can do more to facilitate the flow of goods,
	services and labor across Africa's borders. The principal
	challenge to regional integration comes from an unlikely
	source, and it is the Economic Partnership Agreements, which
	the European Union is compelling African governments to sign by
	October 1st, or African governments face losing their
	preferential access to the European market.
	In fact, the EPAs threaten to undermine much of the
	progress that has been made on regional integration, as they
	would give European goods and services preferential access in
	an African country over goods and services from a neighboring
	African country. They would also discriminate against American
	companies and products. The EPAs present a significant
	challenge to the U.S. as the U.S. is poised to negotiate
	regional free trade agreements throughout Africa, while we are
	discussing today the extension of a non-reciprocal trade
	benefits program with 40 countries on the continent. While it
	is essential that we renew AGOA, we should address this issue
	of this profound asymmetry.
	Last year, the U.S. exported $24 billion worth of goods and
	services to Africa. This translates into support for more than
	130,000 jobs in the U.S. So our relationship with Africa is
	changing from one of donor/recipient to one of mutual gain and
	benefit. Under AGOA in 2013 the U.S. imported nearly $5 billion
	worth of non-oil, largely job-creating goods, almost four times
	the amount in 2001. In both respects, these trends are
	encouraging; but, with a 15-year extension of AGOA, these
	trends can become much, much stronger.
	Thank you for the opportunity and the extra time.
	[The prepared statement of Mr. Schneidman follows:]

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



	Chairman NUNES. Thank you, Mr. Schneidman.
	Because of the Ranking Member's long-time concern about
	AGOA, and he's really been the champion in Congress, I am going
	to yield my time to the Chairman so he can get into the
	questions.
	Mr. RANGEL. I can't thank you enough for your courteous
	consideration, and I want to thank the witnesses for their
	contribution. Legislatively, time is not on our side this year,
	and we have a lot of things to consider as to whether or not
	the 15 years--even though it would give investors some degree
	of continuity, we certainly don't want to put these countries
	in a box that we can't revisit and see what changes have to be
	made.
	We also know that the Third Country Origin of fabric is the
	easiest way that a lot of them want to go, but we also know
	that we want to provide incentives so they would not have to go
	outside of these countries. And the Congress, as you all know,
	we have separated two different committees and subcommittees.
	And most of the testimony appears as though you think our
	Executive Branch is that separated too. And I want to get
	whatever suggestion you can make.
	Here we are, a country trying to maintain peace and
	economic stability in the world and we have an opportunity of
	people who are basically friendly to us. They are in need. They
	want to trade, and whether or not it's bilateral or whether
	it's not this broad, which agency do you think would be the
	best to coordinate these activities; so that, whether we are
	talking about diplomacy, whether we are talking about security,
	whether we are talking about education, whether we are talking
	about electricity and infrastructure, when a patient is sick,
	they don't want to know the specialist. They want to know
	generally ``what are you doing to help me''. And everything
	that you said, it sounds like all of us would say we wish we
	had thought about it, but our Committee does not have the
	expertise. We don't have the experience to know how to go about
	this, even though we are there to provide the tax incentives
	and the structure.
	So, could you--any one of you--suggest to us a sense we
	cannot do it this year? A lot of us will be attending the
	conference. We will have very little input, because it's an
	executive conference, even though we will have the opportunity
	to talk with the representatives of these countries. What could
	we recommend to our Executive Branch as a result of this
	hearing, which the Chairman called, so that we would have the
	hearing before the summit? We won't be able to tell them we
	have a treaty to be signed, but we should be able to tell them
	something before they tell us.
	What recommendations, Mr. Leo, since you had four points?
	Who would coordinate, assuming they all made sense like I did,
	what agency, and certainly what would be the USTR?
	Mr. LEO. Thank you, sir, for the comments and the question.
	I agree with you with the point in terms of a need for very
	close coordination and a strategy to be developed, implemented,
	monitored with a single agency on the hook for accountability.
	And given the breadth of the issues that are very important and
	influential to all the matters that we are talking about, and
	so the fact that there are so many different government
	agencies that have a small, little piece, sometimes a medium-
	sized piece, I think, given that, it has to be driven out of
	the White House within the Executive Branch. And as a person
	who served at the White House in the past on the National
	Security Council, I can understand how that vehicle is
	required. So I think it has got to be the White House that
	drives it.
	USTR can be the lead on a couple of the issues. They can
	lead, along with the State Department, on bilateral investment
	treaties. They can lead on AGOA. USAID and MCC can lead on some
	of the softer trade capacity building assistance, but what we
	have right now is a lack of an over-arching strategy that has a
	continental, regional, and country-specific approach to it. So
	I think, first, White House needs to be the driving force; two,
	needs to have a strategy including on trade capacity
	assistance; and then, three, have within at least the Executive
	Branch, budgetary authority attached to it.
	Obviously, Congress will have the final say on where the
	money comes and goes, but within the request needs to have some
	data authority attached to it, because money is what is going
	to drive things on a lot of these vehicles. And then lastly, at
	the country level, I think the U.S. Ambassador needs to be in a
	position to approve all of the government agency actions that
	involve this agenda, and that's hit or miss right now.
	Sometimes that happens, but I think the Ambassador has got to
	be the final say for country-level activity. But back here in
	Washington, it has got to be driven by the White House.
	We haven't had that these last 14 years, and we need to
	have that going forward, whether it is investment trade and
	policy as well as trade capacity building assistance.
	Mr. RANGEL. Thank you.
	Mr. Chairman, after the Members have all had an opportunity
	to inquire, I would like to hear from the other two witnesses.
	Thank you so much.
	Chairman NUNES. Thank you, Mr. Rangel.
	Now, I recognize Mr. Reichert for five minutes.
	Mr. REICHERT. Thank you, Mr. Chairman. Sorry I missed some
	of your testimony. We all have other venues we have to run to
	and come back to. I want to follow-up, I think, on a little bit
	of what Mr. Rangel was talking about. I am guessing I am going
	to be heading in the direction of some strategies, but specific
	to a certain issue of growing exports. So I support a timely,
	seamless renewal of AGOA, and all of us do.
	In recent years some countries have begun to develop AGOA
	export strategies that identify measures that could be taken to
	promote a greater use of AGOA benefits. An example of that
	would be Kenya has developed a national AGOA strategy focused
	on diversifying its exports, easing barriers to exporting, and
	further strengthening ties with the United States and U.S.
	businesses. Specifically, this includes looking at ways to
	improve infrastructure, increase exposure by raising the
	profile of Kenya products, and reduce burdensome regulations.
	The problem is that most countries still don't develop
	these strategies or look at AGOA strategically. And you
	mentioned some of your strategic issues, continental, regional,
	country, the Ambassador's involvement and the involvement of
	the President. And I'm guessing that all of those components
	certainly would apply to helping in this arena. Is there
	anything that is more specific to encouraging other countries
	to sort of follow the pattern that Kenya has sort of presented.
	Anyone?
	Mr. SCHNEIDMAN. Thank you very much for that, I think, very
	important question.
	The annual U.S. AGOA forum, I think, provides a great
	opportunity for every country to come forward with their
	national AGOA export strategy, and I think we have seen where
	certain countries, you know, are using the Internet much more
	effectively, and certain governments are using the Internet
	much more effectively to post contracts in national resource
	sector. And I think that we can make a concerted effort in our
	dialogue with AGOA beneficiaries, not only to have the develop
	national strategies on AGOA exports, but to post them on the
	ministries of trade.
	And maybe they can also be posted on AGOA.gov, our UST, our
	website. And if these AGOA strategies are developed in the
	right way, the result of a consultation between local, private
	sector, civil society government, other stakeholders, I think
	they could be terribly effective. So I would like to see over
	the next two or three years that every AGOA beneficiary come
	forward with a national strategy that we can understand and
	that we can measure progress against.
	Mr. REICHERT. Other comments?
	Mr. LEO. Yeah. I would add one or two things to that. I
	think underlying your excellent question is African governments
	have the ultimate responsibility to come forward with their own
	strategies that will build upon and seize the opportunity of
	preferential access to the U.S. market. And within that, I
	think the U.S. Government should be prioritizing its engagement
	and its very scarce assistance dollars on those governments
	that have demonstrated a strong commitment to reforms and
	action. So in the case of Kenya coming forward with its
	strategy and hopefully taking very concerted actions as well, I
	think that is a great indication of a strong partner for the
	U.S. to engage with and support through a variety of different
	tools. So I think the first action has to come from African
	governments.
	Within that context on our side, going a little bit further
	than what I mentioned before, when we are thinking about trade
	capacity building assistance, I think there is a great
	opportunity to work within these strategies, and, if required,
	to supplement them with constraints analysis--growth and trade
	constraints analysis. I mentioned the political will to
	implement reforms. I have to look at that, opportunities at the
	sector level for greater trade as well as the ability to
	attract investment.
	I think it's those kinds of things that need to be guiding
	principles when we are determining where scarce resources
	should go. But it all needs to flow from governments stepping
	up and coming forward with strategies, but, more importantly
	than strategies, action.
	Mr. REICHERT. Thank you very much, Mr. Chairman. I yield
	back.
	Chairman NUNES. Thank you, Mr. Reichert.
	Mr. Neal is recognized for five minutes.
	Mr. NEAL. Thank you, Mr. Chairman.
	Mr. Rangel and I, I think, were the only two here when this
	was actually signed into law, and we were the original
	supporters of AGOA. And the result has been encouraging, not
	just on the engagement front, but on the economic playing field
	as well. It has been estimated that there have been 1.3 million
	jobs created in Sub Saharan Africa, and U.S. trade with AGOA
	nations has grown by 300 percent from 7.6 billion in 2001 to 24
	billion last year. But there remain significant barriers to
	trade with Africa, including high tariffs, forest localization
	requirements, legal restrictions on investment and custom
	barriers amongst other issues.
	I think that there will be an opportunity when we look to
	extend AGOA to address some of these issues in a vigorous
	manner, but Dr. Schneidman, let me speak specifically to a
	question you raised in terms of how repatriation might spur job
	creation. As you know, that argument over repatriation has been
	offered in a flattened, round manner in this town for a
	considerable period of time, and it is in the background and
	much of the public debate.
	Many argue that repatriation would rescue a lot of money
	that is sitting offshore with tangible assets that could be
	better used here at home. But there's another debate as well
	that corresponds to it, suggesting that essentially if we do
	any sort of repatriation right now, you will never get tax
	reform. People will just write, once again, for a tax holiday,
	and inversions will continue to move along at the pace that
	they are currently embracing.
	So I would give you some time to explain your repatriation
	proposal.
	Mr. SCHNEIDMAN. Congressman Neal, thank you very much for
	that very important question. You know, this is an idea that
	actually a number of us have been considering for a long time
	and there are several components to the answer.
	One, I think we should think of a tax credit, a tax
	incentive as a spur to economic development in Africa, much
	like in Puerto Rico in the 1990s. We used a tax incentive to
	attract American investment there. I think the same dynamic
	would occur in Africa. There are going to be some 40 million
	jobs shifting from China and elsewhere to Africa by 2040, and I
	think U.S. companies need to be part of that. And if we go to
	zero on a tax incentive, that would be a signal to the tens of
	thousands of American companies who continue to see Africa as a
	continent in crisis, that there is something different going on
	there.
	And I think that would help American companies get into the
	game on the Continent in a very constructive way. And if they
	start making investments in agricultural investments, in
	manufacturing, in technology, I think that will have profound
	implications for economic development in Africa and I don't
	think it would be zero sum for the United States. I don't think
	it would be taking jobs away, and it would provide an
	incentive, not only to invest, but if it's invested in a job-
	creating project on the Continent, it generates a profit. That
	money comes home and it is used constructively to invest in
	jobs here. I think that is a win-win, and I think we have to
	move to a new paradigm.
	We have that opportunity now, with the reauthorization to
	ask the question, how do we get more U.S. investment into
	Africa. And I think we do that by lowering the risk and
	increasing the return for American companies, and I think that
	would be the kind of incentive that would help American
	companies transfer technology, create jobs, deepen our
	connection with a continent that is rapidly emerging, and a
	continent with whom we have little contact and with whom we
	should have much, much more. So I think it would cost fairly
	little.
	We have done some studies on that and I think the return
	would be quite significant, and it would build on the good
	trust that we have with many African governments. And they
	would see that we are truly committed to moving to this new
	relationship, one of mutual benefit where we can talk about a
	mutual partnership in a number of areas, not only economic
	development.
	Mr. NEAL. Thank you, Mr. Chairman.
	Chairman NUNES. Thank you, Mr. Neal.
	Mr. Buchanan is recognized for five minutes.
	Mr. BUCHANAN. Thank you, Mr. Chairman. And I want to thank
	Chairman Rangel for his leadership. I notice you have put a lot
	of energy, as the Chairman mentioned. So I appreciate your
	effort, and I agree with you. It is nice that we can find a way
	to come together once in a while. I like that for the sake of
	America.
	Let me just mention we all have seen the numbers about the
	jobs and the three-fold growth. I have had an opportunity in
	the last, probably couple, three years. I have been in 10
	different African countries, most of them that have AGOA. And
	the general feeling over there is there is not a lot of
	enthusiasm on their side. You know, frankly, there is not a lot
	of enthusiasm on our side. I think this has to be looked at in
	a much broader context.
	We need to really engage the Administration, get more
	involved. I had met a couple of equity companies from New York
	that were in Ethiopia that were doing very well. They were in
	cement and block. They don't have access to capital. And, as
	you mentioned about China, it was my observation--pretty much
	every country I was in--China was building facilities,
	primarily palaces and government facilities for a lot of
	different places all over Africa. It was pretty universal from
	that standpoint.
	We are making a commitment more in terms of healthcare and
	other things that we are involved in, but I think it is an
	enormous opportunity. I think three times the amount of growth,
	from eight billion to 25 billion, is not exceptional. I think
	there is a real opportunity to go forward, but we really need
	to take a look at AGOA in general. I can just tell you, and
	like I said, I don't mean to be redundant, but it was pretty
	universal, talking with a lot of heads of states and business
	people over there. They liked it, thought it was okay, but not
	great, and I think we really needed to take a look at what more
	we could be doing.
	So my question I guess to all the panelists is what are a
	couple of things that you would recommend that we might do
	going forward to make the difference, to bring some more
	enthusiasm. Because I would like to see us build a better
	partnership with Africa, and there's other countries, like
	China and others that are fully engaged over there. And we
	don't want to find ourselves in five or ten years in third
	place.
	So, Mr. Leo, what are your thoughts?
	Mr. LEO. Thank you, sir, and I think you raised what is a
	very core, fundamental question about our U.S. policy towards
	this very strategic and dynamic region. In direct response to
	your question, I think there is a couple of things that we
	could do that would bring our engagement and our relationship
	to a higher level.
	First, before going into the specifics, though, first, it
	is not surprising that you have heard from the heads of state
	that you have met with about the need for economic engagement.
	When you look at existing surveys of ordinary African citizens,
	over 70 percent of them across the continent cite economic-
	related issues as their most pressing concerns, that they want
	to have their governments focus on. And as you would expect as
	related to that, there were external partners, and this is the
	issue African leaders are totally focused on it. So as a
	result, along with the very significant opportunities now and
	in the future, this is where we should be focusing our
	attention much more than we are today. So, what are the pieces?
	One, I think a seamless extension of AGOA. I think that is
	pretty straight-forward. I don't think there is a lot of
	controversy on that. Two, the pieces that I mentioned before in
	terms of making our trade-related assistance much more
	strategic and focused on the most pressing constraints to a
	firm's ability to be globally competitive; three, following the
	leadership out of the House with the Electrify Africa Act,
	focusing on those kinds of constraints; and, with that, the
	reauthorization of the Overseas Private Investment Corporation.
	If African governments and leaders and businesses are focused
	on attracting investment, OPIC is one of the best ways to do
	it.
	We need the Senate to move on the Energize Africa Act,
	which will do a multi-year reauthorization, but also give OPIC
	additional tools. They don't need more money. They don't need
	more appropriations. They need more flexibility and tools to be
	more effective and scaled. So I would unleash OPIC as another
	piece.
	I mentioned bilateral investment treaties. That's another
	tool that is very low cost. It is basically staff and travel
	expense to be able to do this. It is not billions of dollars.
	Witney had mentioned the risk profile. Well BITs are one
	way of addressing that issue at almost zero cost to taxpayers.
	Mr. NEAL. I would like to get some additional comments, Mr.
	McRaith.
	Mr. MCRAITH. Yes. So it is a great question and I don't
	want to kind of undermine the discussion that has just been
	had; but, what I would maybe go back and focus on is the fact
	that we are at a moment in time today that is different to
	where we were 15 years ago. So you could say AGOA failed. I am
	not sure what the appropriate terminology is.
	If you look at my industry, the apparel industry, we failed
	$24 billion worth of AGOA-driven trade, only of which 900
	million of it is from the apparel sector. A labor intensive--in
	fact, generally the first mover, most labor intensive industry
	in the world, and it has typically led the way into most
	developing countries. The time is now. It wasn't right 15 years
	ago. It is right today. So it will be the private sector that
	actually drives most of this, and we need the on-the-ground
	ambassadors who, in Ethiopia, were incredibly supportive of the
	work we did there on a recent trip in Kenya, similar in Uganda.
	So I think that we have got to help the nations shake off the
	old AGOA, because I think they languish in it. It didn't work.
	There is no energy around it. You go to Africa. China is
	present everywhere.
	Mr. NEAL. Everywhere.
	Mr. MCRAITH. Europe is present everywhere. America is MIA
	at this point. We are missing in action.
	Mr. NEAL. That's my point, I think.
	Mr. MCRAITH. But renew AGOA, because everyone is looking.
	Everyone is ready to go. However, when you think of September
	2015 as the renewal date, the renewal date is today, because it
	takes us a year to figure out what we are doing there. We are
	ready to go. We are ready to go. We are ready to move, and this
	is sitting right in front of us. And, quite frankly, if we do
	not renew AGOA, it is not about the timing of entry. It is
	about the exit.
	Mr. NEAL. We are probably out of time, but that was good.
	Do you want a quick comment?
	Mr. SCHNEIDMAN. Yes.
	Chairman NUNES. Just quickly, Mr. Schneidman.
	Mr. SCHNEIDMAN. I will tell you, Congressman. Let me just
	mention two things. One, I agree fully with the comments right
	here that we need to get the framework done in place. Renew
	AGOA as quickly as possible. My second point is I think we have
	to stir people's imagination, and that was done on Sunday when
	the U.S. African development foundation gave 36 grants of
	$25,000 each to the Washington Fellows who are here as part of
	the Young African Leadership Initiative.
	We need to take that to scale, and I think if we can be
	seen as catalysts of entrepreneurship, catalysts of innovation,
	that's what America does best and that is what Africa is so
	thirsty for. So I think we can play it a number of different
	levels at the same time, but we just have to get going to do
	it.
	Mr. NEAL. Thank you.
	Chairman NUNES. I thank the gentleman.
	Mr. Blumenauer is recognized for five minutes.
	Mr. BLUMENAUER. Thank you very much, Mr. Chairman, and I
	appreciate the way that you and Mr. Rangel have organized this
	hearing. I am sorry I was called away from one, but I had a
	chance to review the testimony.
	I appreciated, Mr. McRaith, your reference to
	sustainability, and there was some acknowledgment of
	environment. But I want to seek feedback from each of you,
	because my limited involvement with the African continent, I
	have only traveled there a few times. Although I did get quite
	an experience through the eyes of my daughter who was a Peace
	Corps volunteer for two and a half years, and then traveling
	with her, watching it from the other side, and the
	conversations I have had with elected officials from Africa.
	I am deeply concerned that we use this as an opportunity to
	put a focus on sustainability, on environmental protection,
	because some of the most egregious practices imaginable are
	taking place, and we are watching. I think the case is clear
	that there is going to be rapid economic development and there
	should be. And we certainly are not interested in holding
	people back, but there are alternative paths. And I would just
	appreciate any of you elaborating on this point, about how we
	should approach this agreement as a vehicle to highlight
	sustainable environmental practices, be able to incent the
	right things, and perhaps a signal to not engage in some of
	this destructive behavior that we are seeing.
	Mr. MCRAITH. So, Congressman, maybe I can take a response
	to that. So, again, I am going to focus my response around what
	we refer to as the EAC and Ethiopia, so the Northeastern Region
	of Africa. And, you know, so there are some givens on
	sustainability. You are looking at countries between Ethiopia,
	Kenya and to some degree into Uganda. And I know Ethiopia is
	not part of the EAC, but hopefully will be soon, countries that
	are virtually 100 percent sustainable energy today, either
	hydro, wind, or eventual thermal energy that they will have put
	into place. So already I would say they are ahead of many
	countries in these manufacturing powerhouses that exist today
	in the term ``sustainable''.
	What I would also say is for 30 years from the demise of
	the European and U.S. manufacturing base for the last 30 years,
	companies like ourselves and those partners that we work with,
	we've had successes and we have had many failures. But we have
	learned from every one of those. And, you know, its
	sustainability, just corporate social responsibility of which
	sustainability is a part, was a major theme of the trip that we
	were on.
	In fact, we had the opportunity to meet with the presidents
	of Uganda and Kenya and the Prime Minister of Ethiopia, and the
	simple question that we asked them was in 10 years from now how
	do you want people to perceive the brand of your company? So
	when people say ``Brand Ethiopia,'' how will they talk of Brand
	Ethiopia? Because the decisions you make today are going to
	determine how people think of it in 10 years. And we have
	processes in place today, the accord and the alliance.
	In Bangladesh, we are retroactively trying to correct some
	of the things that were not done appropriately, by engaging,
	but--not by stepping back and saying there are issues we can't
	engage, but by actively engaging in bringing the right socially
	responsible partners to the table. Again, I would argue this
	will become a showcase in the world as to what sustainability
	could look like, what human rights compliance could look like,
	but we will do it through our presence.
	Mr. BLUMENAUER. I see my time is almost expired, but I
	would welcome elaboration from any of you on those elements,
	notwithstanding, for example, in Ethiopia where they are
	aggressively pursuing hydro. I mean there are lots of practices
	there that gave me pause, and that didn't appear to be
	particularly sustainable, notwithstanding the energy.
	If there are elements that you see going forward with the
	agreement in a way that we can provide the right signals and
	incentives, as well as we've been doing a lot of work with
	illegal logging and having some problems with Peru these days--
	we thought we had worked out in the Peru Free Trade Agreement.
	Thoughts that you have that could be incorporated here would be
	deeply appreciated.
	Thank you, Mr. Chairman.
	Chairman NUNES. Thank you, Mr. Blumenauer.
	Mr. Smith is recognized for five minutes.
	Mr. SMITH. Thank you, Mr. Chairman, and thank you to our
	witnesses for sharing your time and expertise with us today.
	And I don't want to repeat this among the items that have been
	addressed by my colleagues. I certainly do want to add,
	perhaps, emphasis that I am encouraged by various efforts that
	can hopefully build more capacity. And I think there are great
	opportunities for the future here. And as we do work through
	the customers' challenges and so forth, I am just wondering
	about some additional barriers that exist, specifically, with
	South Africa, Nigeria, and members of the South African
	development community as it relates to unscientific sanitary
	and phytosanitary and other tariff or non-tariff barriers to
	agriculture, our agriculture exports. Can any of you reflect on
	that a bit?
	Mr. SCHNEIDMAN. If I may, Congressman, this is an issue
	that we have looked at carefully, and I think there is a
	feeling among a number of our poultry producers, for example,
	that South Africa does practice unfairly--has unfair practices
	as it concerns U.S. poultry products going into the country.
	And this is a problem, and I think we really need to engage the
	South Africans in a very sustained and serious way so that we
	can level the playing field, because South Africa is a very
	important partner to the United States.
	We tried to develop a free trade agreement 2003, 2006, and
	it didn't work. South Africa has free trade agreement with the
	EEU, and it suggests to me that we really haven't--we haven't
	sorted out our relationship. So there are a number of issues,
	and I would like to see us really take a step back, engage in a
	sustained exercise between the U.S. Government and the South
	African Government, to really chart what our commercial future
	looks like and how we get sort of a ``post to go on''
	relationship. Because I think it is going to start there, and
	we haven't done a good job to really embrace that challenge.
	Mr. SMITH. Okay. Mr. Leo, in your testimony, you mentioned
	that preferential access under AGOA should be contingent on
	noticeable economic improvements. Would you suggest that these
	improvements would include ironing out these disputes based on
	the sanitary, SPS, if you will, standards or various trade
	policies relating to that?
	Mr. LEO. Thank you, sir, for the opportunity to comment on
	this. In full transparency, I am not intimately familiar with
	this set of issues related to South Africa. In terms of the
	eligibility requirements, though, more broadly, I think there
	is a couple of guiding principles that should be applied if
	Congress decides and the Executive Branch decides to go in this
	direction. I think it needs to be real and transparent in terms
	of the principles that would be applied to all countries and
	would be tracked by third-party data that's public. So in
	essence it is apolitical in terms of, action has either been
	taken or it has not been taken. And then along with that there
	would need to be a transition period so that African
	governments actually have the opportunity to address any of the
	issues that are being tracked and then implemented in the
	country determination process.
	Whether the issues that you raised should be a part of
	those specific criteria that are related to the business
	climate or other operating climate issues could be debated,
	could be discussed and maybe adopted later. At this point, I
	focus more in terms of what the guiding principles should be
	with specifics that could be fleshed out later, if the
	``parties that be'' decided that this is a sound way to go,
	which I believe it is in general terms.
	Mr. SMITH. Sure. And I would very straight-forwardly
	suggest that the more we can stick to the scientifically based
	standards, the better off everyone is, whether it is consumers
	in another country who would consumer our products that are
	safe. We do want to focus on these standards that we have been
	able, I think, to achieve some progress in ironing these things
	out with some other countries. But it is something that I think
	needs addressing, and not just with this issue, but others too
	as we do move forward.
	Thank you, Mr. Chairman. I yield back.
	Chairman NUNES. I thank the gentleman.
	The gentlelady from Kansas, Ms. Jenkins, is recognized for
	five minutes.
	Ms. JENKINS. Thank you, Mr. Chairman, and thank you all for
	being here.
	The Peterson Institute forecasts that the Trade
	Facilitation Agreement could add 500 billion to the GDP in
	developing countries; yet, India and certain African countries
	have balked at implementation. For Africa, in particular,
	implementation of the TF agreement holds potential to reduce
	barriers to intra-African trade and to promote Africa's
	integration into global supply chains.
	We are all watching the upcoming implementation deadlines
	and hope all countries promptly and fully adopt the TF
	agreement. And, gentlemen, I would just be interested in how
	would implementation of the TF agreement promote regional
	integration in Africa and help to address supply side
	constraints.
	Mr. Leo.
	Mr. LEO. Thank you. Thank you for the question, and I think
	it is a really big, important issue. And right now I think it
	is a quite difficult issue in terms of where those negotiations
	are and where some of the positions are.
	I think within the trade facilitation agenda, everyone
	agrees that it is critical for the issues that you talk about
	as well as U.S. businesses to be able to operate. Whenever I
	talk to U.S. businesses, this is actually their number one
	issue that they want to get focused on. So I think it would
	have a big impact. I don't have any great ideas in terms of how
	we want to get from where we are now to where we need to be
	beyond some just general points about needing to engage with
	all of the major players who are driving the continental
	positions that are feeding into the WTO and some of the back
	channel discussions. But it is an issue that needs to be put
	behind us as quickly as possible so we can focus on the
	substance and addressing some of the underlying issues that are
	holding back or constraining opportunities now and in the
	future.
	Ms. JENKINS. Any of you have any additional thoughts?
	Mr. MCRAITH. Yeah. So I will give it from an Apato
	perspective, you know, because one of the challenges--we often
	refer to Africa in some cases as if it was a country, and it's
	clearly a continent of significant size. And what we see within
	Africa is we see different trade blocs emerging, COMESA, the
	East African Community, SADIC, has been in place for some time,
	and we continue to see the growth of those trade groups. And
	our own encouragement--and again I'd go back to the discussions
	that we have been having there--is how do we now think of
	Africa's regionalized, regional locations that include multiple
	countries that allow trade to flow freely in any direction, so
	across-border trade, unrestrained, untaxed, no-duty.
	What I would tell you is from our perspective in Northeast
	Africa, we were struck at the level of the commercial
	ministries and just how focused they were on resolving these
	cross-border trade negotiations. So we walked away with the
	rest of the group, highly encouraged where all of Africa might
	have free trade movement within their collective regions. This
	was going to be solved and addressed; and quite frankly with or
	without us, it was going to be addressed.
	Ms. JENKINS. Okay. Mr. Schneidman?
	Mr. SCHNEIDMAN. Thank you for the question. I have just a
	brief comment. And it is: I think we need to make progress. We
	need to move forward in areas where we can make progress. The
	Administration has proposed a trade and investment treaty with
	the East African Community, and I am hopeful that we are able
	to conclude that very soon, and then that becomes a model. The
	benefits of that relationship becomes a model to other regions
	on the Continent, that hopefully would provide an incentive of
	the benefits of working more closely with the United States,
	because I think that is a most effective demonstration of what
	the U.S. has to offer as a trading partner.
	Ms. JENKINS. Okay. Thank you. I yield back.
	Chairman NUNES. I thank the gentlelady.
	The gentleman from Indiana, Mr. Young, is recognized for
	five minutes.
	Mr. YOUNG. Thank you, Mr. Chairman, for your leadership on
	this issue. Ranking Member, I appreciate your longstanding
	interest and leadership on this issue as well.
	Chairman NUNES. If the gentleman will yield, I forgot to
	introduce you also that you will be representing our Committee
	at the AGOA meetings next week. And I want to thank you for
	that, representing the Republican side.
	Mr. YOUNG. Happy to do it, and I found your testimony here
	today quite instructive in preparing me for visiting with some
	of these African dignitaries in getting some more context and
	texture with respect to reauthorization. Also in addition to
	that duty and responsibility, which I am happy to have, I am a
	co-chair of the Transatlantic Trade and Investment Partnership
	Caucus here in Congress. So on a periodic basis, I will visit
	with European leaders, diplomats, trade ministers, and so
	forth, with a few of my other colleagues.
	So the intersection of U.S.-EU relationships, trade
	relationships, U.S. African trade relationships to me is quite
	interesting; and in fact we are having a TTIP caucus meeting in
	less than an hour. And so my line of inquiry here is directly
	related to that subject matter. In recent years, the EU has
	pushed African countries out of its own unilateral preference
	program and into reciprocal, bilateral trade agreements. The EU
	calls them economic partnership agreements. Of particular
	concern, the tariff preferences and the EU South Africa EPA
	have largely entered into, force--In U.S., exporters are at a
	significant disadvantage in losing market share.
	The EU is pushing EPAs with many other AGOA members that
	would further disadvantage U.S. exporters. While Congress has
	never required that AGOA countries provide reciprocal access to
	U.S. exports, the fact that some are now offering this
	preferential access to the EU, but not the United States has
	raised serious concerns.
	Mr. Schneidman, what can we do to address the EU's actions?
	Mr. SCHNEIDMAN. Thank you, sir, for I think one of the
	central questions in U.S.-African and U.S.-EU trade today. I
	firmly believe that this should be a topic in the U.S.-EU
	dialogue in the TTIP negotiations. How is it that we are
	offering the Europeans to create the largest free trade area in
	the world, when they are basically compelling African
	governments to accept these EPAs that basically shut us out of
	the African market?
	That is a pretty stark dynamic that is in place, and I am
	just stunned that the Administration really hasn't embraced
	that more. And I think, really, we need to start with EU,
	because there has been a lot of opposition in Africa to these
	EPAs. And many of the African governments really have had no
	choice but to sign on to these.
	Mr. YOUNG. Right.
	Mr. SCHNEIDMAN. So I think, you know, we need to engage the
	African governments as well. I think we need to do this in the
	U.S.-EU context, and a U.S.-African context, but it just stuns
	me that we are talking about offering a non-reciprocal benefits
	to Africa at the same time that the EU is talking about a
	reciprocal relationship. And to Africa's benefit, I think it
	should be harmonized more directly, and I think the first place
	to start is in the TTIP negotiations.
	Mr. YOUNG. Mr. Leo, do you have anything to add to those
	remarks?
	Mr. LEO. Yeah. Congressman, I don't have a whole lot to add
	beyond what Witney mentioned.
	One of my colleagues at the Center for Global Development,
	Kimberly Elliott, has spent a lot of time looking at exactly
	these sets of issues. And, if you are amenable, I am sure she
	would be very pleased to follow up with you with additional
	thoughts as well.
	Mr. YOUNG. Okay. Well, I thank you all for being here, and
	I yield back.
	Chairman NUNES. I want to thank the gentleman from Indiana
	and for his active participation in the African continent
	issues. We look forward to having a good week next week and
	hearing back from you. Thank you, Mr. Young.
	With that, I would like to thank all the witnesses for
	their testimony and for the responses to our questions. I think
	you have given us all much to think about. Our record will be
	open until August 30th, and I urge interested parties to submit
	statements to inform the Committee's consideration of the
	issues discussed today.
	This hearing is now adjourned.
	[Whereupon, at 3:14 p.m., the Subcommittee was adjourned.]
	[Submissions for the record follow:]

	Africa Coalition for Trade, Statement

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



	Africa Cotten & Textiles Industries Federation, Statement

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]







	American Sugar Alliance, Statement

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]









	Brown Shoe 072914TR, Letter

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




	<F-dash>

	Footwear Distributors and Retailers of America, Letter
	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]







	National Pork Producers Council, Statement
	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]








	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





	CBI Sugar Group, Statement

	[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

	<all>
	</pre></body></html>