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Note: This document is from the archive of the Africa Policy E-Journal, published
by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action
from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived
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Africa: US Trade Policy (excerpts)
Any links to other sites in this file from 1996 are not clickable,
given the difficulty in maintaining up-to-date links in old files.
However, we hope they may still provide leads for your research.
Africa: US Trade Policy (excerpts)
Date Distributed (ymd): 960224
The U.S. Congress, in approving the Uruguay Round Trade
Agreements in 1994, included a provision that the President
should develop and implement a comprehensive trade and
development policy for Africa, and present annual reports on
its progress over a four-year period. The first report,
excerpted below, was presented on February 1. Initial
reaction from Congress and from non-governmental organiations
has been that the report falls far short of the stated
objectives, pointing out that it is mainly a compilation of
existing programs, includes an uncritical endorsement of
questionable structural adjustment programs, and fails to
address the critical issue of Africa's debt.
A bipartisan congressional caucus on Africa Trade and
Investment is being formed, which will prepare its own
response to the administration's policy over the next few
months. The caucus welcomes input from a wide variety of
sources on the strengths and weaknesses of the administration
policy, as well as new suggestions relevant to presenting a
more adequate alternative. Comments should be sent to Charles
Williams, Chief of Staff, Office of Rep. Jim McDermott, 2349
Rayburn Building, Washington, DC 20515. Phone 202-225-3106;
fax: 202-225-6197; e-mail: not yet available.
The text below includes sections 1 and 2 of the document prepared
by the United States Trade Representative's office in the White House,
as well as the table of contents for the remaining sections.
Correction: In the Trade Background Paper distributed by APIC
in December, it was erroneously noted that the Generalized
System of Preferences (GSP) was renewed for five years. In
fact the renewal term was changed to only one year when the
legislation was incorporated into another bill, which was
vetoed by President Clinton. GSP renewal will accordingly be
on the congressional agenda this year as well.
A COMPREHENSIVE TRADE AND DEVELOPMENT POLICY
FOR THE COUNTRIES OF AFRICA
A Report Submitted by the President of the United States to
the Congress
I. EXECUTIVE SUMMARY
This report presents a comprehensive policy framework through
which the United States will pursue its trade and development
strategy with the 48 countries of Sub-Saharan Africa.
Increased economic growth in Africa would not only stabilize
the region financially and politically, but also create
greater opportunities for U.S. businesses and investors and
more jobs for Americans.
To seize the opportunity for partnership aimed both at
supporting African objectives and pursuing U.S. interests,
this policy establishes a framework for supporting and
facilitating African efforts to create an enabling environment
for the promotion of trade, investment, and sustainable
development. To address effectively the wide spectrum of
challenges that confronts African development, the policy
framework outlined in this report is structured around five
basic objectives: trade liberalization and promotion;
investment liberalization and promotion; development of the
private sector; infrastructure enhancement; and economic and
regulatory reform. This report offers a summary of these
objectives and the initiatives being pursued in each area.
This Administration is also opening a wider dialogue with
interested parties in Africa and the United States for the
purpose of sharpening the focus of the U.S. role in the years
to come. Developing a coherent strategy for promoting trade
and development in Sub-Saharan Africa requires a coordinated
effort among the Administration, the Congress and the private
sector.
The United States recognizes the difficulties African
countries have faced in their efforts to develop both human
and economic capital. Problems such as overwhelming debt
burdens, flawed economic policy choices, poverty and
widespread unemployment, weak private sectors stifled by
dominating parastatals, environmental degradation and an
absence of democratic political institutions have combined in
the past to hamper Africa's aspirations for growth and
development. However, change has begun to sweep the African
continent as countries are increasingly abandoning the
discredited statist policies of the last three decades and
committing to policy changes based upon democratic political
principles and market-based economic reforms. This growing
commitment to democracy and structural adjustment inspires
optimism about the future of Africa and provides new
opportunities for the United States both to support African
efforts and to pursue American economic and security
interests.
Indeed, African countries have begun to recognize the critical
importance of creating a policy environment conducive to
investment and growth. A recent World Bank report documents
a direct correlation between those countries that have
embarked on major policy reforms and those that have
experienced the greatest economic growth. In addition, the
report shows that bilateral and multilateral assistance have
been instrumental in supporting a stable policy environment.
This allows reforms the time necessary to take hold and has
helped catalyze private investment, which will be the engine
of future growth.
The challenge is to promote increased growth, often drawing
upon the continent's fragile but rich resource base, in a
manner which is sustainable and promotes individual initiative
and private investment. Many countries are making significant
progress in implementing policies which promote the
husbanding of the resource base, however, environmental
concerns still threaten many short term growth options.
Between 1990 and 1994, the United States provided $13.6
billion in all forms of bilateral and multilateral assistance
to Africa. These funds promoted trade and development,
helped develop the private sector, enhanced infrastructure,
supported economic and regulatory reform, encouraged
democracy, provided technical assistance and food aid, and
helped stem environmental degradation.
In addition, multilateral institutions have also played a
major role in assisting development in Sub-Saharan Africa:
between 1993 and 1995, the World Bank Group provided over $3.7
billion for structural adjustment, private sector development
and civil service reform in Africa; the International Monetary
Fund had total credit outstanding to Africa of about $9
billion as of June 1995 to promote viable financial and
balance of payments positions; and the African Development
Bank committed over $13.6 billion to Africa (including North
Africa) between 1990 and 1994 to support policy reform and
economic development.
However, resources available to the United States Government,
multilateral institutions and others providing official
development assistance to Africa are in decline. This
requires U.S. policy to focus on appropriate allocation of
available funds and on successfully attracting more private
sector participation and investment. U.S. policy will also
seek to increase cooperation among donor nations and
multilateral institutions.
This report outlines a comprehensive trade and development
policy for the countries of Sub-Saharan Africa aimed at
accelerating economic growth. It first notes the policy
challenges and the reforms necessary for economic development
and social stability. It then offers a brief summary of the
critical policy choices the countries of Africa have made.
After reviewing both bilateral and multilateral policies and
programs currently in operation, this report defines
objectives and new initiatives for increasing trade and
development in Africa.
II. POLICY STATEMENT
The primary objective of the Administration's Comprehensive
Trade and Development Policy is to work with the people and
leaders of Africa in the pursuit of increased trade and
investment, and sustainable economic development.
Achievement of these objectives would, in turn, enable the
countries of Africa to become more fully integrated into the
global economy and share in the prosperity enjoyed by
participating countries.
The thrust of this policy is captured in the following passage
from the Communique from the June 1995 G-7 Halifax Summit
which appeared under the heading of Promoting Sustainable
Development:
A higher quality of life for all people is the goal of
sustainable development. Democracy, human rights,
transparent and accountable governance, investment in
people and environmental protection are the foundations
of sustainable development. The primary responsibility
rests with each country but bilateral and multilateral
international cooperation is essential to reinforce
national efforts. We are committed to securing
substantial flows of funds and to improving the quality
of our assistance.
As this statement makes clear, the responsibility rests with
African countries to commit themselves to these objectives and
to make the policy choices that will enable them to achieve
these objectives. Help from outside Africa cannot overcome
lack of commitment or wrong choices by the governments or
people of Africa. However, if the commitment is there and the
right choices are made, external assistance can make a
valuable difference. The commitment and right choices now
being made by a number of African countries give us ample
reason to re-energize our efforts and to join with those
countries in a partnership to pursue our mutual interests in
democracy, political stability and economic growth.
These historic policy changes offer a critical opportunity to
the United States. By supporting African countries in the
pursuit of their development objectives, many of our own
interests -- from the promotion of American trade to
international security concerns -- can be advanced
simultaneously. Economic development in Africa will mean
expanded trade with the United States, resulting in economic
growth and new jobs for Americans as well as for Africans.
The continued development of democratic institutions in Africa
will not only stabilize the environment for this economic
growth but will also help counter forces that threaten U.S.
security, such as terrorism, refugee flows, narcotics
trafficking, humanitarian crises, and environmental
degradation.
Strengthening the synergies between trade and development is
a major objective in U.S. policy toward Africa. The
successful experiences of East and Southeast Asia demonstrate
that rapid expansion of trade leads to rapid economic growth
and employment. The resulting increase in incomes, in turn,
leads to greater foreign and domestic investment and increased
demand for foreign goods and services. Foreign development
assistance is replaced by increased trade and foreign and
domestic private investment. Development then becomes
self-sustaining.
Creating a more hospitable environment for private investment
is critical to the success of Africa's development. We are in
an era of declining official development assistance, both
bilateral and multilateral. Future official aid programs will
not be large enough to provide all, or even the majority, of
the financing needed for Africa's development. Instead, they
increasingly will serve to prepare the policy and management
context for, and to catalyze, inflows of private capital. The
emphasis, whether in aid councils or business development
activities, must be on supporting those countries that show a
willingness and ability to implement reform.
Given the current fiscal constraints faced by the United
States, the Administration will not request any additional
funding at this time. Funding for these activities will come
from within current budgets. Moreover, since the budgets of
the agencies participating in this policy are expected to
decline in the short-term, it is probable that current levels
of activities may even decline.
The United States will focus its support on those countries in
Africa that are pursuing meaningful structural adjustment and
economic reform because they have the greatest chance of
success. Specifically, the United States will:
* join in multilateral efforts to assist those African
countries undertaking meaningful economic and regulatory
reform, including debt reduction where warranted;
* support efforts to improve essential government and
non-government institutions.
* support efforts to improve physical infrastructure needed in
a modern market economy;
* create a more growth-oriented business climate that will
attract foreign as well as domestic investment and generate
expanded trade in which U.S. firms can participate as
effective commercial partners;
* remove barriers to trade in Africa and increase African
participation in the world trading system, including the WTO,
in the U.S. GSP program, and strengthen intellectual property
protection;
* expand advocacy and support programs for U.S. exporters and
investors in Africa; and
* promote greater regional integration within Africa.
Table of Contents of Remaining Sections
[Full text available on the Web at the URL's indicated for
each section. For information on how to retrieve Web
documents by e-mail send a message "help" to
[email protected].]
III. Background
IV. Challenges Facing Sub-Saharan Africa
V. African Initiatives
VI. Overview of Trade and Development Programs Currently in
Operation
A. United States Government Trade and Development Programs for
Sub-Saharan Africa
B. Multilateral Programs for Sub-Saharan Africa
1. World Bank Group
2. International Monetary Fund
3. African Development Bank
4. World Trade Organization
5. United Nations
VII. A Comprehensive Trade and Development Policy Framework
A. Trade Liberalization and Promotion
B. Investment Liberalization and Promotion
C. Development of the Private Sector
D. Infrastructure Enhancement
E. Economic and Regulatory Reform
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This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC's primary
objective is to widen the policy debate in the United States
around African issues and the U.S. role in Africa, by
concentrating on providing accessible policy-relevant
information and analysis usable by a wide range of groups and
individuals. APIC is affiliated with the Washington Office on
Africa (WOA), a not-for-profit church, trade union and civil
rights group supported organization that works with Congress
on Africa-related legislation.
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