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A Trade Bill with a Human Face: H.R. 772 The HOPE for Africa Act

President Clinton has been talking about putting a "human face" on the global economy. In his State of the Union address, the President spoke about a new approach to globalization that addresses the needs of working people, that safeguards the environment, that protects consumers. This week Rep. Jesse Jackson Jr. (D-IL) introduced an African trade bill that is the first legislation to put this good idea into action.
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The HOPE (Human Rights, Opportunity, Partnership and Empowerment) for Africa Act, HR 772, contains expansive trade provisions -- indeed the same new access to the U.S. market as is provided in HR 434 the "African Growth and Opportunity Act" and more. However, the HOPE for Africa Act alone also contains the labor, environmental, and human rights standards to ensure that the majority of people in the U.S. and sub-Saharan Africa can enjoy the benefits of trade between the regions.

The "African Growth and Opportunity Act has been dubbed "NAFTA for Africa" by the trade press because it represents the failed status quo trade policy that has lost the support of the American people and was rejected last fall with the House defeat of Fast Track.

In contrast, the HOPE for Africa Act ensures that foreign corporations operating in Africa adhere to labor, human rights and environmental standards and employ African workers (not, for instance, Asian workers who are now being shipped into Mauritius for textile and apparel jobs) in order to benefit from new favorable trade terms. The bill also promotes capital cumulation in Africa through its preferences for investments that include African partners. It includes the same sorts of business facilitation measures as the NAFTA for Africa bill, but targets them towards establishing small and medium-sized businesses in Africa and partnerships between Africans and Americans.

 
HOPE for AFRICA


TEXTILES AND APPAREL


Lifts the quotas now existing for Kenya and Mauritius and locks in quota-free treatment for the other SSA countries when the following is shown:

-LABOR: US Labor Department in cooperation with an SSA country's labor agency and the International Confederation of Free Trade Unions -- Africa Region Office determines a country is "effectively enforcing" international labor rights, such as those set forth in the ILO treaties including rights of association, to organize and bargain collectively, a ban on child, forced or compulary labor, and acceptable work safety conditions, hours and wages.

-HUMAN RIGHTS: No significant violations.

-STRICT TRANS-SHIPMENT RULES: Tough rules supported by the U.S. textile industry and union are included to ensure products enjoying these new benefits were produced in Africa, not trans-shipped from China or other third nations.

-ENVIRONMENT: Contractors, partners or subsidiaries of companies organized in U.S. or other developed countries or operating there must operate African facilities with same environmental safeguards as used in the developed country.

-JOBS FOR AFRICANS: To counter the trend of importing Asian workers for Asian-owned factories in Africa and build African employment, the bill requires 90% of workers to be of one or more SSA countries.

-JOBS FOR AMERICANS: The HOPE for Africa bill sets up a win-win situation. It increases US market access for SSA countries without increasing net import penetration that would cost U.S. textile and apparel workers' jobs. (An industry with 1.4 million U.S. workers mainly women and people of color which is now losing 20,000 manufacturing jobs per month.) It accomplishes this by offsetting increases in imports from SSA countries by cuts in Chinese textile and apparel imports quotas.
   
NAFTA for AFRICA


TEXTILES AND APPAREL


Lifts the quotas now existing for Kenya and Mauritius and locks in quota-free treatment for the other SSA countries when the following is shown:

-LABOR: None

-HARSH IMF-STYLE STRUCTURAL ADJUSTMENTS: An SSA nation must be annually certified by the U.S. President to be adopting neoliberal IMF, WTO policies detrimental to development, but useful to U.S. corporations such as domestic spending and corporate tax cuts, sell-off of natural resources and public assets to foreign investors (land, mines, infrastructure), new MAI-style foreign investor rights, joining WTO and binding to its terms in interim, etc.


-HUMAN RIGHTS: No gross violations.

-WEAK TRANS-SHIPMENT RULES: AGOA's trans-shipment terms are opposed as ineffective by the U.S. industry and unions, and by Members of Congress with expertise. The very industry expected to shift investment under AGOA opposes because of concerns of massive Chinese transshipment under the bill.

-ENVIRONMENT: None

-JOBS FOR AFRICANS: None

-JOB LOSSES FOR AMERICANS: The AGOA is oppose by the American Textile Manufacturers Institute and the union UNITE! because its weak trans-shipment rules and increase in U.S. import penetration in this sector would cost U.S. jobs and damage the U.S. industry

HOPE for AFRICA


GENERALIZED SYSTEM OF PREFERENCES

GSP EXTENDED: Provides extension of GSP for products (including manufactured products) currently included under GSP for SSA countries meeting above labor, African employment, human rights standards until 2005.

ADDITIONAL GOODS: Adds additional goods to this favorable treatment. Additional market access is provided to any goods in the Lome Treaty list (treaty between Europe and former Africa colonies) not already under GSP list that are non-competitive with U.S. production.
 
NAFTA for AFRICA


GENERALIZED SYSTEM OF PREFERENCES

GSP EXTENDED:
Provides extension of GSP for products (including manufactures products) currently included under GSP) for SSA countries meeting the IMF-style structural adjustment and trade conditions until 2009.

ADDITIONAL GOODS:
Provides Least Developed Country GSP benefits to the 5 of 42 SSA countries not already obtaining such treatment. This allows the most developed SSA countries, such as South Africa, duty-free imports of steel, semi-conductors and other import sensitive goods.


 
HOPE for AFRICA


BUSINESS FACILITATION

-OPIC: is instructed to set up a $500 million infrastructure fund for SSA projects.

-AIMED AT: Public needs such as basic health services (including AIDS treatment and prevention and hospitals), potable water, sanitation, schools, electrification of rural areas, and publicly assessable transportation.

-70% OF FUNDING FOR PROJECTS UNDER $1 MILLION WITH 60% AFRICAN-40% US OWNERSHIP: So as to facilitate small business partnerships between US and SSA entrepreneurs

-NEW ADVISORY COMMITTEE: With labor, human rights, development and environmental participants required.

-OPEN MEETINGS AND ADVANCE NOTICE: So that public input is possible in decisions about project funding.

-ENVIRONMENTAL IMPACT STATEMENTS: Prior to decisions on projects.
   
NAFTA for AFRICA


BUSINESS FACILITATION

-OPIC: is instructed to set up a $500 million infrastructure fund for SSA projects.

-AIMED AT: Women entrepreneurs, and innovative investments that expand opportunities for women and maximize employment opportunities for poor individuals.

-NO REQUIREMENTS: Critics of OPIC cite its frequent grant of loan guarantees to huge U.S.-based multinational corporations.

-NEW ADVISORY COMMITTEE: But without any specifications of membership.

-EXISTING CLOSED OPIC PROCEDURES APPLY

-NO NEW EIS REQUIRED
The HOPE for Africa Act provides terms for mutually beneficial trade by taking a holistic approach to interlocking trade, investment, business facilitation, debt relief and aid elements that are vital to any successful economic relationship between sub-Saharan Africa and the United States. Indeed, the bill is based on the principles of the Lagos Plan on economic development created by the African finance ministers and the Organization of African Unity – unlike NAFTA for Africa, it embodies the priorities African nations themselves have identified.

Thus, in addition to its extensive trade provisions, it includes the purchase, at the significantly discounted market rate, and cancellation of African debt which has a face value of $230 billion and annual debt service that devours over 20% of all African export earning. Cancellation of this debt would provide a clean slate -- and working domestic credit markets and resources for education, infrastructure and health -- for African countries facing the challenges of the global economy. The HOPE for Africa Act targets U.S. foreign aid towards uses with broad public benefits -- such as the prevention and treatment of AIDs epidemic ravaging Africa. (The NAFTA for Africa bill does not mention AIDs, much less deal with the issue.)

The HOPE for Africa Act represents the new approach – one that places the needs of people ahead of narrow corporate interests and the dictates of economic dogma. It is the human face for the global economy the president says he seeks.

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