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H.O.P.E. for Africa Act S. 1636: LEGISLATIVE OUTLINE

The Human Rights, Opportunity, Partnership and Empowerment for Africa Act (HOPE for Africa Act) provides a holistic approach to a new, mutually beneficial U.S.-sub-Saharan African trade and investment policy.

The legislation includes trade, investment, business facilitation, debt cancellation and aid provisions, as well as labor, human rights and environmental standards.

In addition to findings concerning the economic circumstances and challenges facing Sub-Sahara Africa and a statement of a new U.S. policy toward the region, the bill:

  • provides new preferential access to U.S. markets for a broad range of goods and ensures that these goods are made in Sub-Sahara Africa by African workers and are produced in a manner consistent with internationally recognized labor and human rights and respecting basic environmental standards;
  • commits the U.S. to sharply reducing sub-Sahara Africa's crushing external debt burden ­ a major obstacle to the realization of the region's economic potential;
  • provides business facilitation measures to promote U.S.-African business partnerships, with emphasis on small businesses and the capital accumulation in Africa necessary to build thriving economies there;
  • ensures that development assistance for Africa is strategically targeted to sustainable economic development and to pressing needs, such as food security, enhancing educational opportunities for women and battling the scourge of AIDS; and
  • provides additional measures for prevention and treatment of the HIV/AIDS epidemic now undermining Africa's human and economic potential.

I. Findings (Section 3)

Congress finds that the countries of Sub-Sahara Africa have made notable progress toward democratization in recent years, and that it is in the mutual interest of the U.S. and Sub-Sahara Africa to promote equitable trade and investment policies between the U.S. and Sub-Sahara Africa. However, there are obstacles to trade, investment and growth in Sub-Sahara Africa that must be addressed. These include deep and widespread poverty exacerbated by the massive $230,000,000 debt burden that soaks up much of the region's export earnings. The HOPE for Africa Act cites the need for a new approach, marrying trade and investment with debt cancellation, business facilitation, targeted assistance for sustainable development, promotion of human rights, labor rights and environmental protection and a clear commitment to the principle that each African nation must be free to determine for itself what development course to pursue.

II. Statement of Policy (Section 4)

The HOPE for Africa Act establishes a new U.S. policy toward Sub-Sahara Africa, based on the recognition that economic development must be measured by the well-being of the majority of people. The Act bases the new U.S. policy on the principles of the Lagos Plan created by African Finance Ministers in cooperation with the Organization for African Unity, which is oriented toward the following goals:

  • Strengthening and diversifying Sub-Sahara Africa's economic production capacity
  • Improving the level of peoples' incomes and the pattern of distribution
  • Adjusting the pattern of public expenditures to satisfy the essential needs of the populations of African nations
  • Providing institutional support for transition through debt relief
  • Supporting sustainable development
  • Promoting democracy, human rights and a vital civil society
  • Making safe and efficacious drugs and medical technologies widely available

III. Trade (Title II)

The HOPE for Africa Act grants new access to the U.S. market for a broad range of goods produced in Sub-Sahara Africa, by Africans. It includes safeguards to ensure that the corporations manufacturing these goods respect the rights of their employees and the local environment and that participating countries do not engage in significant human rights violations or refuse to enforce basic, internationally recognized worker rights.

  • The Act lifts existing textile and apparel quotas on Kenya and Mauritius and will extend the existing no-quota treatment granted to other Sub-Sahara Africa countries (section 201(b)). To prevent a net increase in overall U.S. textile and apparel imports, it transfers to African countries the small portion of China's enormous textile and apparel quotas that the African countries can fill each year (section 201(b)(4)). The bill includes strong measures to ensure that imports from Africa are not merely transshipped from other points of origin (section 201(d) and section 201(b)(1)(D)).
  • The Act extends existing benefits enjoyed by African nations under the Generalized System of Preferences (GSP) through 2006, eliminating the need to renew these benefits in each of the intervening years and avoiding the consequent delays (section 202(b)).
  • The Act grants Sub-Saharan African countries new GSP-equivalent quota-free market access for goods listed under the Lome Treaty in which the U.S. is not a competing producer ­ these goods include a variety of minerals, tropical oils, and processed foods, among other products (section 202 (a)(2)). These are new trade benefits not contained in the African Growth and Opportunity Act (H.R. 434).
The Act is designed to ensure that sub-Saharan African businesses and workers benefit from the new grant of quota-free and lower-tariff access to the U.S. market. In order to achieve these ends, the Act requires that:

  • Countries seeking the new trade benefits comply with the core labor standards enumerated in the International Labor Organization (ILO) treaties that most Sub-Saharan African nations have already adopted. Thus, under this provision, they must refrain from the use of child, forced, indentured or slave labor (section 201(b)(1)(C)). Determination of eligibility for trade benefits is made by the U.S. Labor Department with the labor agency of the Sub-Saharan African country and with the International Confederation of Free Trade Unions ­ Africa Region Office (sections 201(b)(1)(C)(ii) and 201(b)(5));
  • Countries do not engage in significant human rights violations (section 201(b)(1)(B));
  • Products benefitting from the Act's new market access have at least 60% of their products' value added in one or more Sub-Saharan African countries so as to promote diversification of economic development, including in manufacturing (section 201(b)(1)(F));
  • Products benefitting from the Act's new market access are produced by companies that employ at least 90% Sub-Saharan African workers so as to halt the practice of importing Asian indentured workers into Sub-Sahara Africa (section 201(b)(1)(G));
  • Special tariff cuts are provided for products of corporations that have majority Sub-Saharan African ownership, so as to promote capital accumulation in Sub-Sahara Africa (section 201(c)(1));
  • Additional tariff cuts apply to products of corporations, including in the oil and mineral extraction sectors, that involve a joint-venture arrangement with a firm based in the U.S., the EU or Japan that use in their African facility the same environmental standards that would apply to a similar operation in a developed country, such as in the firm's home country (section 201(c)(2)); and
  • The Act provides for strong enforcement of its provisions through a citizen suit provision granting standing for enforcement actions in U.S. federal district court. Such citizen suits can be for injunctive relief or for damages against a company violating the Act's terms (section 203).

IV. Debt Cancellation (Title I)

The Act provides for comprehensive debt cancellation covering debt owed by Sub-Saharan African countries to the U.S. government and to multilateral institutions such as the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank), so long as such countries do not engage in significant violations of human rights, support international terrorism, have an excessive level of military expenditures or interfere with international drug-control efforts. By eliminating the principle of the debt, the Act would remove the burden of large, never-ending annual interest payments; a single year of which is more than the actual market value of the debt (which is dramatically lower than its face value). The Act also requires the U.S. government to design a plan to acquire at market (not face) value and cancel privately held debt, and proposes interim measures limiting debt service payments made by Sub-Saharan African nations to the U.S. to 5% of their export earnings.

  • Cancellation of Bilateral Debt
    The Act provides for the cancellation of all bilateral debt owed by Sub-Saharan African countries to the U.S. (section 101). As U.S. bilateral debt is a relatively small portion of the overall Sub-Saharan African debt burden, the Act instructs the United States to urge that all other governments holding debt from Sub-Saharan African nations cancel such debt (section 102) and to review the status of payment of debt to the U.S. for those countries who fail to implement bilateral debt forgiveness.
  • Cancellation of IMF and World Bank Debt
    The Act instructs the U.S. representatives to the IMF and the World Bank to advocate for full debt cancellation for Sub-Saharan African countries (section 103).
  • Plan for Cancellation of Debt Owed to Private U.S. Banks
    The overwhelming majority of Sub-Saharan African debt to private lenders based in the U.S. was incurred by the Apartheid regime in South Africa, the Mobutu regime in Zaire and the Abacha regime in Nigeria. The Act instructs the U.S. Treasury to calculate the market value of this debt, which is significantly less than its face value, and to draw up a plan for its acquisition at market value and subsequent cancellation by the U.S. government (section 104).
  • Advocacy to Allocate Debt Savings to Basic Social Services
    The Act requires U.S. representatives to the IMF and World Bank to encourage Sub-Saharan African governments benefitting from debt cancellation to devote at least 20% of their national budgets to basic services (sections 103 and 106).
  • Plan for Limiting Interest Debt Service Payments
    The Act includes a sense of Congress that prior to the cancellation of Sub-Saharan Africa's bilateral debt with the U.S., African countries pay no more to service the debt than was paid by countries participating in the Marshall Plan: an amount not to exceed 5% of their export earnings (section 107). The Act also instructs U.S. representatives to the IMF and World Bank to advocate that the maximum debt service rate of 5% of export earnings apply to any current and future multilateral debt (section 103).

V. Sustainable Development Assistance (Title III)

The Act requires that U.S. development assistance for Sub-Sahara Africa be dispensed strategically with emphasis on the following areas (sections 302-304):

  • Strengthening educational systems, particularly for women
  • Strengthening health care, particularly for HIV/AIDS prevention and treatment
  • Strengthening prenatal care
  • Supporting democratization
  • Enhancing food security and sustainable agriculture
  • Increasing the incomes of poor individuals, through industrial development and the provision of microcredit
  • Protecting the environment and promoting the management of natural resources
  • Building capacity of private and voluntary organizations
  • The Act prohibits the use of any aid funds for military purposes

VI. Business Facilitation: EXIM Bank and OPIC Funds (Titles IV- VI)

The Act provides for the targeted use of $500 million in Overseas Private Investment Corporation (OPIC) infrastructure funds for the following purposes: basic health services (with a special emphasis on HIV/AIDS prevention and treatment infrastructure), potable water, sanitation, schools, rural electrification and accessible transportation (section 401(b)(3)).

Seventy percent of investment insurance provided by OPIC under the Act must be allocated to small business U.S.-Africa partnerships with assets of under $1 million and with at least 60% Sub-Saharan African ownership (section 401(c)(1)). Fifty percent of such funds used for energy projects must be used for renewable and/or alternative energy development (section 401(c)(2)).

New advisory boards are created to oversee both these new OPIC funds (section 501) and Ex-Im Bank financing targeted to sub-Sahara Africa (section 502). Such advisory boards will have private sector membership including individuals with expertise in human rights, labor rights, public interest issues, the environment and development. Meetings will be public.

Environmental impact assessments will be conducted and made public wherever relevant (sections 501 and 502).

To identify export opportunities and other commercial prospects in Sub-Sahara Africa, U.S. Commercial Service staffing in Africa is expanded from its current level of 12 to ensure that at least 20 full-time Commercial Service employees are stationed in no less than 10 Sub-Saharan African countries (section 603).

VII. Access to AIDS Prevention and Treatment, and Other Vital Pharmaceuticals (Title VI)

In addition to the Act's debt relief (Title I) and aid (Title III) provisions that enable Sub-Saharan African governments to strengthen HIV/AIDS education, prevention and treatment programs, the Act also aims to increas the availability of pharmaceuticals in Sub-Saharan African nations. Section 602 prohibits the U.S. government from seeking to challenge or revoke any Sub-Saharan country's intellectual property or competition laws or policies designed to promote access to pharmaceuticals or other medical technologies if they comply with the World Trade Organization's (WTO) Agreement on Trade Related Aspects of Intellectual Property (TRIPS) (section 602).

VIII. Anticorruption Efforts (Title VI)

The Act aims to increase government accountability and transparency in Sub-Sahara Africa by urging Sub-Saharan African countries to accede to the Organization for Economic Cooperation and Development's Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (section 601).

IX. Offset (Title VII)

The Act is paid for by privatizing the costs of research and development on aircraft performance performed by NASA (section 701).

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