Africa: US Trade Report, 2
Date Distributed (ymd): 970301
Document reposted by APIC
The second annual report of the United States Trade
Representative on Africa trade and development policy was=20
released on February 20. The full text is available on the
Web at: http://www.ustr.gov/reports/africa/1997/index.html
This posting contains the report's summary of new
administration initiatives. The previous posting contains the
executive summary of the report. =20
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A COMPREHENSIVE TRADE AND DEVELOPMENT POLICY FOR THE COUNTRIES
OF AFRICA: Appendix A, Summary of New Initiatives=20
Economic Reform=20
---------------
* A debt-reduction initiative started after the 1995 G-7
Halifax Summit encouraged the IMF and World Bank to consider
measures to assist heavily indebted poor countries (HIPCs),
with the objective of reducing their debt burdens to
sustainable levels. The HIPC Debt Initiative will be funded by
an initial $500 million contribution from World Bank net
income, an initial transfer by the IMF of Enhanced Structural
Adjustment Facility reserves for individual country cases, and
additional debt relief of up to 80 percent from the Paris
Club. Other multilateral creditors, including the
Inter-American Development Bank and the AfDB and AfDF, are in
the process of determining their contributions to this
program. In order to be eligible for additional relief,
countries must demonstrate a sustained track record of sound
economic policy implementation. The Department of the Treasury
will continue to provide strong backing so the World
Bank/IMF/Paris Club HIPC program can proceed rapidly.=20
* At the 1996 G-7 summit in Lyon, the heads of state requested
that major international economic institutions (UN, IMF, World
Bank, World Trade Organization) devote special attention to
Africa. In response, the four institutions pledged to give top
priority to economic reform and poverty reduction programs
essential to economic growth in Africa. The Administration
(Treasury, State, NEC, USAID) will be working with these
international institutions to develop more specific proposals
in time for consideration at the next G-7 Summit in Denver in
July, 1997.=20
* In the past two and one-half years, the African Development
Bank/African Development Fund (AfDB/AfDF) have gone through
some of the most extensive reforms of any of the multilateral
banks. While this process was underway, donor countries
withheld concessional funding for the AfDF and postponed
consideration of a capital increase for the AfDB. Now that
these reforms are substantially complete, in fiscal year 1997
the United States will undertake two major initiatives with
respect to the Bank. First, while seeking to meet its
obligations to the Bank, the Administration will urge AfDB to
intensify its cooperation with the IMF and World Bank on
policy-based lending. Over the next year, AfDB is expected to
participate with the World Bank in at least two policy-based
loans. Second, the Administration will press to make the
voting influence of the Bank's non-African shareholders in its
decision making more commensurate with their financial
contribution.=20
* In 1997, USAID will implement a new $2.5 million bilateral
agreement with the South African Ministry of Public
Enterprises to assist the ministry in the restructuring state
assets and the possible privatization of public enterprises.=20
Trade Liberalization and Promotion=20
----------------------------------
* In order to ensure higher level attention and coordination
of our trade policies toward Africa with overall trade policy
goals, the Deputy USTR has in the past year assumed
responsibility for senior level direction of U.S. trade
relations with Africa. In addition, USTR is considering
creation of a new position within its current resources for an
Assistant USTR, whose responsibilities will be dealing with
trade policy questions related to Africa.=20
* The Administration is reviewing the funding possibilities
for a multi-year reauthorization for the GSP program. The
program must be administered in a stable and predictable
manner if it is to provide an incentive to development. In
1997, additional products imported from least developed
beneficiary developing countries, mainly in Africa, will be
selected for GSP eligibility. These determinations are being
made on an accelerated basis and will implement the authority
granted to the President in the amended GSP statute that
became effective October 1, 1996.=20
* At the WTO and World Intellectual Property Organization
(WIPO), USTR will urge that African countries be provided
technical assistance and training in WTO and WIPO procedures
and agreements. USIA will provide support to a sub-regional
conference on Intellectual Property Rights (IPR) that will be
held in Benin and will consider supporting additional IPR
conferences that have been scheduled for Africa.=20
* USTR will send a delegation to key African countries to
explain the requirements of the U.S. textile and apparel
import regime.=20
* The Commerce Department will work with the private sector to
post a Home Page for African Opportunities on the Internet
that will include information on trade and investment
opportunities, trade programs, equity funds, and banks
available for trade and project finance.=20
* The State and Commerce Departments will work with the
private sector to organize a tour throughout the United States
by U.S. Ambassadors to African countries to brief and consult
with U.S. companies in order to stimulate interest in doing
business in Africa.=20
* In order to encourage active participation by African
countries in the WTO, comprehensive briefings for African
Ambassadors on the WTO and other trade and development issues
by the State Department and the office of the U.S. Trade
Representative (USTR) will be provided during 1997.=20
* Commerce will initiate a commercial dialogue with the SADC
countries with the following goals: a) continued progress
toward market-based economic reform in Africa; b) promotion of
regional development cooperation; and c) closer commercial
relations with the United States. The dialogue will involve
the public and private sectors of each side to strengthen
public-private cooperation. The experience with SADC could
serve as a model for other sub-regions in the future.=20
* While the Interagency Credit Risk Assessment System (ICRAS)
process is classified, private sector representatives and
other entities will be invited to provide information and
perspectives to the Commerce Department on African economies
which might be useful to ICRAS participants in determining
credit ratings.=20
* Eximbank has named a Senior Vice President as liaison to the
Eximbank Working Group of the Corporate Council on Africa and
plans to continue its dialogue with that organization with a
view to providing maximum support to U.S. exporters interested
in African markets.=20
* This fiscal year, Eximbank will send a mission to Africa led
by an Eximbank Director.=20
* Commerce and USAID will co-sponsor a Trade Protocol Forum
for the visiting SADC delegation, to assist the SADC countries
in implementing the trade protocol they signed in August 1996.
The forum will discus issues in trade and economic
integration, costs and benefits for the SADC members, and
implications for the government and private sectors of SADC
and the United States.=20
* Commerce devoted the January 1997 issue of Business America
to Africa, including articles on the region's commercial
opportunities and information on U.S. Government programs to
help firms in African markets.=20
* U.S. embassies in Africa will be instructed to expand
commentary in their annual Country Commercial Guide to catalog
market access barriers to U.S. products. Such a catalog of
trade barriers would include those that are WTO incompatible,
but also those in which WTO acceptable tariffs are so high as
to discourage American exports (e.g., extremely high tariffs
on large vehicle engines.)=20
* Commerce and OPIC will host roundtables on commercial
development in Africa to explore with appropriate private
sector organizations ways to structure and support a
commercial development mission to Africa by U.S. banks and
other financial institutions. The objective of such
roundtables and prospective mission would be to better
acquaint U.S. private sector financial institutions with
African commercial opportunities, with the hope they might
expand their operations in the region.=20
* TDA will fund reverse trade missions involving high-level
Africans in the health industry and solid waste industry. By
doing this, American firms will learn of new market entry
opportunities and the Africans will become more aware of U.S.
technologies and specific firms capabilities.=20
Investment Liberalization=20
-------------------------
* Five OPIC funds are available to invest equity in projects
in Africa. In addition to the Allied Capital Small Business
Fund and OPIC's first environmental fund, the Global
Environment Emerging Markets Fund I, three other OPIC funds
can and do make investments in Africa. These funds are the
$120 million New Africa Opportunities Fund, the
recently-approved Aqua International Partners Fund, which is
a $300 million fund that will focus on private water-related
projects, and OPIC's second environmental fund, the Global
Environment Emerging Markets Fund II (GEMF II). This GEMF II
fund has already made an investment in a water purification
project in South Africa.=20
* In September 1996, the IFC approved a new $40 million
program (the "Reach Initiative") to extend its work to
developing countries in which there has been little interest
on the part of world capital markets and where IFC itself has
not been active. The Administration strongly supports this
program. The program will focus on enterprises/projects that
are smaller than those typical subjects of IFC programming.
The fourteen targeted African countries include, Eritrea,
Ethiopia, Congo, Senegal, and Mozambique.=20
* OPIC will seek to expand its current client base for
on-lending facilities. These facilities can provide needed
access to capital for investment in Sub-Saharan Africa.=20
* In Angola, USAID will be providing assistance in reviewing
that nation's investment codes in an effort to make it
attractive for domestic and overseas investors; follow-up
activities will include assisting the Angolans to establish a
"one stop investment shopping center." In Uganda and Tanzania,
USAID will conduct feasibility studies and help prepare
business plans for the establishment of sustainable
microenterprise credit and savings institutions to be operated
by Pride Africa, a U.S. registered non-government organization
based in Nairobi. USAID's activities to support capital market
development will culminate with the launching of an interim
stock trading facility in Uganda early next year. Future
technical assistance in this area will involve: (a) training
new regulators; and (b) establishing private pension funds to
assist with the mobilization of capital for domestic
investments.=20
Private Sector Development=20
--------------------------
* Treasury will urge the AfDF to expand its lending to, and
collaboration with, the African private sector, specifically
by instituting co-financing of infrastructure projects and
beginning a program of lending to micro-enterprises. The
President of AfDF has said that his objective is to increase
Bank lending to the private sector to 25 percent of its total
lending (from negligible levels prior to 1996).=20
* Eximbank will identify markets in which it currently is not
open for routine transactions, but which have improving
economic conditions and a positive environment for private
sector development, in an effort to expand U.S. exports to the
private sector, including newly privatized firms, through
creative financing.=20
* USIA will support, through its private sector program, U.S.
internships for African entrepreneurs arranged by the
Corporate Council on Africa.=20
* The Administration will work through established
government/private sector cooperative bodies to explore
methods of maximizing the utility of Embassy unclassified
reporting and making it more readily available to American
businesses.=20
* Through its Agricultural Research Service, USDA is
collaborating directly with South African agricultural
research institutions as a model system for effecting a
transformation to viable farming there and will seek to apply
the results in other southern African countries. The research
emphasizes the use of indigenous species of plants and animals
to produce higher yields, environmentally safer treatment to
increase shelf life of fruit exports, and increase
opportunities for rural craft industries producing meat and
meat by-products.=20
* The U.S. Department of Labor will continue to support the
Administration's goal of improving essential government
institutions by providing technical assistance to interested
African countries contingent upon USAID funding. Specifically,
the Department of Labor will work to help improve the ability
of Labor Ministries to enhance labor market information
capabilities, strengthen labor standards and training, and
enforce laws.=20
* USAID will undertake in 1997 a number of new initiatives to
promote the development of the private sector in Sub-Saharan
Africa. For example, in South Africa, USAID's Equity Access
Systems will sponsor a $7.5 million technical assistance
program to improve access to equity and long term debt by
African entrepreneurs; assistance will be provided to small
and medium enterprises to bring them to the "bankable" stage
by making them attractive for venture capital investment
and/or loan financing. Also, USAID has developed new analytic
tools to assist Sub-Saharan countries to assess and improve
the competitiveness of their private sectors. Use of such
tools will begin in Uganda and Tanzania to help such countries
identify and promote new investment opportunities.=20
* The Administration will encourage the World Bank Group to
increase outreach efforts to ensure that African
entrepreneurs, including consultants, are better able to bid
for World Bank contracts.=20
Infrastructure Enhancement=20
--------------------------
* The Administration will establish an interagency group on
private infrastructure promotion and finance for Africa which
would help focus and refine proposals for support of
privatization and new private infrastructure projects.=20
* To encourage and promote the regionalization of
telecommunications underway by OAU members, and to build on
existing cooperation with the International Telecommunications
Union, the Federal Communications Commission (FCC) and the
Department of State will assist with institutional
strengthening of regional organizations such as the Pan
African Telecommunications Union, the Regional African
Satellite Organization, and the African Regional Advanced
Level Telecommunications Institute.=20
* The Energy Department will develop a framework for a
sustainable U.S. energy policy vis-a-vis Africa through an
examination of the current status of African energy demand and
supply, energy needs and capacity of the African continent,
the role of U.S. energy technology in fostering a sustainable
energy future in Africa, and innovative project financing
methods.=20
* A number of cooperative efforts to encourage development of
an environmentally sound infrastructure in Sub-Saharan Africa
will be undertaken in 1997. One approach will provide funding
for cooperation in adapting U.S. technology to meet South
Africa's critical environmental needs. A second approach will
offer training for the trainers on environmental management
and enforcement in South Africa and additional training on
priority environmental topics to be funded on a private
sector/government cost-sharing basis. The third involves
issuing small grants (up to $20,000) to assist community
groups in developing environmental capacity.=20
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This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC), the educational
affiliate of the Washington Office on Africa. 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. =20
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