Office of Management and Budget Click to print this document

October 22, 1999

H.R. 434 - African Growth and Opportunity Act
(Crane (R) IL and 75 cosponsors)

The Administration strongly supports and urges Senate passage of the managers' amendment to H.R. 434, which includes four important trade initiatives with significant benefits for American consumers, workers, farmers and businesses, as well as workers in developing countries: (1) the African Growth and Opportunity Act; (2) the United States-Caribbean Basin Trade Enhancement Act; (3) the Trade Adjustment Assistance Reauthorization Act; and (4) the Generalized System of Preferences Extension Act.

African Growth and Opportunity Act. In this decade, many countries throughout sub-Saharan Africa have adopted economic and political reforms which offer the continent's people great hope for the future. These nations, including Africa's two economic giants, South Africa and Nigeria, have adopted economic reforms, from liberalizing exchange rates, to privatizing state enterprises, reducing subsidies, and cutting barriers to trade and investment, which in many cases are joined by the adoption of multiparty political systems and free elections.

The African Growth and Opportunity Act recognizes and encourages such progressive policies. By promoting trade and investment and enhancing Africa's access to the American market, it will give Africa's people new opportunities for growth and sustainable development. It will also offer potential new export opportunities for Americans, as reform and increased trade and investment spur growth, and the ability of Africans to buy U.S. goods and services rises. The Act has the support of virtually all African governments, including South Africa, as well as a broad spectrum of business and civil society groups in the United States. It is a constructive response to the changes underway in Africa, and one the Administration strongly supports.

U.S.-Caribbean Basin Initiative Trade Enhancement Act. The Caribbean Basin, in the past decade, has been one of our hemisphere's remarkable success stories. Since the beginning of the 1990s, the nations of Central America have been at peace; their economies have begun to grow; and their governments have made some of the world's most rapid advances in democratization and, human rights, and have given increasing attention to core labor standards. Likewise, the Caribbean island economies have diversified and grown.

The Caribbean Basin Initiative deserves substantial credit for this remarkable progress. For fifteen years, it has been a centerpiece of American policy in the region, with bipartisan support and consistently strong results. Since its creation, American trade with the Caribbean Basin has grown rapidly, to the point where, as a group, the CBI countries are a larger export market for the U.S. than such nations as France, Brazil and China.

CBI enhancement builds on this success, and responds to the need to prepare the Caribbean Basin countries for a Free Trade Area of the Americas (FTAA) and maintain their competitiveness with respect to Mexico. This legislation will have long-term benefits to the U.S. economy by strengthening U.S.-CBI partnerships in the apparel industry and assisting U.S. textile manufacturers. Its passage is especially important, as it will provide opportunities for the Central American and Caribbean countries to rebuild their economies in the wake of Hurricanes Mitch and Georges, reducing pressures which could precipitate migration outflows in the future.

Trade Adjustment Assistance. Reauthorization of the Trade Adjustment Assistance programs for workers and firms through September 30, 2001, would assure that training and income support continue to be available for U.S. workers adversely affected by trade. It will also assure that manufacturing and processing firms adversely affected by imports will continue to obtain technical assistance to help them develop a strategy for regaining economic competitiveness. The authorizations for these programs have expired, leaving uncertainty about the continued availability of critical programs for U.S. workers.

Generalized System of Preferences. Extension of the Generalized System of Preferences program, which offers duty-free treatment for a defined set of developing country products not sensitive to imports, advances U.S. economic interests by decreasing component and other input costs for U.S. importers. At the same time, it contributes to economic growth and political stability in beneficiary countries.

The Administration supports these initiatives and will work during conference to address any substantive and procedural concerns, including working with the Congress to ensure that legislation is appropriately offset. The Administration wants to work with Congress to enact bipartisan trade legislation that moves forward the U.S. trade agenda to open markets and create opportunities for jobs and growth in America and around the world.

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