THE WHITE HOUSE
Office of the Press Secretary
|For Immediate Release
||May 17, 2000
DETAILS OF THE
TRADE AND DEVELOPMENT ACT OF 2000
May 17, 2000
SUMMARY. This bipartisan legislation includes the Africa Growth
and Opportunity Act (AGOA) and the U.S.-Caribbean Basin Trade Partnership Act
(CBTPA), and other important provisions. This package advances U.S. economic
and security interests by strengthening our relationship with regions of the
world that are making significant strides in terms of economic development and
political reform. It will expand two-way trade and create incentives for the
countries of sub-Saharan Africa (SSA) and the Caribbean Basin to continue
reforming their economies and increase their participation in the benefits of
the global economy. And, it will contribute to the continuation of our own
strong economic performance by encouraging the opening of markets and the
reduction of poverty in countries with hundreds of millions of potential
consumers of American exports.
STRENGTHENING OUR PARTNERSHIP WITH AFRICA THROUGH THE AFRICAN
GROWTH AND OPPORTUNITY ACT. This Act promises to deepen our economic
partnership with Africa and expand two-way trade to the benefit of both
partners. It will also encourage SSA countries to undertake economic reforms
and engage in the world economy. As reform spurs growth in Africa, it will
create new and bigger markets for U.S. exports, as the following statistics
- The 48 countries of sub-Saharan Africa constitute a market of more
than 700 million people.
- Our exports to Africa, amounting to more than $6.5 billion in 1998,
are more than 45 percent greater than those to all the countries of the former
Soviet Union combined.
- Although our exports to Africa grew more than eight percent in
1998, our trade with Africa accounts for only 1 percent of our total trade.
- The United States accounted for only 6.1 percent of the African
market -- while Asian exports have captured 28 percent.
AGOA lies in Americas interest because it promotes the types of
reforms in Africa that will make sub-Saharan nations better allies and better
trading partners. It has the support of virtually all African governments,
including that of South Africa. The Acts specific provisions will:
- Establish, as U.S. policy, a framework of incentives to encourage
greater economic growth and self-reliance through enhanced international trade
and investment in Africa.
- Expand the Generalized System of Preferences (GSP) program by
providing duty-free treatment to virtually all products from sub-Saharan
Africa. The GSP program provides preferential tariff treatment for imports of
developing countries that satisfy certain eligibility requirements.
- · Extend duty-free, quota-free benefits to apparel made in
Africa from U.s. yarn and U.S. fabric or from yarns not available in the U.S.
- Grant duty-free, quota-free benefits to apparel made in Africa from
African fabric u to a limit that grows over time. The escalating cap starts at
1.5 percent of U.S. imports of all apparels and rises over eight years to 3.5
percent. Africas current share is only 1.1 percent of the U.S. apparel
- Provide four years of special incentives for apparel industry
investments in least developed countries.
- Protect African workers and U.S. jobs by requiring tough safeguards
against trans-shipment (i.e., shipping an item through a beneficiary country
that was actually manufactured in a third country not eligible for the
bills preferential tariff treatment) and respect for internationally
recognized worker rights and human rights.
- Institutionalize annual high-level discussions to promote trade,
investment and development through creation of a U.S.-Africa Trade and Economic
- Develop a plan to establish a free trade agreement with SSA
- Provide additional technical assistance to help Africans take
maximum advantage of the opportunities available in the expanding global
- Encourage the American private sector to take a more active role in
combating AIDS/HIV in Africa and establish eradication of AIDS as a top
priority of the U.S. government. AGOA is the first trade bill to address the
challenge of AIDS/HIV directly.
- Other provisions of the Act include: creation of an Overseas
Private Investment Corporation (OPIC) Infrastructure Fund to encourage
investment in crucial transportation, power, and other infrastructure projects;
and expansion of trade financing through the U.S. Export-Import Bank.
STRENGTHENING OUR TIES TO THE CARIBBEAN THROUGH THE U.S.-CARIBBEAN
BASIN TRADE PARTNERSHIP ACT. In recent years, the countries of the
Caribbean Basin have formed an increasingly important export market for our
goods, as the following figures illustrate:
- The 23 independent countries of the Caribbean Basin together formed
the sixth largest export market for U.S. goods in 1999.
- Since the enactment of the Caribbean Basin Economic Recovery Act
(CBERA) in 1984, U.S. exports to the region have more than tripled to $19
billion in 1999. The Caribbean Basin countries absorbed 2.7% of total U.S.
exports in 1999.
But Hurricanes Mitch and Georges of 1998 took a terrible toll -- $12
billion in damages, by some estimates -- on the nations of the Caribbean Basin.
Forming a complement to the disaster relief the U.S. has already provided,
CBTPA will help CBI countries get back on their feet and grow over the
long-term. That will help not only U.S. exports; it will create the conditions
in which healthy democracies can thrive. Specifically, CBTPA will:
- Offer temporary trade benefits to Caribbean Basin countries to
facilitate their economic development and reconstruction after 1998s
devastating hurricanes, place them on a more equal competitive basis with
Mexico in the U.S. market, and reinforce the regions trend toward more
openness in the conduct of economic policy.
- Encourage development of trade and investment policies that will
facilitate their ultimate participation in the Free Trade Area of the Americas
- Expand the CBI program to extend preferential tariff treatment to
certain textile and apparel products assembled from U.S. fabric that have been
excluded from the program. This will encourage additional U.S. exports of
cotton and yarn and U.S. investment in the region and strengthen the
international competitive position of the U.S. textile industry.
- Extend preferential tariff treatment to textile handicrafts and all
non-textile products currently excluded from such treatment under the existing
Caribbean Basin Initiative.
- Reduce duty rates for textiles covered by the agreement by up to
100 percent, and such products would be free of quantitative restrictions. For
other products, the tariff rate would be reduced up to 100 percent of the
difference between the current rate and the rate applicable to Mexican goods
under the NAFTA.
- Provide safeguard provisions on covered textile products. Tariff
benefits could be modified under the same conditions as in the NAFTA in the
event of disruptive import surges.
- Conditions countries eligibility for these expanded trade
benefits on fulfillment of WTO obligations pertaining to fair trade,
cooperation in counter-narcotics efforts, and respect for core labor
OTHER PROVISIONS OF THE TRADE AND DEVELOPMENT ACT OF 2000. The
- Improves enforcement of fair trade rules by requiring periodic
changes in foreign products subject to U.S. retaliation when a foreign
government persists in its failure to comply with a WTO decision.
- Expands the list of worker rights criteria countries must meet to
be eligible for trade preference programs like GSP, CBI, and AGOA to include
implementation of the recent International Labor Organization Convention
banning the worst forms of child labor.
- Provides relief from high tariffs on wool fabric that has hurt
competitiveness of the U.S. wool suit manufacturing industry.
- Promotes economic growth and democracy in other developing
countries. The Act determines that the emigration laws and practices of
Albania, Kyrgyzstan, and other countries are in compliance with the
Jackson-Vanik amendment of the 1974 Trade Act, and thus are now eligible for
normal trade relations status with the United States. That means that the U.S.
will grant these countries the same trading rights we grant to other WTO
members when these nations join that organization in the near future. Increased
trade will lead to a better relationship with the U.S. and a surer path to
democracy for these newly independent nations.
BENEFITS OF FREER TRADE. Since the creation of the General
Agreement on Tariffs and Trade in 1948, Democratic and Republican
Administrations, working in partnership with Congress, have concluded eight
negotiating Rounds, signed hundreds of bilateral trade agreements, and opened
markets for American goods. All this has helped to:
- increase global trade 15-fold;
- boost real production in the United States 5-fold; and
- augment real average American per capita income 3-fold.
Since the conclusion of the Uruguay Round in 1994, a more open world
economy has helped American exports rise by over $200 billion (51 percent).
Export expansion accounted for more than one-quarter of U.S. economic growth
between 1992 and 1998. Average real wages have grown 6.3 percent under
President Clinton, with export-related jobs paying 15 percent more on average
than non-export-related jobs.
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