PRESIDENT’S PARTNERSHIP FOR ECONOMIC GROWTH AND OPPORTUNITY AND AFRICAN GROWTH AND OPPORTUNITY ACT

President Clinton called for expeditious passage of the African Growth and Opportunity Act (Act) during the State of the Union Address. The Act complements the President’s Partnership for Economic Growth and Opportunity in Africa. The goals of the Partnership and Act are to help African countries reform their economies, spur economic growth, move away from dependence on foreign assistance, and establish new business ties with U.S. companies.

All 42 African countries eligible for the U.S. Generalized System of Preference Program (GSP) can participate in the Partnership’s basic program (Level 1). (Eritrea is in the GSP application process; Nigeria, Gabon, Sudan, Mauritania and Liberia are not yet GSP eligible.) Enhanced programs (Level 2) provide additional economic incentives to countries that have outstanding economic reform records.

Level 1 programs include: a) renewal of the GSP law which provides greater market access to Least Developed Countries including 29 African countries; b) establishment of two large investment funds ($150 million and $500 million) that are guaranteed by the Overseas Private Investment Corporation; c) greater attention to African trade and investment issues through appointment of an Assistant United States Trade Representative for Africa and a senior advisor for African programs at the Export Import Bank; and d) USAID programs to strengthen U.S. and African business organizations and assist regional economic integration in Southern Africa.

Level 2 programs include: a) annual Cabinet-level Economic Cooperation Forums; b) future extinction of concessional bilateral debt for the poorest Level 2 countries; c) USAID programs for technical assistance, economic policy reform, and agricultural market liberalization; and d) duty-free, quota-free entry under the GSP program of textile and other sensitive products currently excluded from the program.

Under the Act and Partnership, Free Trade Agreements (FTA) may be considered for countries with open market economies.