USAfricaonlineVIEWPOINT

Senate Bill S.666 vs. HOPE forAfrica:
Bad news or Good news for Africa?

by ERIC BROWNSTEIN

Special to USAfrica The Newspaper, Houston


The African Growth and Opportunity Act, also known as the NAFTA for Africa Act, has recently passed through the House of Representatives. It is now in the Senate as bill number S.666. In response to this unwelcome continuation of destructive trade agreements, the Human rights, Opportunity, Partnership and Empowerment for Africa Act ("HOPE for Africa Act") was conceived and drafted by African and U.S. civil society groups, economists, trade specialists and legislators to address the real needs and concerns of African nations. It includes mutually beneficial U.S.-Africa trade and investment opportunities - meaning that African businesses and workers, not just US corporations, will enjoy the Act's benefits. It also addresses the priority issue for African development: debt relief.

The broad coalition in support of H.O.P.E. strongly oppose the "African Growth and Opportunity" Act which adopts the NAFTA formula for Africa: giving foreign corporations broad new rights that will increase their capacity to profit from control of African resources, while doing nothing to ensure that benefits actually accrue to African nations and peoples. This NAFTA for Africa legislation also contains harsh eligibility rules that will force African nations to alter their economic policies and laws to suit the needs of foreign speculators and the dictates of the International Monetary Fund - despite the IMF's dismal record in the region. NAFTA for Africa is eagerly supported by the multinational corporate lobby and harshly criticized by African and African-American community, church and development groups. Nelson Mandela called the bill "not acceptable." The choice between the two bills, whose major provisions are contrasted below, will define U.S. economic policy towards Africa for the foreseeable future.

Economic Policy: Self-Determination or Paternalism?

NAFTA for Africa rejects African nations' right to self-determination by coercing them to adopt the one-size-fits-all IMF economic development model which has already had devastating consequences in the region. The HOPE for Africa is based on the recognition that African nations have the right to determine their own approach to economic development.

Trade Benefits for Africa

NAFTA for Africa's meager trade "benefits" (the only benefits for Africa in the entire bill) are either short-lived, illusory or redundant. For example, African countries are granted "least developed country" benefits of an existing trade program for developing countries called Generalized System of Preferences. It turns out that all but a handful of African countries already have been designated as qualifying for this treatment. By contrast, HOPE for Africa offers broad market access for African goods such as those listed under the Lome Treaty in which the U.S. is not a competing producer.

In addition, the Generalized System of Preferences program for sub-Saharan African countries will be extended until 2002

Benefits for African Businesses, Communities and Workers

NAFTA for Africa contains no conditions that African citizens or businesses benefit from the market access provisions whereas the HOPE for Africa aims to raise living standards and foster capital accumulation in Africa. It requires 51% African equity participation in companies whose goods would receive preferential treatment. In order to obtain the duty-free, quota-free market access guaranteed by the bill, goods must be 60% African value-added and finally, companies benefiting from the trade preferences must employ 80% African workers.

Debt Relief

NAFTA for Africa provides no debt relief whatsoever - despite the fact that Africa's crushing $230 billion debt burden is a massive obstacle to economic and social progress. The HOPE for Africa provides for comprehensive debt cancellation.

Sustainable Development Assistance

NAFTA for Africa fails to even restore the budget line item for Africa aid eliminated in 1996 while the HOPE for Africa restores aid to Africa and ensures it is used for Africa's benefit; this includes $650 million in OPIC funds for projects in sub-Sahara Africa and requires that assistance under these various programs be dispensed in consultation with African civil society and directed to such vital areas as education, health services, infrastructure and micro-credit. Also, any funds for business development must benefit companies with at least 60% African ownership.

The AIDS Crisis

NAFTA for Africa ignores the AIDS Crisis while the HOPE for Africa: replenishes and targets assistance from the Development Fund for Africa for AIDS education and treatment programs; makes it U.S. policy to assist sub-Saharan African countries in efforts to make needed pharmaceuticals and medical technologies widely available; and prohibits the use of U.S. funds to undermine African intellectual property and competition policies that are designed to increase the availability of medications.

Labor Rights and Environmental Protection

NAFTA for Africa is silent on these issues while the HOPE for Africa includes strong safeguards to ensure that corporations operating in Africa and accessing the bill's benefits act responsibly with respect to their employees and the local environment.
Brownstein, an executive of the African Rainforest Campaign, The Rainforest Action Network, is based in San Francisco, California. He plans to write on public policy and environmental issues for USAfricaonline.com. His email address is osani@ran.org



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