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House Acts on Key McDermott Africa Initiative: Measure Inside H.R. 6560 on Suspension Calendar
Rep. Jim McDermott (D-WA)
July 29, 2008

Rep. Jim McDermott (D-WA) achieved a significant economic victory for African nations last night when the House passed bi-partisan legislation led by Ways and Means Committee Chairman Charles Rangel to make changes to the Dominican Republic-Central America Free Trade Agreement with the United States. 

Inside the chairman’s legislation is Rep. McDermott’s previous stand-alone bill, H.R. 5059, to repeal the Abundant Supply Provision in the African Growth and Opportunity Act, because it has significantly curtailed the manufacture and export of clothing from several African nations officially classified as lesser developed nations, and to add Mauritius to the list.

“We are building on what we have done in the past legislatively through AGOA to assist the lesser developed nations of Africa, but more importantly, we are demonstrating what we stand for as a nation in caring about other countries and the role we intend to play as a world leader to promote economic and social justice,” Rep. McDermott said. 

McDermott added that the repeal of the Abundant Supply Provision was the top priority expressed by African trade ministers during an international conference held two weeks ago in Washington, D.C. 

He noted the bi-partisan nature of the legislation that was passed last night and praised the leadership of Ways and Means Chairman Charles Rangel, Trade Subcommittee Chairman Sander Levin, and Ranking Ways and Means Member Jim McCrery, and Subcommittee Ranking Member Wally Herger.

McDermott was selected to manage passage of the legislation in the House and he gave the following remarks about the legislation, his colleagues and the excellent work done behind the scenes by staff for the various Members on both sides of the aisle.

Remarks made on Tuesday evening, July 29, 2008
Floor Manager for H.R. 6560

Mr. Speaker,

Beginning a generation ago under the leadership of President John F. Kennedy, the United States became a world leader in ensuring that American trade policy is designed to encourage economic growth in developing countries.

President Kennedy said that American apathy toward poor-country development “would be disastrous to our national security, harmful to our comparative prosperity, and offensive to our conscience. It is a moral imperative for the United States to construct trade policies that foster development. 

One billion people exist on less than a dollar a day right now.  The income gap between the Least Developed Countries and the world’s industrialized countries grew by nearly 40 percent over the last 25 years. The income of those people in rich countries is now 93 times as those living in the Least Developed Countries. For nearly a generation, we know that the world’s poor have gotten much poorer.  

When you consider President Kennedy’s words, the call to action is compelling. While we work toward a broad, multilateral agreement to lower trade barriers to goods and services produced in poor countries, we should also ensure that our unilateral policies are constructed as wisely as possible in order to spur development.

The legislation before us takes us a critical step in that direction.  Let me highlight some of the more important provisions in HR 6560, which is supported by a broad range of stakeholders including producer, importer, and consumer groups. 

HR 6560 will extend the Generalized System of Preferences for one-year, providing producers in poor countries the certainty they need to retain and attract investment, while providing importers access to affordable goods that are critical to their supply chain.  U.S. consumers will benefit as a result. 

Importantly, this extension provides the Congress some breathing room to examine how GSP can be improved to foster greater development abroad, while also providing American producers greater certainty and opportunity.

The bill before us makes a narrow, but critical change to the way we treat apparel imports from the Dominican Republic. This change, which is supported by all the key stakeholders, including the U.S. textile industry, will better enable the Dominican Republic’s apparel producers to compete with producers in East and Southeast Asia.  

Anchoring a textile and apparel industry in Central America strengthens the economies of the entire western hemisphere.  This provision also builds upon progress made earlier this year with respect to Haiti, helping to foster much-needed economic growth in the Caribbean.

Lastly, this bill addresses two issues that are of particular concern to me because they relate to our trade policy toward sub-Saharan Africa. For the past decade, my colleagues and I have continued to explore ways to encourage more investment and job creation in sub-Saharan Africa. We have done this primarily through enacting the African Growth and Opportunity Act (AGOA), in 2000. 

Some of our wishes have come true. We’ve seen the growth of an apparel industry in southern Africa, which has created hundreds of thousands of jobs. And it has provided hope for economic progress and justice. 

AGOA has contributed positively toward an increase in exports from sub-Saharan Africa, and a diversification of exports, which is good for economic growth and for stability in the region.  But AGOA has also demonstrated that a trade policy is only one component of a development policy. 

Beginning in 2006, we experimented with a new idea to encourage greater investment in the upstream production of apparel.  We called this proposal the Abundant Supply Provision. 

It encouraged or required African apparel producers to first use locally-produced fabric before sourcing fabric from producers in places like Asia.  While well-intended, this provision has had the opposite effect of what proponents sought.  

Earlier this month, the Committee on Ways and Means hosted the trade ministers from the countries of sub-Saharan Africa.  They told us that apparel exports under AGOA have declined 15 percent this year and that thousands of jobs are at risk, if we do not appeal the abundant supply provision.  By doing so today, we demonstrate that we have listened to Africa and that we are responding, not as Democrats or Republicans, but as Americans.

In addition, we will help enable the sub-Saharan African nation of Mauritius to compete in the global apparel industry by enabling them the ability to use third-country fabric in its apparel exports that qualify under AGOA.

I look forward to working with my colleagues to devise other measures that will better encourage upstream investment in sub-Saharan Africa to promote job creation and economic growth.

This legislation is a strong bi-partisan measure and I want to recognize the leadership of Ways and Means Chairman Charles Rangel, Ranking Member Jim McCrery, Trade Subcommittee Chairman Sander Levin and Subcommittee Ranking Member Wally Herger.

I also want to recognize and thank the staff whose tireless efforts in the trenches have been invaluable.  They are Tim Reif, Angela Ellard, Behnaz Kibria and Warren Payne.

I believe our rightful place is at the front of the line when it comes to fighting global poverty by supporting economic and social justice.  I believe that’s what the U.S. meant in 2000 when we signed onto the United Nations Millennium Development Goals.  We know our current policies fall short and tonight we are moving in the right direction.

I urge my colleagues to support H.R. 6560, because President John F. Kennedy was right back then and today. 

Let us learn from history and follow the inspiration of a great American leader who believed the United States, Democrat and Republican, had the legislative duty and moral responsibility to lead the world.

Thank you.  I reserve the balance of my time.