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Transcript of Foreign Press Center briefing with Todd J. Moss, Deputy Assistant Secretary for African Affairs, U.S. Department of State; Franklin Moore, Deputy Assistant Administrator for the Africa Bureau from USAID and Andrew Baukol, Deputy Assistant Secretary for Africa and the Middle East, U.S. Department of Treasury

MODERATOR: Good morning and welcome to the Washington Foreign Press Center. Today we are going to be talking about the 7th AGOA Forum, which will take place in Washington, D.C. on July 14th through 16th. And we have with us Todd J. Moss, Deputy Assistant Secretary for African Affairs from the U.S. Department of State. We’ve also got Andrew Baukol, Deputy Assistant Secretary for Africa and the Middle East from the U.S. Department of Treasury, and Franklin Moore, Deputy Assistant Administrator for the Africa Bureau from USAID will be on hand to answer additional questions, if you have them for USAID. Unfortunately, USTR’s Assistant Trade Representative for Africa Florizelle Lizer could not join us today. However, if you have questions for USTR, we will take them and get them to USTR and try to get them back to you.

We are also joined by our Foreign Press Center in New York, so welcome. And without further ado, I will hand the podium over to Deputy Assistant Secretary Moss, who will make brief opening remarks. Thank you.

MR. MOSS: Thank you. And good morning, everyone. The future of Sub-Saharan Africa continues to look brighter, as we’re seeing a growing number of countries begin to reap the benefits of sound, economic policy changes, improved governance and new investments in key sectors undertaken over the last decade. With the continued growth of responsible and representative governments in Africa and the recovery from several lengthy conflicts on the continent, much of Africa now is poised to see much more robust economic growth and an improvement in living standards.

The pace of economic growth and development in Africa is, of course, paramount concern to the United States and the international community. The United States continues to demonstrate worldwide leadership in expanding the opportunities for even greater African prosperity in the future through initiatives such as the African Growth and Opportunity Act, or AGOA. AGOA is a progressive U.S. trade and investment policy toward the continent that is reducing barriers to trade, increasing diversified exports, creating jobs and expanding opportunities for Africans to build better lives. Specifically, AGOA provides trade preferences to designated countries that are making progress in economic, legal and human rights reforms.

Under AGOA, eligible countries can export almost any product to the United States duty-free. Right now, that’s nearly 6,500 products from apparel to automobiles and footwear to fruit. AGOA also provides a framework for technical assistance to help countries take greater advantage of trade preferences.

Last year, in 2007, over 98 percent of U.S. imports from AGOA-eligible countries entered this country duty-free. Total trade between the United States and Sub-Saharan Africa has grown to more than $81 billion last year and we’ve seen non-oil AGOA imports into the U.S. nearly triple since 2001. Currently we have 41 Sub-Saharan African countries that meet AGOA’s eligibility criteria that can take advantage of the trade benefits offered under the act. This year, we’re pleased to add Togo and, as of yesterday, the union of Comoros, so we’re up to 41 total countries.

The – as part of the AGOA legislation, we have an annual dialogue between the United States and Africa. This is called the AGOA Forum. The seventh such forum will take place here in Washington, D.C., July 14-16. The theme for this year’s forum is: Mobilizing Private Investment for Trade and Growth. This dynamic event will set the stage for active discussions focusing on the linkages between private investment and economic growth, as well as providing African countries with the ability to take advantage of trade opportunities in AGOA and elsewhere around the globe. This event will bring together senior U.S. administration officials, African Government ministers, as well as U.S. and African business and civil society stakeholders to accelerate the exchange of ideas and information critical to AGOA’s continued success and, indeed, to Africa’s continued economic success.

The ministerial plenary sessions, along with associated breakouts will be held on July 15th. In addition, there will be private sector and civil society hosted events on the 14th and 16th that will highlight additional opportunities between the United States and Africa. At the ministerial session, the focus will be on two critical areas that affect trade and economic growth. The morning will deal with improving the business climate with breakouts looking at key sectors and the afternoon will look at access to capital with breakout sessions on each of the main financial instruments.

Just -- before turning to my Treasury colleague, I just want to highlight the role of OPIC. The Overseas Private Investment Corporation is a U.S. Government agency that fosters economic development in Sub-Saharan Africa by providing project finance, direct loans and loan guarantees and political risk insurance for U.S. investors. In addition, OPIC provides support to independently managed private equity funds. Now, OPIC is currently providing over $2 billion in financing and political risk insurance for 83 projects and investment funds in Sub-Saharan Africa and they’ve been adding new private equity funds, especially over the last two years. And OPIC is now supporting 14 separate private investment funds -- work operating in Africa, which represent a billion dollars in commitments by OPIC and they’re leveraging as much as $4 billion in new private investment in the region. And in recognition of OPIC’s innovation in support of African economic prosperity, we can confirm that OPIC President and CEO Rob Mosbacher will give the keynote over lunch to the ministers on the 15th.

So with that, I’ll turn to my colleagues, thank you.

MR. BAUKOL: Thanks, Todd. I’m Andy Baukol from the Treasury Department and I’ll make even briefer remarks. Just to note that the Treasury is very excited about participating in this year’s AGOA Forum, particularly given that the themes are mobilizing capital and improving investment climates. These issues, of course, are essential for boosting growth in Africa and allowing sub-Saharan African countries to take advantage of the trade preferences that the AGOA program offers.

Just a couple of data points to reiterate how well Africa is doing recently. Just in the last seven years, private capital flows to sub-Saharan Africa have increased by about five times, totaling about – over $50 billion last year, and portfolio flows to Africa have increased more than 14 times in the last few years. Africa has enjoyed a very rapidly growing economy in the last few years. We aim to try to help cement the gains in this progress, even in the face of some global pressures that might help detract from growth in the near term.

Secretary Paulson will be participating in the AGOA Forum on July 15th, participating in a plenary session on mobilizing capital. Also on that panel will be a World Bank leader as well as private sector. And Treasury will chair two of the panels during the breakout sessions: one on financial sector deepening, and one on developing local debt markets. The Treasury has almost 20 technical advisors in Africa, full-time, helping African countries develop their banking systems, their budget processes, and we aim to build on the lessons that they have learned to help inform other African countries about some of the things they can do, both right and wrong, to help develop their financial markets.

Thank you.

MODERATOR: Okay. We’ll take your questions now. If you can, please, state your name and news organization before asking a question. And also, please, indicate who you’re asking the question of.

Does anybody have a question? Mr. Butty.

QUESTION: Thank you. My name is James Butty. I work for the Voice of America, Africa Division. I co-host a program Daybreak Africa. I wonder the – Mr. Moss or any of you can address – I like first – you give us, I think the -- how AGOA is doing. But what do you say to those who say that AGOA has been, kind of, a stagnant piece of legislation, that is not really fulfilling the promise it once had? Particularly, people are saying that perhaps it’s being a little hijacked by corporate America.

MODERATOR: And if our speakers would, please stay at the podium, that would be great for camera purposes. Thanks.

MR. MOSS: Okay. Well, thank you for that question. I think that if we look back at the intention of AGOA, AGOA is mainly about increasing opportunities for trade by providing market access; essentially, reducing trade barriers for private firms and individuals to trade between Africa and the United States. And as we know from economic history, market access is one small piece of helping to boost trade and economic growth.

I don’t think that AGOA was ever intended to be all-encompassing. It was primarily intended to deal with the market access issue, so that we made sure that the United States tariff regime was no longer a restriction on Africa trade. The other side is that, of course, capacity building needs to be an important of that, and there are trade capacity building elements on – in AGOA. But of course that’s also going to be a very long-term – a very long-term process. It’s not something you can turn on over night. And I actually think that’s why this year’s focus is especially important. Because what we’re now seeing in Africa is renewed interest from global investors in looking at African companies, and particularly looking at African infrastructure. And what Africa – one of the main constraints on greater trade, is African infrastructure right now and the size of African companies. Many of them are just not large enough to compete globally.

So the entrance of private investment going into railways and roads and ports and airports is exactly the kind of private investment that Africa needs to help boost trade. And that’s one of the reasons that we chose private investment as one of the key themes this year, not only because there’s growing interest, as my Treasury colleague highlighted, from private investors, but also that private investment is one of the key components for helping to boost trade even further in the future.

QUESTION: I have a follow up, please? Can I?

MODERATOR: Yeah.

QUESTION: Does this then include small businesses, like minority-owned businesses? If we are talking about going to invest in Africa, does this include minority businesses? I mean, can you explain a little bit about what type of businesses are investing – are taking advantage of AGOA from the United States side?

MR. MOSS: Well, let me say that there’s no – there’s no discrimination on what size firms would be eligible for AGOA benefits in Africa. Those can be very small firms or it can be very large firms. So on the African side, there’s no discrimination at all. So when you’re looking at market access, I don’t think that that necessarily would be relevant.

On our trade capacity building side, there is an emphasis on small and medium enterprises. Maybe my AID colleague could talk a little bit about some of the – the small and medium enterprise finance initiatives that we have. Because if we think about what the future of Africa’s economy – what are the bright spots – we really need more companies in Africa to be established. We need the small companies to grow into large companies. These are African companies, and finding technical assistance and financial assistance to help generate, incubate those firms and allow them to grow and compete on the global market is really going to be the key for Africa to generate jobs and wealth and to get on the path that we’ve seen followed in other regions of the world.

MR. MOORE: You want me to follow that up? Why don’t I follow that up a bit? One of the pieces that we, USAID, will be looking at and chairing a working session on is financing for small and medium enterprises. It is our view that it is primarily small and medium enterprises that are going to take advantage of the non-oil aspects of export to the United States. It is those sized enterprises that tend to be the enterprises that raise employment and that diversify the economy. So we will be hosting one of the working groups. Our co-host is managing director and CEO of Equity Bank in Kenya. And we’ll be looking at both financing as well as technical assistance.

If I might, Todd talked about OPIC, for example, which has a number of financing options. We work with OPIC to help small and medium enterprises put together a package that is financeable, so that those who have those small and medium enterprises that may have very good ideas that may be within reach of the U.S. market but not quite there, we have been providing them with some technical assistance, particularly through the African Global Competitiveness Initiative, where we have four units that are on the continent that are providing technical assistance to those small and medium enterprises so that they’re more financeable, and also assisting them to come to trade shows in the United States, etcetera.

So concentrating on the African side, the small and medium enterprises is a really important component of AGOA.

MODERATOR: We have another question? Charles? Charles Smith.

QUESTION: Charles Smith, South Africa, Media 24. The first question is what – who decides on what products would get assistance? Would the Americans prescribe for, say, African companies, you know, what Americans would want -- say, gold, diamonds, agricultural products, to invest in? And what specific about agricultural products like meat and corn and so on? And would America block products like corn where you want the world to get your corn? So maybe you can just talk a little bit about that, please.

MR. MOSS: Unfortunately, I think I’m going to have to defer you to our USTR colleagues on the details of how the product lines are chosen. I’m not aware of that precise process. I just do know that there are 6,500 products that are now duty-free, so we can pass that question to the USTR. Franklin, please?

MR. MOORE: Generally, you’ll find that the products are chosen by those who want to export, not by those who want to import. Now, we have been providing technical assistance. For example, if there is a company – let me speak specifically. There’s a company in Rwanda – Peace Baskets. And Peace Baskets is a combination of women that are scattered pretty much all over Rwanda who actually are weaving baskets and bringing them into the United States. It was their idea that it would be baskets that they would bring into the United States. They’ve gotten some technical assistance, both originally from USAID, but now they’re getting technical assistance from those companies that are importing their baskets, who are helping them with color selection, pattern selection, etcetera. In other words, are helping them to customize their baskets more for a U.S. market than the baskets they might make for other markets.

When you get to agricultural products, we are working primarily with the Department of Agriculture on – the big piece for agricultural imports is sanitary – phyto-sanitary rules. And we’ve been working both with USTR and with the Department of Agriculture, who oversees that in the United States, to help overcome some of the problems there are with agricultural products. I would tend to say you spoke of corn specifically.

QUESTION: Corn and meat.

MR. MOORE: Well, I would tend to say that there probably is not much corn that is competitive with corn coming in the United States because of the shipment distances. Meat has tended to be something that has become a specialty item in Africa, but it tends to be more for the European markets than it is for the U.S. market. Not to say that there isn’t some time in the future that some of it will – as specialty meat, in particular – would actually come to the United States.

MODERATOR: We have a question from New York. Would you please let us know your name and news organization in New York, and who you are addressing your question to?

QUESTION: Sure. My name is James Reinl. I’m journalist for a newspaper called The National from Abu Dhabi. I was – the question is open to anyone who wants to answer it, but it’s following on from something Mr. – is it Mr. Moss, or Mr. Mass, was saying?

MODERATOR: Moss.

QUESTION: Moss? I was interested in what he was saying about private investment and trying to encourage more private investment in infrastructure projects in Africa. And I was wondering if any members of the panel could give some examples of private investment infrastructure development projects that have gone into Africa, have turned a profit, and have benefited African countries.

MR. MOSS: I could give one. Well, let me quickly give you one before I turn over the floor to others. If you look at one piece of emerging trade coming out of Africa – this is non-oil – let’s talk about flowers. If you look at flowers, you’ll find that East Africa has captured not so much the United States, but they have captured 40 percent of the rose trade in Europe. That has been primarily Kenya and Ethiopia, but an emerging flower grower is Tanzania. And Tanzania is becoming increasingly competitive because they now have an international airport in the flower-growing region in the northwest, in Kilimanjaro.

One of the pieces that is necessary for them to become increasingly competitive is cold storage at that airport. There is a small Tanzanian company that is looking at the cold storage and looking at improvements to the cold storage. With improvements in cold storage, they will probably be able to ship directly out of northwestern Tanzania – this is just outside of Arusha – rather than having to truck their flowers to Nairobi, as they currently are doing. In that way, that piece of investment and infrastructure is piggybacking on the fact that there is now an airport that is bringing tourists in, and has the potential to make them far more competitive. There’s one example of such infrastructure.

MODERATOR: Is anybody else going to answer that? Do we have other questions? Up here in the front, please?

QUESTION: Thank you. My name is Nomar Addison, AMIP News Service. My question is this: Has every country taken advantage of the facility? I recently learned, and correct me if I’m wrong, that Benin is an eligible country, but has not exported anything to the United States. Thank you.

MR. MOSS: I don’t have any specific trade numbers on Benin, but I’d be surprised if there – if the number was zero.

QUESTION: Okay.

MR. MOSS: You know, even the smallest country, we have some – there is some trade, even if it starts from a very small base. But the point is not necessarily the overall numbers, but rather, the trends. And we want to try to encourage that trend so that it grows, and that we keep our eye on the long-term goal, which is to get as many African countries to middle income status as quickly as possible, keeping in mind that this is going to take – it takes many years to grow from – from a small GDP to a large GDP, so --

MODERATOR: We have another question from Mr. Butty.

QUESTION: Thank you. The – it says here that U.S. total imports from sub-Saharan Africa are more than triple during this period to $67.4 billion. That is a large amount. What is the distributive volume? Because here, if petroleum – petroleum accounted for the largest portion of AGOA imports, is $3.4 billion – that mean – perhaps it’s – this is – correct me if I’m wrong. This – a lot of countries now are benefitting. What’s the distributive for volume for this $67.4 billion? In other words, what – what is – what are – where are the products coming from?

MR. MOSS: Yeah. We can get you the exact information on the country-by-country breakdown. I don’t have that with me here, but I would say that given – given the U.S. oil imports and rising oil prices, it’s not surprising that oil comprises a significant portion of this. But I would highlight that the non-oil AGOA trade has been growing extremely quickly. We’ve got – that portion has nearly tripled in the last six years, which is an important trend, and includes a wide range of countries that are not involved in the oil market. So – let me just also add on the data point, we can – if you’re interested in a specific number for Benin, we can certainly get that for you.

QUESTION: Okay. It would be good if somebody can call us, call me at Voice of America, because I’d like to get audio response. If we get answers to some of these questions that have been postponed, if you can call me later this afternoon. I can leave my number so I can get something on record for my show. Thank you.

MODERATOR: Okay. Another question from Media 24, South Africa.

QUESTION: Just to get some more success stories. It was a perfect example, the one from Tanzania. Can you give some more success stories where ports for boat or airports that led to, you know, opening up a whole new world for some of these African countries, please?

MR. MOSS: Okay. We have a regional – as part of AGOA, there are regional trade hubs in Africa. There is a southern African trade hub that can give you some examples of specific companies that have benefited. I’m just looking through my list now. And rather than just pick one at random, I’d rather just have that information shared with you. But they do keep a list of trade missions and then they track, you know, which companies are having successful deals and try to see whether that trend is increasing or not.

MODERATOR: Do we have any other questions? Anybody in New York? Okay. Well, then we thank you for coming and joining us today to talk about the forum. And thank you all for joining us. We will conclude here.