MR. CHAIRMAN, CONGRESSMAN PHILIP M. CRANE,
MEMBERS OF THE COMMITTEE,
MEMBERS OF THE DIPLOMATIC CORPS,
DISTINGUISHED GUESTS,
LADIES AND GENTLEMEN.
IT IS A GREAT HONOUR AND PRIVILEGE FOR ME TO APPEAR AND TESTIFY
BEFORE THIS HONOURABLE SUB-COMMITTEE ON THE AGOA ACCELERATION ACT.
ALLOW ME ON BEHALF OF THE GOVERNMENT OF LESOTHO TO REGISTER OUR
SINCERE APPRECIATION, GRATITUDE AND A SENSE OF HOPE FOR THE
INTRODUCTION OF THE LEGISLATION TO ACCELERATE THE AFRICAN GROWTH AND
OPPORTUNITY ACT. WE WERE VERY MUCH DELIGHTED TO WITNESS THE
CONTINUED BIPARTISAN INITIATIVE TO IMPROVE TRADE AND DEVELOPMENT
WITH AFRICA ON APRIL 1, 2004 WHEN HONOURABLE BILL THOMAS, THE
CHAIRMAN OF THE HOUSE COMMITTEE ON WAYS AND MEANS, ACCOMPANIED,
INTER ALIA, BY YOU, MR. CHAIRMAN, REPRESENTATIVES MCDERMOTT, RANGEL,
ROYCE, HOUGHTON, PAYNE, BRADY AND OTHERS, INTRODUCED THE AGOA
ACCELERATION ACT.
I HAVE CAREFULLY STUDIED THE AGOA III TEXT AND AM DEEPLY ENCOURAGED,
AND BELIEVE THAT MY COLLEAGUES IN THE SUB-SAHARAN AFRICAN (SSA)
COUNTRIES SHARE THE SAME VIEWS. I SHARE THE SAME SENTIMENTS THAT
THIS BOLD STEP WOULD HELP EXPEDITE GROWTH IN AFRICAN TRADE AND
CONTINUE TO STRENGTHEN THE FOUNDATION FOR DEVELOPMENT IN AFRICA.
MR. CHAIRMAN,
THE FACT THAT THE BILL AIMS TO LEGISLATE, AMONGST OTHERS, THAT THE
TEXTILES AND APPAREL PROVISIONS UNDER AGOA SHOULD BE INTERPRETED IN
A BROAD AND TRADE-EXPANDING MANNER IS ENCOURAGING. ALSO,
MODIFICATION OF THE RULES OF ORIGIN ON THIRD COUNTRY PRODUCED CUFFS
AND COLLARS IS MOST WELCOME. IN ADDITION, WE HEARTILY WELCOME THE
NEW INITIATIVES IN THE BILL ON PROMOTION OF INVESTMENT IN
INFRASTRUCTURE, AN IMPEDIMENT THAT HAS CURBED THE DYNAMISM OF AGOA I
AND II.
THE INVOLVEMENT IN THE AGRICULTURAL SECTOR THROUGH PROVISION OF
TECHNICAL ASSISTANCE AND CAPACITY BUILDING IN SANITARY AND
PHYTOSANITARY STANDARDS ISSUES TO HELP US TO MEET THE US
REQUIREMENTS, WILL CONTRIBUTE TOWARDS THE DEVELOPMENT OF THIS
IMPORTANT SECTOR THAT AFFECTS THE LIVES OF MILLIONS OF OUR RURAL
COMMUNITIES. IN LESOTHO, ABOUT 85% OF THE POPULATION LIVES IN THE
RURAL AREAS AND IS DEPENDENT ON AGRICULTURE FOR ITS LIVELIHOOD.
CHAIR, THE BILL IS A BILL OF HOPE. OUR HOPES FOR THE ACCELERATION OF
THE DEVELOPMENT OF MOST OF OUR ECONOMIES IN THE SSA COUNTRIES ARE
PINNED ON THIS BILL.
I AM HERE TO PROVIDE TESTIMONY ON THE URGENT NEED FOR ACTION ON AGOA
III. IT IS IMPORTANT THAT WE SEND PROPER SIGNALS TO BOTH INVESTORS
AND RETAILERS AS THE IMPLICATIONS OF THE UNCERTAINTY CLOUDING THE
EXTENSION OF AGOA AND THE THIRD COUNTRY FABRIC BENEFITS ARE ALREADY
BEING TRANSLATED INTO UNPALATABLE CONSEQUENCES OF CANCELLED AND
SUSPENDED ORDERS. TO BE SPECIFIC, MR. CHAIRMAN,
IN THE CASE OF LESOTHO
ALONE, AS WE SPEAK ORDERS TO THE VALUE OF ABOUT US$40 MILLION HAVE
BEEN AFFECTED. CLEARLY, THE PROSPECTS ARE NOT ENCOURAGING AS JOB
LOSSES, LAY-OFFS AND ECONOMIC SLOW-DOWN IS LOOMING AND AGOA’S
POTENTIAL TO EXPAND AND ENCOURAGE ECONOMIC GROWTH IN THE CERTIFIED
AGOA BENEFICIARY COUNTRIES IS AT STAKE.
AGOA’S PURPOSE IS TO HELP SPUR PROSPERITY AND DEVELOPMENT IN
SUB-SAHARAN AFRICAN COUNTRIES AND INTEGRATE OUR ECONOMIES FULLY IN
THE GLOBAL ECONOMY BY GIVING US GREATER ACCESS TO THE US MARKET.
MOST OF US IN THE SUB-SAHARAN AFRICA BEAR TESTIMONY TODAY THAT AGOA
IS WORKING. IN PARTICULAR, LESOTHO HAS SEEN, SINCE THE INCEPTION OF
AGOA IN 2000, AND CERTIFICATION ON 21 APRIL IN 2001, DRAMATICALLY
POSITIVE CHANGES IN HER ECONOMIC LANDSCAPE. TODAY, THERE ARE ABOUT
50,000 JOBS IN THE APPAREL INDUSTRIAL SECTOR AS AGAINST 20,000 JOBS
IN THE YEAR 2000, MAKING THE PRIVATE SECTOR THE NUMBER ONE EMPLOYER,
EXCEEDING GOVERNMENT EMPLOYMENT FOR THE FIRST TIME SINCE OUR
INDEPENDENCE IN 1966.
THE VALUE OF LESOTHO’S EXPORTS TO THE UNITED STATES WAS US$140
MILLION IN 2000, US$215 MILLION IN 2001, US$320 MILLION IN 2002 AND
INCREASED TO U.S.$400 MILLION IN 2003. THUS, THE INCREASE OF
LESOTHO’S EXPORTS TO THE US FOR THE YEARS 2001 TO 2003 IS DIRECTLY
ATTRIBUTABLE TO THE AGOA INITIATIVE.
THE AGOA TRADE DIRECTLY CONTRIBUTED TO 34% OF LESOTHO’S GDP IN 2003
AND WITH MULTIPLIER EFFECT IT WAS AROUND 40%. AGOA TRADE ENABLED US
TO IMPROVE OUR TRADE BALANCE BY APPROXIMATELY US 100 MILLION. AS A
RESULT, LESOTHO’S BALANCE OF PAYMENTS FIRMLY REMAINED ABOVE 5 MONTHS
OF IMPORTS COVER. THE AGOA INITIATIVE CONTRIBUTED TO 13% OF OUR
TOTAL REVENUE IN 2003 AND THEREBY IMPROVED OUR FISCAL BALANCE.
THE SUSTAINED GROWTH EXPERIENCED IN LESOTHO IN THE LAST 3 YEARS,
DRIVEN MAINLY BY THE AGOA TRADE, PROVIDES THE BASIS FOR POVERTY
REDUCTION ON A SUSTAINABLE BASIS IN THE COUNTRY. CLEARLY, LESOTHO AS
A LEAST DEVELOPED COUNTRY BEARS TESTIMONY TO THE IMPORTANT ROLE THAT
AGOA CAN PLAY IN TURNING AROUND THE ECONOMIES OF THE POOR
SUB-SAHARAN AFRICAN COUNTRIES, IF GIVEN ADEQUATE TIME AND AN
ENABLING ENVIRONMENT.
MR. CHAIRMAN,
DISTINGUISHED LADIES AND GENTLEMEN,
THE GOVERNMENT OF LESOTHO AND INDEED MOST OF THE SUB-SAHARAN AFRICAN
COUNTRIES THAT ARE CLASSIFIED AS LEAST DEVELOPED COUNTRIES AND AS
SUCH BENEFICIARIES OF THE AGOA AND THE CURRENT THIRD COUNTRY FABRIC
BENEFITS, SURELY, HAVE REASON TO REJOICE AT THE NEWS OF THE
IMPENDING AND BIPARTISAN INITIATIVE TO INTRODUCE THE AGOA
ACCELERATION ACT OF 2004. WE WELCOME THIS TIMELY INTERVENTION FOR
WHICH THE HOUSE COMMITTEE ON WAYS AND MEANS, UNDER THE ABLE
LEADERSHIP OF CONGRESSMAN THOMAS, DESERVES COMMENDATION. PASSING
THIS LEGISLATION WILL PROFOUNDLY AND POSITIVELY IMPACT ON THE
SOCIO-ECONOMIC DEVELOPMENT PROGRAMMES OF JOB CREATION AND POVERTY
ERADICATION, WHICH ARE OUR PRIMARY NATIONAL GOALS.
IN DECEMBER 2003, MY COLLEAGUES AND I (TRADE MINISTERS FROM AGOA-ELIGIBLE
COUNTRIES) MET WITH PRESIDENT BUSH AND SENIOR US ADMINISTRATION
OFFICIALS IN WASHINGTON, D.C., DURING THE AGOA
FORUM (THIRD US-SUB-SAHARAN AFRICAN TRADE AND ECONOMIC COOPERATION
FORUM). WE WERE PARTICULARLY PLEASED AND ENCOURAGED BY PRESIDENT
BUSH’S PERSONAL, VISIONARY AND UNWAVERING SUPPORT, AND COMMITMENT TO
AGOA AND HIS PERSONAL ASSURANCE TO WORK CLOSELY WITH CONGRESS IN
ENSURING EXTENSION OF AGOA THEREBY ENCOURAGING AFRICAN SUPPORT FOR
OPEN MARKETS AND MULTILATERAL TRADE LIBERALIZATION.
MR. CHAIRMAN, TO REITERATE, AGOA HAS FACILITATED NEW INVESTMENT,
CREATED JOBS, AND HELPED FORM COMMERCIAL LINKAGES THAT CONTINUE TO
FOSTER NEW INVESTMENT OPPORTUNITIES AND INCREASE PROSPERITY IN
SUB-SAHARAN AFRICA OVER THE LONG TERM. IN THE CASE OF LESOTHO, WE
HAVE WITNESSED FOREIGN DIRECT INVESTMENT IN THE TEXTILES AND
CLOTHING SECTOR TO THE VALUE OF US $140 MILLION FOR PRODUCTION OF
DENIM FABRIC AND YARN, WE HAVE STARTED IMPORTING COTTON FROM SSA
COTTON PRODUCERS FOR THIS MILL WHICH WILL BE PRODUCING AROUND 2 MSME
OF DENIM FABRIC PER MONTH AND IMPORTING AROUND 50,000 TONS OF COTTON
PER MONTH AT FULL PRODUCTION. THE PROSPECTS ARE BRIGHT AND WE CANNOT
LET AGOA FAIL.
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THE CONSEQUENCES OF NON-EXTENSION IN GENERAL, AND THE THIRD COUNTRY
FABRIC BENEFITS IN PARTICULAR, WOULD BE TOO GHASTLY TO CONTEMPLATE
AS OUR NASCENT TEXTILE AND CLOTHING INDUSTRY IS STRUGGLING TO
POSITION ITSELF FOR THE STIFF GLOBAL COMPETITION IT HAS TO CONTEND
WITH AFTER THE EXPIRY OF THE AGOA BENEFITS, AND THE REMOVAL OF
QUOTAS UNDER THE WTO AGREEMENT ON TEXTILES AND CLOTHING IN JANUARY,
2005.
MR. CHAIRMAN, AGOA IS A GROWTH AND DEVELOPMENT INITIATIVE DESIGNED
TO MEET THE NEEDS OF THE REGION IN A SUSTAINABLE MANNER BY FOSTERING
REGIONAL INTEGRATION. IN THIS REGARD, THE EXTENSION OF AGOA TO 2015
WOULD PROVIDE ELIGIBLE SUB-SAHARAN AFRICA COUNTRIES TO FULLY
INTEGRATE, PARTICULARLY THEIR TEXTILE AND APPAREL INDUSTRIES.
WE WISH TO RECORD OUR APPRECIATION OF DEVELOPMENT DIMENSION OF THE
SECTIONS OF THE BILL IN RELATION TO THE TECHNICAL ASSISTANCE
PROVISION THAT WILL MAKE IT EASIER FOR AFRICAN COUNTRIES TO DEVELOP
THE FRAMEWORK TO PARTICIPATE IN THE BENEFITS AND TAKE FULL ADVANTAGE
OF THE PROPOSED
/ 9 /
EXTENSION BY THREE YEARS, OF THE THIRD COUNTRY FABRIC PROVISION
WHICH IS SET TO EXPIRE ON 30 SEPTEMBER, 2004.
WE ARE GRATIFIED ONCE MORE THAT THE BILL WILL BE INTRODUCED IN THE
HOUSE OF REPRESENTATIVES SHORTLY AND HOPE THAT IT WILL QUICKLY GO
THROUGH TO THE FLOOR OF THE SENATE. THEREFORE, IT IS OUR FERVENT
HOPE THAT THE SENATE WILL ALSO RECOGNIZE THE CRITICAL IMPORTANCE OF
AGOA AND CHALLENGES THEREON. ON THIS NOTE, I URGE BOTH THE HOUSE OF
REPRESENTATIVES AND THE SENATE TO USE THEIR BEST ENDEAVOURS TO
FAST-TRACK THE TABLING OF THE BILL THROUGH CONGRESS IN SUCH A MANNER
THAT AGOA ACCELERATION ACT OF 2004 WILL BE IN THE US STATUTE-BOOK BY
JUNE 2004.
MR. CHAIRMAN, WE REMAIN CONFIDENT THAT, ONCE AGAIN, OUR FRIENDS AT
THE CAPITOL HILL WILL RESOLUTELY AND DECISIVELY RESPOND TO OUR
CLARION CALL AT THIS HOUR OF NEED.
I THANK YOU ALL FOR YOUR ATTENTION.
TESTIMONY
BY THE HONOURABLE MPHO ‘MELI MALIE,
LESOTHO MINISTER OF TRADE AND INDUSTRY, COOPERATIVES AND MARKETING
DURING A PUBLIC HEARING
ON
THE AGOA ACCELERATION ACT 2004 (H.R. 4103) BEFORE THE SUB-COMMITTEE
ON TRADE OF THE HOUSE COMMITTEE ON
WAYS AND MEANS, CONGRESS OF THE
UNITED STATES, WASHINGTON, D.C.,
29 APRIL, 2004.
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