WASHINGTON, June 17 /U.S. Newswire/ -- Following is a transcriptof a White House press briefing by Deputy National SecurityAdvisor Jim Steinberg; Assistant to the President for InternationalEconomics Dan Tarullo; Deputy U.S. Trade Representative Jeff Lang;and Deputy Secretary of the Treasury Larry Summers (1 of 3):The Briefing Room
3:00 P.M. EDTMR. TARULLO: Good afternoon, everyone. We just had, I think, avery energetic and extraordinarily attended event on the Africatradeand investment initiative up in Room 450. We're here to provideadditional background information for you, though it is an on therecord providing of information.I thought I would just start very briefly by indicating thepremises on the basis of which we have proceeded with the Africatrade and investment initiative of the administration, thelegislation we're working on with the members of Congress whom yousaw in Room 450 today, and the programs and policies which thepresident will be discussing with his counterparts at the Summit ofthe 8 in Denver this weekend.The premises are really essentially three: First, that Africa isnot, and particularly Sub-Saharan Africa, is not monolithic. Thereare different economies; there are different sets of policies; thereare different performances.The second point which derives from that is that there areactually some extraordinary success stories in Africa. There arecountries, which the President mentioned, which are growing atdouble-digit rates. There are a number of countries which sustainedgrowth rates of five percent or so.Third, there is a clear recognition that, important asdevelopment assistance is for meeting basic human needs, it is not,in and of itself, adequate to propel the Sub-Saharan Africancountries to a greater stage of development. On the contrary,there's a growing recognition that market reforms, tradeliberalization, and sound macroeconomic policies are essential tolaythe groundwork for development.That's really the basis upon which we've put together our ownprogram. As you heard from the members of Congress, it's the basisupon which they've drafted their legislation. And as I think you'llsee this weekend, it's the basis for our discussion with ourcounterparts from the other members of the 8.What we're going to do in the rest of this briefing is havethree short presentations -- one by Larry Summers, who has justreturned from Africa. The fact is we've been discussing thisinitiative with African leaders, officials from the outset. Larrywent to Africa and has the most recent information about theirreactions to what we're doing. And Jeff Lang, from the Deputy U.S.Trade Representative, will discuss the trade elements of ourapproach. And finally, Jim Steinberg, the Deputy National SecurityAdvisor, will brief on the security and political aspects of whatwe're doing.Larry.MR. SUMMERS: I just returned from Africa two weeks ago where Irepresented the United States at the annual meeting of the AfricanDevelopment Bank and met with finance ministers of a substantialnumber of African countries.What I was struck by was that a new wind is blowing throughAfrica. It was there in the standing room only conference thatattracted 600 people to discuss private investment opportunities inAfrica. It was there in the recommendation by a major Wall Streetfirm of the T-bills issued by a number of different Africangovernments. It was there in the entrepreneurs investing U.S.pension fund money in private African infrastructure. It was therein the sense that with the dramatic changes in South Africa, therewas the real prospect that the southern part of the Africancontinentcould lead the entire continent towards prosperity. It was therewhen I visited Mozambique, by some measures the poorest country inthe world, and met the competing Internet providers to that country.So, while there is a very long way to go, what I was struck bywas that the leadership of a number of countries were on to theprogram of market-oriented reform and wanted more than anything elseto have the same kind of dialogue with the government of the UnitedStates or with the governments of the G-7 countries that the nationsof Latin America do -- dialogue that is finance minister to financeminister, trade minister to trade minister, commerce minister tocommerce minister -- rather than between their government and theproviders of foreign aid. And I was left very much encouraged bythe success stories that there already are, and by the sense thatthere may well be many more success stories that can show Africa inthe years ahead.I might just conclude with one note that made a very deepimpression on me. I was struck in each of the countries I visitedand in many of the meetings that I attended by how much Ron Brown'swork in Africa had meant. The number of people who said that whatRon Brown did was very special, that he was the first Americanofficial who came here to do business, not to do charity, and howimportant that had been to them and how important it was to themthatthe United States continue the work that Ron Brown started. And Ithink what the event here today was really all about was carrying onthat effort to bring trade and investment all over the world, andespecially to Africa.Q How much does this -- down beyond the entrepreneurs andinvestors?DEPUTY SECRETARY SUMMERS: Let me answer this one question andthen I think there are other presentations. In nearly threecountries in Sub-Saharan Africa in the last year, you saw positiveeconomic growth and increases in living standards. It was the besteconomic performance for Africa in a decade. Meetings that Ivisited were in Cote d'Ivoire where living standards have beenrisingat a few percent a year for the last several years. We had anopportunity to visit Mozambique where standards of living areincreasing at a rate where, if it was sustained, you would seelivingstandards almost double within a decade. And you saw that in newschools, in villages that had access to better water than they hadhad before.So there is a very long way for Africa to go after a couple ofdecades that have been very difficult. But I think there are quitea number of encouraging indicators. And it's not just about moneyfor a few investors, it's really about higher standards of living.MR. LANG: On the trade front, I should say that we have beenconsulting in detail with Africans for some time now. We met withthem at an interagency group at the Singapore ministerial of theWorld Trade Organization. I think we were the only industrializedcountry to meet with African trade ministers. We had 35 of the 48Sub-Saharan ministers attending, and representatives of all theothergovernments. We've spoken with them in Geneva and here inWashington repeatedly over the last year in designing the program.Let me just say with respect to the substance of this thing, Iwant to emphasize what Dan said about the diversity of the region.We do have 48 countries; it's a population of 700 million, but thereare differences between the countries. And the program, both theone that's being designed on the Hill and the program here, areidentical in the fact that they allow increased trade benefits forcountries throughout the region that are least developed, and thereare more least-developed countries in Sub-Saharan Africa than anyother region of the world.But, in addition, for those countries that undertake reform,such as opening their markets to investment and binding substantialsections of their tariff schedules at reasonable rates of duty,therewill be additional trade access benefits here in the United Statesunder these programs. So that should make it attractive forcountries to move toward reform. And that's the object of theexercise; to emphasize and reinforce the interest Africansthemselveshave expressed to us repeatedly in opening up their economies. Therates of growth they want to achieve will be achieved when they openup to trade and investment. And we're trying to reinforce that bygiving them even greater access to the United States than theyalready have, which is substantial.MR. STEINBERG: Let me just say a word about what we're doing onthe security side which is really a complement to the long-termstrategy that goes behind the strategy for economic growth andinvestment that my colleagues have talked about. There areobviously a number of areas of concern and conflict in Africa. Andthe international community has been involved in a variety of waysover the past couple of years, through U.N. efforts as in Mozambiqueand Angola, and also in supporting regional efforts such as what thewest African states are doing in Liberia.It's been increasingly clear to both Africans and us that thereis a real need for strengthening Africa's own ability to provideleadership and capabilities in trying to deal with conflictmanagement and conflict prevention. And last year, the Presidentlaunched his initiative on developing an Africa crisis responseforceand developing and strengthening the capabilities of Africancountries themselves to provide peacekeeping and other conflictprevention support. This has already won considerable support amongthe African countries.We've been working very closely with the OAU and sub-regionalorganizations. And at Denver this year, under the President'sinitiative, the 8 are going to take a further step to coordinatetheir efforts to try to support this and, in fact, a number of donorcountries, including Europeans, have also been interesting infindingways to support Africa's indigenous capabilities.And at the summit, we will see a statement by the 8 indicatingtheir intention to try to coordinate their efforts and to try tostrengthen the ability of African countries, particularly workingthrough African regional and subregional organizations, to try todevelop their own abilities to work together to try to deal withconflict prevention, and this will be an important complement to theeconomic side of the Africa agenda.MR. TARULLO: Questions? Yes.Q The change in strategy towards encouraging investment, is thisthe first step in that, or have there been a series of steps leadingup to this package?MR. TARULLO: Larry should supplement this from the vantage pointof our participation in the international financial institutionswhere I think over the years we have been shifting emphasis. Interms of the administration's position, we've taken a series ofstepsover the course of the last couple of years to try to promote tradeand investment with Africa. Part of that is through simply raisingthe awareness of a lot of U.S. businesses about the potential in anumber of African countries. You saw today some CEOs from somelarge American companies. They probably are still not in themajority in terms of people recognizing that there isdifferentiation, there are opportunities. And, indeed, there was aWhite House conference held just to that end.There have also been efforts within OPIC, for example, in aninformal way and some of the other trade promoting institutions.And, of course, when Secretary Brown made his trips to Africa, hewasvery much carrying this message.Q There was a White House conference on this?MR. TARULLO: There was an investment conference that was alreadysponsored sometime ago, yes.Q How many trips did Secretary Brown make to Africa?MR. TARULLO: There's at least two that I'm aware of, but I don'thonestly know how many more. Four? Susan says four total.Q Traditionally, there hasn't been much interest from privateinvestors in investing in infrastructure like roads, railroads andthe like, but this has been generally a prerogative of governmentswhich have helped to attract private business. According to yourplan, do you think that private investors will go into these fields,or will this be provided through the increased bilateral aid, whichis --MR. TARULLO: Larry was just at this infrastructure conference.Why don't you take this question?DEPUTY SECRETARY SUMMERS: I think in general in the developingworld you're seeing a change in traditional patterns ininfrastructure finance. And you're seeing more emphasis on privateinvestment in electric utilities; in some cases, in private tollroads; in many cases, in private water supplies systems; and in avery large number of cases, privatization of telecommunicationsinfrastructures. And you've seen a number of African countriesprivatize their phone companies or with plans to privatize theirphone companies.And so I think there is substantial scope for private sectorinvestment in infrastructure, particularly if there can be a stableregulatory framework. And this is something that in Africa, butmore generally around the world, in which the United States hasencouraged -- and I think encouraged with some success -- theinternational financial institutions to become increasingly involvedin. The International Finance Corporation at the World Bank hashelped to support a number of deals by being prepared to take astakein them. And the World Bank has been increasingly active inproviding guarantees.One thing that is part of this program, which represents acontinuation of an effort that really took a major step forward atlast year's summit, is the debt relief for a number of the mosthighly indebted countries. By writing off the debt or a substantialpart of the debt to the international financial institutions and bymaking adjustments on debt burdens to the United States and otherindustrialized countries, you create a situation where the incentivefor investment is greatly enhanced because profitable investmentscanbe used to pay off investors rather than being used to serve olddebts. So one of the reasons why we think debt relief is mostimportant is because it reduces the debt overhang and in that wayencourages private investment.When I was in Mozambique, the GNP of Mozambique is less than $2billion, but the expectation was that it would attract a few hundredmillion dollars in private investment each year for the next couple,which represents a very substantial fraction of GDP much larger thanmost other developing countries.Q And what do you do about that? I mean, is there any morecommitment to a deeper debt relief than you had done before or not?DEPUTY SECRETARY SUMMERS: Uganda recently received the -- wasthe first country to benefit from the debt relief from the so-calledHIPC initiative -- highly indebted poor countries -- and we expectthat in coming months, several other African countries will benefitfrom that initiative. As one component of this initiative, thePresident will seek congressional funding to extinguish theconcessional debt owed to the United States by highly indebtedAfrican countries that are meeting stringent conditions for economicreform.MR. TARULLO: One other piece on the infrastructure, which isthat part of the program would create a half billion OPIC fund tosupport private infrastructure investments in Africa.Q Security question: How concerned is the United States aboutthe situation in the former Congo -- excuse me, in the former Zaire?What -- is there anything encouraging that's happening there fromtheU.S. perspective? And would this African security arrangement thatyou described have made any difference in that situation?MR. STEINBERG: I think there's an opportunity there. And Ithink that one of the things that we are trying to do is try to workwith the new leadership in the former Zaire, in the DemocraticRepublic of the Congo to try to seize that opportunity.There is with the change in government with there, I think weare trying to emphasize the need to move on to a transition process,to an elected government, to open elections, and to really open thedoors to economic investment, the kinds of things my colleagues havebeen talking about today.As you know, Ambassador Richardson has already twice met withMr. Kabila to indicate both our willingness to work wit this newgovernment to try to move forward and provide assistance as theybegin to make progress both in democratic reform, in dealing withthehuman rights issues that we're concerned about there and theeconomicreforms and we're pushing very hard, because we do think that withthe change there, there is a chance that there can be a greateropportunity. It's a country with great riches and greatpossibilities which have not been seized from the people of thatcountry for a long time.Q What is his reaction?MR. STEINBERG: I think the conversations have been verypositive. I think that Ambassador Richardson has come away with asense that there is an understanding of the need to move forward,butwe've made clear that we're going to be looking for that to bedemonstrated in his actions and not just in what he has had to say.Q How much is the African debt that we'll be asking Congress toforgive, and is there going to be an effort at Denver to get theother G-7 countries to do an equal specific amount of debt relief,orjust a general statement in behalf of debt relief?MR. TARULLO: I can begin answering the second part of thequestion and we'll get to the answer to the first in a moment. Wehave already been working with our G-7 partners on the HIPC debtinitiative, and what we are looking for at Denver is a reinforcementof the commitment of those partners to move forward deliberately tofollow the example with Uganda and do a debt reduction plan forotherof the African Countries. What we're basically looking for here issome more momentum for a program whose terms and the approach forwhich have been agreed upon.Larry, do you want to answer the first part?ASSISTANT SECRETARY SUMMERS: I can't give you a specific numberbecause it depends upon how many countries meet the eligibilitycriteria and over what time period the countries meet theeligibilitycriteria. What I can do is say that as an example, the debt reliefthat has been provided to Uganda will provide some $340 million thatotherwise would have been paid as debt service that is insteadavailable to the Ugandan budget to meet crucial expenditures inhealth, education and other priorities.Q Larry, could you elaborate on what Ron Brown did when he wasover in Africa?ASSISTANT SECRETARY SUMMERS: He did a number of things. Ithink that the two most important -- two of the most importantthingsthat he did was he went and he met with his counterparts in Africainthe same way that he went and met with his counterparts in Asia orinLatin America, and that had not been the previous pattern for U.S.economic officials to come and discuss the business environment anddiscuss particular deals and particular business opportunities inparticular countries when they visited Africa in the way that theydid when they visited other continents.Second, he didn't come alone. He came alone with delegationsof businessmen, businessmen seeking to export products to Africanmarkets, businessmen looking for investment opportunities. Forexample, in the Cote d'Ivoire, Secretary Brown had visited Coted'Ivoire in 1995. At the time of his visit, there wereapproximately 40 American companies doing business in Cote d'Ivoire.Two years later, in part as a consequence of theconsciousness-raising that his trip achieved and in part as aconsequence of the continued economic reform in Cote d'Ivoire, wewere told that there were about 85 companies who were doing businessin Africa.So I think what he did was, he focused -- helped to focusAfrican governments on the important opportunity to do business withAmerica, and he focused American business on the opportunity to dobusiness with Africa.Q Can you put some of the dollar figures into context for us?I mean, a half a billion dollars in the U.S. context for an entirecontinent doesn't sound on the surface to be a lot of money. Isthat --MR. TARULLO: Well, remember, it's leveraging private finance atthe same time in OPIC. It depends on how the deals go. But themultiplier effect would be significant. If the -- remember, it'simportant to go back to a point that Jeff Lang made and that othershave alluded to. We can't make Africa development. We can't makeit happen. What we can do is to provide support for adoption andmaintenance of the kinds of policies which will produce developmentin African countries. We can do that through trade, we can do itthrough ensuring investments, we can do it through our policies inthe multilateral lending institutions.But ultimately -- and this is a message which I think all of uscontinue to hear from African economic officials -- ultimately,theirpolicies are necessary for a sound basis for development. What wecan do is to make sure that those policies have an outlet in tradeand investment in the rest of the world.Q Are you signing on to the same formula as the McDermott billand the special access preferences for textiles and leather goods?MR. TARULLO: There are still -- on some of the trade itemsincluding those, we still are talking about exactly about how thoseprovisions should be drafted. As you know, the world has acomplicated set of rules for textile trade, and we're trying to makesure that we align the kinds of preferences that we're offering in avariety of areas to a variety of developing countries. But I thinkthat on the basis of the conversations thus far, we'll come to ameeting of the minds on that fairly soon.Q Did the First Lady have any role in the development of thispolicy? I notice there was a collection of her speeches passed out.MR. TARULLO: The First Lady has certainly had extensivediscussions with a number of us about her experiences, what she sawin Africa and have gone back and forth on the kinds of programs from-- particularly on microenterprises and some of the smaller economicdevelopment initiatives, and so I think the answer is yes, there hasbeen an interactive role to a process that was already going on.Q How much pressure will the U.S. put on African countries toreform, politically speaking?MR. TARULLO: To reform in political terms?Q Yes, because we've given aid to countries such as Kenya for along time, and yet Kenya is an extraordinary corrupt andundemocraticcountry.MR. STEINBERG: I think we've been very deeply involved in that,and I think that one of the things in our initiative here is thatwhile the focus is on economic reforms as for the enhanced benefitsof the thing -- that we do reserve the right to take into accountbroader considerations. And that remains a part of our overallstrategy.There are different elements to this, obviously. There areconditions for what the IFFYs do in terms of their assistance andwhat the United States does in our bilateral aid. But it's verymuch a part of our overall bilateral assistance program to look atthese things and to make sure that, as we move forward, that they'relinked to a broad range of reforms.And I think though they're obviously -- further progress needsto be made with a number of countries, we make that very much a partof the decision as AID and other aspects of our bilateral assistancegoes forward.Q -- in Uganda, I mean, that is not a democratic country.MR. STEINBERG: I mean, the good is not the enemy -- the bestshould not be the enemy of the good here. There have beenconsiderable progress. And we do insist on progress. We don'texpect it all to be accomplished overnight. But at the same time,we do look for further reforms. I mean, it's all relative. If youlook at where Uganda has come from, I think you -- whatever thecontinued issues there, it is certainly a dramatic improvement overwhat we saw not too long ago in Uganda.And I think there had been steady progress in those countries,and those were precisely the countries we have supported. If youlook at some of the real success stories in countries like Mali,likewhat we are seeing now in Mozambique, that our efforts --althoughouraid is not unlimited -- we do very much target it to try to assistinthose things. And much of the aid that we give is directedprecisely at those things -- at promoting democratization, atgrass-roots kinds of efforts. So I would say, it's very muchcentral to our overall assistance program.Q In terms of the trade liberalization, are we going to open ourmarkets here in the United States without receiving a similarcommitment from other countries to the G-8?MR. LANG: No, on the first benefit, the generalized system ofpreferences, there are a series of statutory qualifications forcountries that get that benefit. What we're doing is expanding thatbenefit by about 20 percent of our tariff schedule line items fortheleast developed countries in the region -- of the 48 countries, Ithink around 30 are least developed.For the countries that undertake the more ambitious reforms, wewill get reciprocal benefits in the sense that they will undertakeobligations in the World Trade Organization which they have not yetundertaken because most of them came out of the Uruguay Round withvery few tariff bindings. A few countries did have many, but mostdid not. So we will get access to their markets, but so will therest of the world. And that's why the President is taking thismatter to the G-8.Q Could I just follow on that? In terms of what you're seekingfrom the other G-7 members, are you looking for -- in addition todebt relief, are you looking for other trade aspects of what -- fromthe G-7 numbers, trade benefits?MR. TARULLO: What we're basically asking is that each countrywith its own system of trade preferences and approach to tradepreferences move forward on providing more for Africa -- greateraccess, greater encouragement to market reform development and theexports that come with it. So we're not seeking a harmonized systemwhere everybody would do the same thing. We don't -- that wouldprobably lead to delays. What we're seeking instead is thateverybody move forward.Q To what extent does world protectionism prohibit Africandevelopment? Do they have a lot to gain from the removal of tradeprotections in the developed world?MR. LANG: Well, they have something to gain. But the questiondoes tap into an important element of this. In the United States,for example, half our schedule will be at zero in six years undertheUruguay Round cuts, and we also provide zero benefits beyond that todeveloping countries. Nonetheless, we are going to try andextend the benefit as far as possible in order to give themas many opportunities of access to our market. And we're hopingthat these countries that undertake the most ambitious reform willfind that, along with the coordinated benefits from theinternationalfinancial institutions, an attractive incentive to undertake thosebenefits.I might say that the interagency nature of this initiative,coordinating both the international financial institutions andtrade,is in many ways a first in any government and an important part ofthe initiative. The interplay between those incentives is veryimportant for those especially ambitious countries.Q Does this trade liberalization go forward without getting likeJapan and Europe et cetera to lower their barriers -- do we go aheadeven if we don't have commitments from them?MR. LANG: Absolutely. We have a clear national interest, asthe President outlined today, in the development of Africa andincreasing our trade and investment and economic relations generallywith the Sub-Saharan region of Africa. So we will go ahead, but wethink that it would be advisable for our other trading partners tomove ahead autonomously in whatever way they think is appropriate.Q Do you have any data in connection with the -- opportunityavailable in countries like Ghana, Gabon and Nigeria in the area oftelecommunication, solar energy and --MR. LANG: Specific to those sectors and countries I think we cancome up with some information. But --MR. TARULLO: Are you asking about specific opportunities or whatthe trade and investment flows are right now in those sectors?Q Both.MR. TARULLO: All of the above? We haven't done acountry-sectoral analysis. What we have done is identified some ofthe areas where, for example, investment would be most helpful.Larry's trip to Africa was part of that process. So, too, in theprocess that USTR has run, paying attention to the kinds of productsfor which there may be production and export from Africa. So we'velooked at it kind of in the aggregate, but we haven't broken it downin country by country, sector by sector.MR. LANG: I don't think we can manage the economics of tradethat way. I will say -- you mentioned basic telecommunications, andin that regard, a number of countries could undertake commitments inthe basic telecommunications services sector where the agreement isopen for additional obligations from -- beyond the 70 countries thatare already obligated as of February 15th. And that would makethese countries very attractive investment opportunities forAmericanand other large telecommunications services companies. So in thatsector, there is both a market and a trade opportunity if thecountries make the necessary WTO commitments.THE PRESS: Thank you.END 3:35 P.M. EDT
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