[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]







                        LOOKING BEYOND 2025 FOR
                 TRADE WITH SUB-SAHARAN AFRICA, HAITI,
                               AND OTHERS

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON TRADE

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 12, 2024

                               __________

                          Serial No. 118-TR05

                               __________

         Printed for the use of the Committee on Ways and Means











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                                   _______
            
            
                 U.S. GOVERNMENT PUBLISHING OFFICE 
                 
57-107                    WASHINGTON : 2024 




























                      COMMITTEE ON WAYS AND MEANS

                    JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois               EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio                  BILL PASCRELL, JR., New Jersey
JODEY ARRINGTON, Texas               DANNY DAVIS, Illinois
DREW FERGUSON, Georgia               LINDA SANCHEZ, California
RON ESTES, Kansas                    TERRI SEWELL, Alabama
LLOYD SMUCKER, Pennsylvania          SUZAN DelBENE, Washington
KEVIN HERN, Oklahoma                 JUDY CHU, California
CAROL MILLER, West Virginia          GWEN MOORE, Wisconsin
GREG MURPHY, North Carolina          DAN KILDEE, Michigan
DAVID KUSTOFF, Tennessee             DON BEYER, Virginia
BRIAN FITZPATRICK, Pennsylvania      DWIGHT EVANS, Pennsylvania
GREG STEUBE, Florida                 BRAD SCHNEIDER, Illinois
CLAUDIA TENNEY, New York             JIMMY PANETTA, California
MICHELLE FISCHBACH, Minnesota        JIMMY GOMEZ, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio

                       Mark Roman, Staff Director
                 Brandon Casey, Minority Chief Counsel
                                 ------                                

                         SUBCOMMITTEE ON TRADE

                    ADRIAN SMITH, Nebraska, Chairman
VERN BUCHANAN, Florida               EARL BLUMENAUER, Oregon
DARIN LaHOOD, Illinois               DAN KILDEE, Michigan
JODEY ARRINGTON, Texas               JIMMY PANETTA, California
RON ESTES, Kansas                    SUZAN DelBENE, Washington
CAROL MILLER, West Virginia          DON BEYER, Virginia
LLOYD SMUCKER, Pennsylvania          LINDA SANCHEZ, California
GREG MURPHY, North Carolina          TERRI SEWELL, Alabama
GREG STEUBE, Florida                 BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota
DAVID KUSTOFF, Tennessee 









































                         C  O  N  T  E  N  T  S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Adrian Smith, Nebraska, Chairman............................     1
Hon. Earl Blumenauer, Oregon, Ranking Member.....................     3
Advisory of June 12, 2024 announcing the hearing.................     V

                               WITNESSES

Skip Richmond, Founder and Co-CEO, DTRT Apparel Group............     6
Daniel Runde, Senior Vice President and Schreyer Chair in Global 
  Analysis, Center for Strategic and International Studies.......    14
Af Nasser, Vice President of Sourcing & COE, Cintas Corporation..    29
Marggie Peters Muhika, Deputy Regional Director of Africa, 
  Solidarity Center..............................................    34

                    MEMBER QUESTIONS FOR THE RECORD

Member Questions for the Record and Responses from Daniel Runde, 
  Senior Vice President and Schreyer Chair in Global Analysis, 
  Center for Strategic and International Studies.................    78

                   PUBLIC SUBMISSIONS FOR THE RECORD

Public Submissions...............................................    89

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   LOOKING BEYOND 2025 FOR TRADE WITH SUB-SAHARAN AFRICA, HAITI, AND 
                                 OTHERS

                              ----------                              


                        WEDNESDAY, JUNE 12, 2024

                  House of Representatives,
                             Subcommittee on Trade,
                               Committee on Ways and Means,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:15 p.m., in 
Room 1100, Longworth House Office Building, Hon. Adrian Smith 
[chairman of the subcommittee] presiding.
    Chairman SMITH. The subcommittee will come to order. Thank 
you, Ranking Member Blumenauer, subcommittee members, and 
certainly our witnesses here today.
    Today's hearing is an important opportunity to discuss the 
set of trade preferences programs scheduled to expire in 2025, 
including the African Growth and Opportunity Act, AGOA, and 
U.S. Trade Preference Programs for Haiti and the Nepal Trade 
Preference Program.
    These programs are designed to foster economic growth in 
some of the least developed countries and economies in the 
world while strengthening U.S. leadership and influence abroad.
    This is especially important as countries like China and 
Russia seek to spread their malign influence globally.
    In April, this committee took an important first step by 
passing the Generalized System of Preferences Reform Act, GSP, 
which would provide the most significant reform of the GSP 
Program since it began.
    Last month I introduced legislation with the support of 20 
committee Republicans to reauthorize the Miscellaneous Tariff 
Bill Process as well. Now we must build on this effort by 
considering reform and renewal of our Trade Preference Programs 
set to expire in 2025.
    Since its inception in 2000, the AGOA Program has been the 
cornerstone of U.S. trade and economic engagement with sub-
Saharan Africa. The program has two important elements--one, 
duty-free access to the U.S. market, and two, eligibility 
criteria to ensure beneficiary countries meet U.S. standards in 
key areas like human rights, governance, rule of law, and fair 
treatment for foreign companies and exporters.
    These elements are designed to support sub-Saharan African 
economies, develop trade capacity, and strengthen U.S. 
relationships with beneficiary countries.
    Today's hearing is a continuation of a deliberate Ways and 
Means Committee process regarding AGOA renewal, which has 
included roundtables, member visits to AGOA countries, and now 
a public hearing.
    I encourage all interested stakeholders to participate in 
this hearing through submissions for the record.
    A few key areas we should address through AGOA renewal 
include: One, pursuing reciprocal market access for American 
farmers, workers, and businesses in sub-Saharan Africa;
    Two, addressing the process of graduation from AGOA when a 
country surpasses the per capita income threshold;
    And three, transforming AGOA to encourage more value-added 
manufacturing on the African continent while ensuring third 
countries are not receiving disproportionate benefits.
    But first we must ensure that participation in AGOA 
supports the development of science- and rules-based standards 
in beneficiary countries and use the annual review process to 
address any unfair treatment of U.S. ag products.
    All AGOA countries must provide fair market access to U.S. 
producers and manufacturers. In the case of countries that are 
prepared for that next step, we must pursue robust 
conversations to move such an agreement forward.
    I once again call on the Biden administration to develop a 
coherent, effective strategy for pursuing comprehensive trade 
agreements and seeking congressional approval of such 
agreements.
    It is well past time--well past time--to resume 
negotiations of a comprehensive, enforceable trade agreement 
with Kenya, for example. My colleagues on both sides of the 
aisle agree on this.
    Kenya wants to step up and move on from a temporary 
unilateral preference program to a reciprocal, mutually 
beneficial relationship, and the only thing standing in the way 
is this current administration.
    When countries have reached the income level to graduate 
from the program, I hope we can consider commonsense reforms to 
ensure they are not punished for success in economic 
development. Congress should consider creative solutions to 
prevent a graduation cliff and secure market access for our 
exporters.
    In each of these areas, improving access to African markets 
will support American workers, businesses, and farmers with 
little downside since AGOA already provides generous access to 
the U.S. market.
    I am eager to hear more about how Congress can encourage 
more value-added manufacturing on the African continent.
    African cotton should not be sent halfway across the globe 
to be made into fabric just to be sent back to Africa for final 
manufacturing. The people of Africa should be the beneficiaries 
of AGOA.
    Next I will turn to our Haiti Trade Preference Programs. 
They were created by Congress through the Haitian Hemispheric 
Opportunity through Partnership Encouragement and the Haiti 
Economic Lift Program Act.
    These programs provide important benefits to imports of 
textiles and apparel products from Haiti. The apparel industry 
supports thousands of jobs for the Haitian people, providing 
important economic stability in this time of uncertainty and 
unrest.
    I appreciate the leadership of Representative Wenstrup on 
this and look forward to working with him regarding next steps 
on the program.
    Also, the Nepal Trade Preference Program, which was 
established in 2015, to help Nepal recover from devastating 
earthquakes is set to expire next year. I look forward to 
working with my colleagues and stakeholders on next steps for 
the program.
    I now recognize the Ranking Member, Mr. Blumenauer, for his 
opening statement.
    Mr. BLUMENAUER. Thank you, Mr. Chairman.
    In the course of the hearing and the opening statements, 
you will see there are a number of areas of agreement. The 
African Growth and Opportunity Act, also known as AGOA, and the 
Haitian Hemispheric Opportunity through Partnership and 
Encouragement Act, known as HOPE, are the cornerstone of U.S. 
trade policy with sub-Saharan Africa and Haiti.
    The world, however, looks a lot different than it did when 
we enacted these programs decades ago. We now have years of 
experience to help understand what is working and what could be 
improved to raise living standards and bring more trade and 
investment both to Africa and the Caribbean.
    This hearing is the next step in the committee's ongoing 
review of American preference programs for sub-Saharan Africa 
and Haiti, and there is clear, bipartisan consensus on 
promoting trade and investment with Africa and the Caribbean.
    Then Chairman Neal set a strong tone for reviewing and 
improving these programs last Congress. This Congress, Chairman 
Jason Smith and Trade Subcommittee chair, Mr. Adrian Smith, 
have continued the committee's engagement, and this hearing 
today is an example of that.
    Their leadership is buttressed by several of my colleagues 
who have demonstrated continued commitment to Africa and Haiti.
    Chairman Smith mentioned some of his Republican colleagues. 
I would be remiss in not acknowledging Ms. Sewell, Ms. Moore, 
Mr. Evans, and Ms. Plaskett.
    And by the way, we wish continued recovery for Mr. Evans 
from his recent health problems.
    House Democrats have collectively shown an impenetrable 
commitment to the people of sub-Saharan Africa and Haiti and 
will pursue the U.S. trade policies that advance prosperity for 
the people of these regions.
    I can speak confidently for House Democrats when I say we 
are firmly committed to reauthorization of AGOA and HOPE before 
their expiration next year.
    But reauthorizing the programs without improving them is a 
missed opportunity. The International Trade Commission's report 
on these programs demonstrated the urgent need for reform.
    It is important that our trade policies not only address 
long-term standing concerns, such as the low utilization rates 
in AGOA and labor violations in Haiti, which we have had some 
direct experience with, but also reflect the realities of today 
and pave the way for the future that we want to see.
    AGOA is a success story. It has opened new opportunities 
for economic engagement and has resulted in tens of thousands 
of jobs in sub-Saharan Africa.
    It is critical Congress drives more investment to the 
continent, which creates opportunities for business both in 
Africa and the United States, as well as for the larger 
diaspora.
    But as proud as we are of AGOA's achievements, it has not 
achieved all that we had hoped. As we consider the future of 
AGOA, we need to find creative ways to improve AGOA's 
utilization rate, increase value-added exports to the United 
States, and ensure that the benefits, in fact, flow to the 
African beneficiary countries.
    Africa has become a leader in addressing climate change. It 
is the site of key critical minerals and is quickly becoming a 
tech and innovation powerhouse.
    The creative sector, including TV, film, and music, are 
essential to the economies of the continent. Our American trade 
policy must reflect these developments and make the most of 
these opportunities.
    Our trade policy should recognize that certain African 
economies are more advanced and better integrated globally 
since AGOA was enacted, making it important to both consider 
AGOA graduation rules, and developing mutually beneficial and 
reciprocal trade agreements with other sub-Saharan African 
countries.
    Like sub-Saharan Africa, the United States has a moral 
obligation to remain committed to the Haitian people. That 
obligation is now more important than ever.
    Haiti played a central role in the American Revolutionary 
War, as we are coming up to that 250th anniversary, where 
hundreds of Haitians fought for American independence, a 
feature that is little known in this country.
    And years later, Haiti would defeat the French, become the 
first Black republic, influencing the rise of abolitionist and 
anti-colonial movements all over the world, including the 
United States.
    But the record of the United States dealing with that 
revolution is shameful, and we are still paying the price--more 
importantly, the Haitian people are paying the price today.
    Many of Haiti's difficulties are because of a failure of 
American policy. That is why our preference programs for Haiti 
are so important. They provide an opportunity to help 
strengthen Haiti's economy and our trading relationship and 
remediate past wrongs.
    But we must acknowledge known problems with implementation 
of our preference programs, especially concerning labor rights 
violations and noncompliance with Haiti's national labor laws.
    The United States has selectively engaged in this space on 
issues like forced labor in the sugar sector, but there is much 
more to do.
    Like any trading relationship, our relationship with Haiti 
requires work on both sides--work to improve labor conditions, 
political stability, and diversify Haiti's export to the United 
States.
    Mr. Chairman, I am convinced that today's hearing today is 
a step in that direction in this important work, and I 
appreciate you convening this and look forward to hearing from 
our witnesses.
    Chairman SMITH. Thank you, Mr. Blumenauer. I appreciate 
your input there.
    I now recognize the chairman of the full committee, Mr. 
Smith, for his opening statement.
    Chairman SMITH of Missouri. Thank you, Chairman Smith and 
Ranking Member Blumenauer, for holding today's hearing.
    As the committee continues to examine how best to 
reauthorize the African Growth and Opportunity Act program, as 
well as strengthen other trade relationships with other 
nations, while we have time to address the reauthorization of 
AGOA before its September 2025 expiration, there is no sense in 
waiting. And so I appreciate the trade subcommittee keeping the 
drumbeat going.
    This hearing follows two bipartisan roundtables we held 
earlier this year  one with ambassadors from several of the 
sub-Saharan Africa countries that participate in AGOA, and 
another with stakeholders that utilize AGOA in order to hear 
firsthand their perspectives on the program.
    The AGOA program has a successful track record of 
encouraging economic development in sub-Saharan Africa and 
greater access for U.S. agriculture products in that region.
    Something I have watched closely over the years, having 
attended an AGOA forum in Gabon back in 2015, under the 
program, American taxpayers have invested over $8 billion in 
trade-related activities in Africa over the past 20-plus years.
    Reauthorizing AGOA will ensure that American taxpayers get 
a positive return on their investment. It will also strengthen 
our economic relationship by making sure access to African 
markets for American exports, especially agriculture, is fair, 
and our trade relationships benefit American workers, farmers, 
and businesses.
    We also need to use our trade tools to counter the malign 
influence of countries like China and Russia. The AGOA program 
can play an important role in shoring up our critical supply 
chains to reduce our dependence on China.
    Earlier this year, the Ways and Means Committee approved 
trade reforms to counter China's growing military and economic 
influence around the world. This included the Generalized 
System of Preference Reform Act, introduced by Trade 
Subcommittee Chairman Smith, that would ban China from the GSP 
program and incentivize countries to grow their economies in 
partnership with the United States, not China.
    Those same reforms should be reflected in a reauthorization 
of AGOA.
    Meanwhile, our trade relationship with Haiti supports 
American manufacturing while encouraging stability in a nation 
that is currently suffering tremendous political and social 
turmoil.
    I have serious concerns with the violence that is taking 
place in Haiti, violence that recently took the lives of two 
individuals from my home state of Missouri who were in the 
country doing missionary work when they were killed by armed 
gang members.
    I want to thank Dr. Wenstrup in particular for his 
leadership on this issue, as well as a number of other members 
of this committee on both sides of the aisle.
    I appreciate their recognition that U.S. businesses can be 
a force for good, particularly for a nation like Haiti, which 
is the poorest country in the Western Hemisphere.
    Thank you again, Chairman Smith and Ranking Member 
Blumenauer, and to all of our witnesses for being here today.
    Chairman SMITH. Thank you.
    I now have the pleasure of introducing our witnesses for 
today's hearing. Skip Richmond is the founder and co-CEO of 
DTRT Apparel Group.
    Next we have Daniel Runde. He is the senior vice president 
and Schreyer Chair in Global Analysis at the Center for 
Strategic and International Studies.
    And I will yield to Dr. Wenstrup to introduce our next 
witness.
    Mr. WENSTRUP. Thank you, Mr. Chairman, and I am pleased to 
introduce Mr. Af Nasser, vice president of Sourcing Center of 
Excellence and Supplier Diversity at Cintas Corporation, a 
proud Ohio company, headquartered in the Cincinnati area. It 
has been a pleasure to watch Cintas grow through my lifetime.
    Cintas does great work across the United States every day, 
ensuring that millions of employees can go to work and perform 
their best by providing uniforms, supplies, first aid and 
safety products  two things very important to me as a 
physician.
    Cintas is uniquely positioned to provide a key perspective 
in our discussion today, as their global supply chain runs 
through both sub-Saharan Africa and Haiti.
    As many of my colleagues here know, I have been a 
supportive leader on Haiti trade issues over the last few 
years, and I credit Cintas Corporation with bringing this 
critical issue to my attention as early as 2019, when they 
shared with me their support for renewing the Caribbean Basin 
Trade Partnership Act.
    Working with Representative Terri Sewell, we got that bill 
done in 2020, and I am looking forward to doing the same with 
the HOPE/HELP preferences that are up for renewal right now.
    With that, Mr. Nasser, I want to welcome you and thank you 
for being here today.
    Chairman SMITH. Thank you, Dr. Wenstrup.
    And we also have Marggie Peters Muhika. She is the deputy 
regional director of Africa with the Solidarity Center.
    Again, thank you to all of our witnesses. I do want to say 
that your written statement will be made part of the record, 
and you each will have five minutes to deliver your remarks.
    Once that yellow light appears, if you wouldn't mind 
bringing the flight in for a landing, do what you can to stick 
within the five minutes.
    So with that, Mr. Richmond, you are recognized.

 STATEMENT OF SKIP RICHMOND, FOUNDER AND CO-CEO, DTRT APPAREL 
                             GROUP

    Mr. RICHMOND. Thank you. I would like to thank you for the 
opportunity to share our story and engage in this important 
conversation.
    My name is Skip Richmond. I was born and raised in the 
U.S., and I am the founder and co-CEO of DTRT Apparel Group, 
the largest apparel manufacturing company in West Africa. DTRT 
owns two factories in Ghana where we produce knitwear--
primarily T-shirts, polos, and hoodies--and other sportswear 
for large clothing brands in the U.S. and EU.
    We currently employ over 5,600 workers in Ghana, making 
over 50,000 garments per day.
    I would like to give you a brief background of how our 
business got started and what we have accomplished so far. I 
will also share with you some of the very exciting things we 
see ahead for our industry, and the African continent in 
general, that are dependent on a swift and timely, long-term 
renewal of AGOA.
    First, how we got started, my cofounder, Marc Hansult, and 
I first met in 2004 when we both went to work for a Hong Kong-
based trading company.
    In 2005, we needed to find a factory outside China to 
produce some basketball uniforms. We learned about AGOA at that 
time, and we traveled to Madagascar looking for a factory to 
produce goods for us.
    At the conclusion of that visit, the decision was made for 
the company to establish our own factory in Madagascar.
    Unfortunately, Madagascar experienced a coup a few years 
later in 2009 and lost its access to AGOA benefits as a result. 
That experience reinforced for us the importance of finding a 
stable democratic home for our future work.
    In 2013, Marc and I cofounded DTRT Apparel. DTRT stands for 
``Do the right thing.'' With two young children of my own at 
the time, I wanted to show my kids that it was possible to do 
good in the world and still make a good living.
    Although our industry has a bad reputation, justifiably in 
many cases, I don't know of any industry that holds so much 
power to do good in this world. What other industry can employ 
so many people, so quickly, from a socioeconomic population 
with such limited opportunity?
    Marc and I have always felt that a garment-manufacturing 
business can make a healthy profit, while treating our people 
and the planet with respect. We set out to harness the power of 
our industry to provide our local workers and their children a 
better future and to hopefully set an example for others in our 
industry.
    We chose Ghana as DTRT's home for several reasons--first 
its geography. From our experience in East Africa, we 
encountered transit times of 50 to 60 days or longer to get 
finished goods from the factory to the U.S.
    That very long lead time limited the customers we could 
service. To provide the shortest possible lead time to 
customers and expand our market, we were specifically 
interested in looking at a country in West Africa to minimize 
that time.
    Second, but just as important, Ghana is arguably the most 
stable democracy on the continent, having achieved multiple 
consecutive peaceful transitions of power over the past three 
decades.
    After our experience with the coup in Madagascar, 
establishing operations in a stable democracy was very 
important to us.
    Another critically important factor in our decision to 
operate in Ghana was the fact that it was possible for us to 
pay wages high enough that the jobs we provide can truly lift 
our local workers and their families out of poverty.
    Contrary to many places around the world that trap workers 
in poverty with their very low wages, we are having an enormous 
positive impact on the lives of our local workers and their 
families in Ghana.
    This year, 2024, marks the 10-year anniversary of our first 
garment exports from Ghana to the U.S. As mentioned earlier, we 
currently employ over 5,600 people, 76 percent of whom are 
women. Almost 50 percent of our supervisors and managers are 
women, and that number is increasing every month.
    There isn't a pool of experienced workers in Ghana like 
exists in Asia. We train every new worker, and the training 
cost is significant. It typically takes 6 months for a new 
worker to become efficient enough for us to break even.
    Without the benefits of AGOA, we wouldn't be able to afford 
to train so many people.
    Renewing AGOA now is critical to maintain the momentum we 
are currently seeing. When we started our business 10 years 
ago, it was very difficult to get the attention from major 
brands to bring their business to West Africa.
    But today there has never been more interest in sourcing 
from African manufacturers. The COVID pandemic highlighted how 
overdependent many companies remain on Chinese suppliers.
    Human rights issues and other geopolitical forces are 
forcing brands to seek alternatives to Asian suppliers like 
never before. Unlike years ago when barely any brands had 
Africa on their radar, today every major U.S. brand to whom we 
speak is exploring ways to source from Africa.
    Despite the many advantages that sourcing from AGOA-
eligible countries offer, African manufacturers can currently 
only fulfill a small fraction of what these U.S. brands need.
    Africa must clear two key hurdles to be competitive with 
established global players in the long run--developing human 
capacity through training of skilled garment workers and 
building regional value chains to supply fabrics and 
accessories.
    That training is happened already at DTRT and others in the 
region via on-the-job instruction from experienced ex-pats, but 
we can only afford to train because of the benefits from AGOA.
    The lack of existing input supply is where AGOA remains 
most essential. While a Chinese manufacturer can buy all their 
raw material inputs domestically, we must input nearly--or 
import nearly 100 percent of raw materials from overseas.
    Some of that investment is already happening, but 
uncertainty over when and for how long AGOA will be renewed, 
limits and delays needed investment. The ROI in investment in 
our industry is at least 7 years.
    Renewal of AGOA within this year for a minimum of 10 to 20 
years, would provide the sort of comfort that companies require 
before investing to maximize AGOA's impact.
    We would also like to highlight the continued importance of 
the Third Country Fabric Provision in any AGOA renewal. There 
are hundreds of different fabrics that will ultimately need to 
be produced in Africa for the continent to no longer be reliant 
on imported textiles.
    It will likely take decades for the necessary fabric mills 
to reach a scale where the continent will be self-sufficient.
    As such, the Third Country Fabric Provision would remain an 
essential clause in AGOA for at least the full term of any 
renewal.
    We started DTRT in 2014, when we knew AGOA was up for 
renewal just 1 year later, based on nothing more than faith 
that Congress would do the right thing and extend this 
important policy.
    We borrowed money from our friends and families, and we 
spent many years worrying about how we would make payroll at 
the end of the month.
    We expect to continue our rapid growth in the years to 
come. We believe we have played a key role in establishing West 
Africa as a viable manufacturing source for American apparel 
companies at a moment when for the first time ever, the entire 
industry is seeking alternatives to China.
    Congress can send a strong message to ensure AGOA fulfills 
its promise by renewing AGOA swiftly for another term.
    As I tell my own team regularly, don't let perfect be the 
enemy of good. Yes, AGOA can be improved, but delaying its 
renewal risks doing more harm to the momentum we are seeing 
than the potential good that added refinements might offer.
    I implore you as a citizen, taxpayer, and entrepreneur, to 
find a way to renew AGOA quickly, and if needed as-is, with the 
ability to refine it in the future if necessary.
    Please don't let the debate on improvements to AGOA be 
endless, and please remember that each passing day without 
renewal means delaying and possibly losing forever a 
significant amount of business for the continent of Africa to 
other parts of the world.
    Thank you very much.
    [The statement of Mr. Richmond follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman SMITH. Thank you, Mr. Richmond.
    Mr. Runde, you are recognized.

 STATEMENT OF DANIEL RUNDE, SENIOR VICE PRESIDENT AND SCHREYER 
      CHAIR IN GLOBAL ANALYSIS, CENTER FOR STRATEGIC AND 
                     INTERNATIONAL STUDIES

    Mr. RUNDE. Thank you. Chairman Smith, Ranking Member 
Blumenauer, and members of the subcommittee, thank you.
    There are three basic options for AGOA which include no 
AGOA renewal, a copy-paste renewal of the 2015 legislation, or 
three, enhancing AGOA with a series of modernizations.
    I have two bottom lines. First, I am in favor of renewing 
AGOA with some updates to the legislation. Second--and this is 
very important--failure to renew AGOA would be a strategic 
disaster for the United States.
    Champagne corks will pop in Beijing over our failure to 
renew AGOA. Our African partners will be enormously 
disappointed with us, and failure to pass AGOA means that 
American business will be disadvantaged in Africa.
    AGOA is the unilateral trade agreement that provides duty-
free access to the U.S. market. You all are aware of that.
    Like the rest of the world, Africa today is a different 
place than the Africa of 2000. Africa is a freer place than in, 
say, 1990. Africa's middle class has tripled to over 350 
million people. There are more smartphones in Africa than in 
the United States of America.
    The creation of the African Continental Free Trade Area, 
one of the largest free trade areas in the world, is a game-
changer. Linked with AGOA, AFCTA will encourage greater U.S. 
commercial investment in the African region because U.S. 
companies will be able to tap into suppliers across the 
continent.
    China's agreement with African countries has dramatically 
increased in the past decade. Fifty-two of the 54 African 
countries have signed on to Belt and Road. China has invested 
at least 2.5 times as much in African infrastructure as the 
entire Western world.
    The Chinese have ownership of 23 ports--or control of 23 
ports in Africa. China is consolidating global influence over 
mining, including in Africa. Today, Huawei owns up to 70 
percent of all 4G networks in sub-Saharan Africa.
    U.S. trade with African states is one-fifth the size of 
China-African trade.
    AGOA is part of our offer to Africa to counter China. So I 
have got several recommendations.
    First, renew AGOA, please, and make some improvements.
    There are some special considerations for the digital space 
and for minerals. Although there are no barriers to African 
digital trade exports to the United States, Congress has an 
opportunity to recognize the growing importance of digital 
trade.
    Language can be included in AGOA's reauthorization to 
develop a partnership, a digital partnership, with Africa that 
builds on emerging international standards and reduces barriers 
to digital trade in African countries.
    Right now there are no countries in Africa currently making 
electric vehicles or electric batteries, and there are no 
tariffs on basic raw materials and minerals, so--however, now 
would be the time for us to ramp up our partnership with 
African countries through the Minerals Strategic Partnership.
    Regardless of whether or not Congress determines if AGOA 
eligibility is the equivalent of an FTA for the purposes of the 
Inflation Reduction Act, the U.S. should launch a comprehensive 
development and development finance initiative along the lines 
of Power Africa for mining and minerals in Africa.
    Number 3, fix graduation eligibility. Renewals should fix 
graduation criteria so that countries that benefit from AGOA 
are not punished for their success by being graduated out of 
the program.
    Becoming a middle-income country like Mauritius means that 
these countries graduate from AGOA, and these countries lose 
their AGOA benefits.
    Four, we should create bilateral, free trade agreements on 
the African continent. We should think about regional free 
trade agreements along the lines of the CAFTA-DR agreement in 
Latin America for West, East, and Southern Africa.
    Fifth, we should adjust the timelines. Let's aim for at 
least a 10-year or even a 16-year renewal.
    Six, let's use foreign aid to support AGOA. In the next 
Congress, I hope we will develop a major foreign assistance 
initiative for mining and minerals.
    I hope we will develop a major foreign assistance 
initiative to close the digital divide.
    And three, I hope we develop a major foreign assistance and 
partnership initiative to create 20 to 30 private universities 
in Africa as we did in India and Costa Rica in the 1960s.
    Seven, the executive branch needs more than a binary on-off 
switch for AGOA. I know that South Africa is on your minds. And 
AGOA is a trade mechanism. It is not a political mechanism.
    When the United States experiences tensions or 
disagreements with certain African countries, it is tempting to 
treat AGOA as a stick. South Africa has been a particularly 
poor partner on a number of fronts, so I understand the 
temptation.
    We should instead employ a variety of political tools. The 
Coons Rish draft legislation would provide a larger menu of 
enforcement options, including formal warnings, probationary 
periods, and partial termination of benefits for certain 
products.
    Finally, beyond AGOA, we need a 21st century partnership 
for AGOA--for Africa, a 21st century partnership for Africa.
    We first need to pass AGOA, and then we need to come to a 
bipartisan consensus on a strategy for a 21st century U.S.-
Africa partnership, a strategy spanning trade deals, 
investment, capacity-building, and integration of new digital 
realities. Thank you.
    [The statement of Mr. Runde follows:]

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    Chairman SMITH. Thank you, Mr. Runde. Now I recognize Mr. 
Nasser. Please begin.

   STATEMENT OF AF NASSER, VICE PRESIDENT OF SOURCING & COE, 
                       CINTAS CORPORATION

    Mr. NASSER. Good afternoon, Chairman Smith, Ranking Member 
Blumenauer, and members of the subcommittee. Thank you for 
holding this hearing and the opportunity to testify on the 
importance of these trade preference programs.
    My name is Af Nasser, and I am the vice president of 
Sourcing Center of Excellence and Supplier Diversity for the 
Cintas Corporation.
    Cintas helps more than 1 million businesses of all types 
and sizes get ready to open their doors with confidence by 
providing a wide range of products including uniforms, mats, 
mops, restroom supplies, first aid and safety products, fire-
extinguishers and testing, and safety training.
    Cintas' operations touch almost every corner of the United 
States, and our employee partners are a driving force behind 
our shared accomplishments. Cintas employs approximately 45,000 
individuals in our workforce today.
    Before discussing our international supply chain, I would 
like to spend a moment highlighting our diverse supply chain 
here in the United States.
    In fiscal year 2024, Cintas spent more than $320 million 
with certified diverse suppliers which we define as a company 
that is headquartered in the United States or its Territories, 
and is owned, operated, and controlled by a U.S. citizen who is 
a minority, woman, or veteran.
    On a daily basis, I work closely with our global suppliers 
to ensure they conduct business in the same ethical and moral 
standard that we do as a company. Each and every supplier must 
comply with a vendor code of conduct as a condition of doing 
business with Cintas.
    In addition to sourcing from more than 23 countries, Cintas 
operates four manufacturing facilities that provide for 
standard uniform needs.
    Currently, we procure goods and products from a global 
network of international vendors, including Haiti, Kenya, 
Ethiopia, and Madagascar, which are being discussed here today.
    Renewal of the African Growth and Opportunity Act, and the 
Haitian Hemispheric Opportunity through Partnership 
Encouragement Act, and the Haiti Economic Lift Program Act, in 
advance of next year's expiration is critical to the continued 
success of Cintas.
    We strongly support the committee's efforts to reauthorize 
these trade preference programs and reduce trade barriers 
wherever possible.
    As we look to diversify our supply chain and minimize 
imports from China, Cintas's ongoing investment in Africa is 
critical. For this to be successful, preferences which enable 
us to source from markets on the continent are essential.
    I would like to spend a few moments highlighting a couple 
of countries starting with my mother's home country of Kenya. 
Kenya is a small but important supplier of apparel to the U.S. 
market and to Cintas.
    In 2023, U.S. apparel imports from Kenya were $488 million, 
accounting for just over half of 1 percent of total apparel 
imports.
    Cintas' apparel imports from Kenya accounted for 
approximately 5 percent of our total imports.
    Long-term renewal of AGOA would provide increased certainty 
for production, and as a result, potentially open increased 
opportunities in Kenya.
    Regardless of the legislative vehicle, we urge the 
committee to take a close look at the rules of origin to ensure 
they remain intact, or ideally enhanced, so that Kenya's 
apparel industry can not only remain competitive but also 
expands.
    I would also like to thank the committee, and specifically 
Congressman Wenstrup, and many others on this dais today for 
their work around the reauthorization of HOPE/HELP Act.
    Renewal of these programs will provide economic hope to 
Haiti as it struggles through its current political and 
security challenges.
    Haiti is an integral part of our Western Hemispheric supply 
chain. We first began producing in Haiti in 2002 and have 
greatly expanded our manufacturing footprint there over the 
last 20 years.
    Today, we indirectly employ approximately 4,000 Haitians 
through our dedicated supplier relationships.
    Our suppliers' large and dedicated labor pool also set the 
industry standard. For example, our primary Haitian supplier 
operates in clean and safe environments. A nutritious lunch and 
chilled water are available to all the employees. Once a week, 
a licensed physician from Port-au-Prince visits the plants to 
address any health concerns that employees may have.
    Even with these worker benefits, our Haitian supplier 
remains the most highly productive and cost-competitive source 
that we have globally.
    Currently, a significant portion of apparel production 
originates on Haitian soil. Unfortunately, the latest security 
challenges and arrests in the country have significantly 
hindered our ability to ship to the United States.
    We are cautiously optimistic that Kenya's commitment to 
insist the Haitians will be instrumental in allowing a return 
to normalcy for its citizens, the Port-au-Prince region, and 
the country.
    In closing, reauthorization of these critical trade 
preference programs will help reinforce the United States' 
commitment to develop in Africa, Haiti, and beyond.
    Thank you again to the committee for the opportunity to 
testify, and I look forward to any questions you have at the 
appropriate time.
    [The statement of Mr. Nasser follows:]

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    Chairman SMITH. Thank you, Mr. Nasser.
    Ms. Muhika, you are recognized.

STATEMENT OF MARGGIE PETERS MUHIKA, DEPUTY REGIONAL DIRECTOR OF 
                   AFRICA, SOLIDARITY CENTER

    Ms. MUHIKA. Chairman Smith, Ranking Member Blumenauer, and 
distinguished members of the committee Ways and Means, 
Subcommittee on Trade. Thank you for holding this hearing and 
for the opportunity to testify.
    I represent the Solidarity Center, the largest U.S.-based 
international worker rights organization, with programs in 
approximately 70 countries, including 20 African countries and 
Haiti.
    We partner with unions and the other labor organizations to 
help workers attain dignity on the job, justice in their 
communities, and greater equity in the global economy.
    Today I will highlight working conditions in Africa and 
Haiti, including examples of what unions are doing to promote 
worker rights in Kenya and Lesotho. I will then conclude with 
recommendations.
    The need to safeguard labor rights in Africa has never been 
greater. Africa has the fastest growing, youngest population of 
any continent and will be home to a quarter of the world's 
workforce by 2050.
    Annually between 8 million and 11 million young people 
enter the African labor market without a guarantee that they 
will find work, let alone decent jobs.
    The labor market in Africa is characterized by a wide 
income disparity between a small number of formal public and 
private employees and a vast informal economy.
    In Africa, 87 percent of the workforce is informal. Jobs in 
the informal economy have the potential to provide productive 
economic activity for a growing demographic, but the sector 
remains highly unregulated with insufficient legal protections 
for informal economy workers and notable violations of their 
rights.
    In Kenya, three trade unions representing Kenya's formal 
sector workers in food, health, education, and metals, signed 
MOUs with the formal worker associations in their respective 
sectors.
    This means that Kenya's trade unions have brought informal 
sector workers under the union umbrella. For the first time, 
this gives them access to legal frameworks that protects formal 
workers.
    According to the International Trade Union Confederation's 
Global Rights Index, 84 percent of countries in Africa denied 
workers access to justice; 40 percent arrested and detained 
workers; 93 percent violated the rights to collective 
bargaining, while workers in one out of five African countries 
experienced violence.
    For example, we lost a prominent human rights lawyer and 
trade unionist, Thulani Maseko, to violence, a devastating loss 
for workers across Africa.
    Despite the challenges facing workers in Africa, we have 
witnessed some progress. In Lesotho, three leading apparel 
brands and a major supplier of denim signed binding agreements 
with a coalition of labor unions and women rights 
organizations.
    Together they are addressing and preventing gender-based 
violence and harassment in garment factories through mandatory 
education and awareness trainings, and the establishment of an 
independent reporting and monitoring system with remedies, 
including termination for abusive behavior.
    The Solidarity Center is proud to have helped negotiate 
these agreements and to implement ongoing trainings for 
thousands of workers and managers.
    The progress we see in Africa is eclipsed by the turmoil 
and lawlessness in Haiti where the fragile climate has left 
garment workers unemployed and leaving in extreme precarity.
    Existing institutions have limited capacity to hold 
employers accountable for noncompliance with labor law. This 
has been a long-standing challenge for Haitian workers, a topic 
detailed in Solidarity Center's 2020 testimony before this 
subcommittee, covering consideration for the renewal of the 
Caribbean Basin Trade Partnership Act.
    Despite the present insecurity in Haiti, our experience 
implementing programs tells us that there will be a high risk 
of labor rights violations after the crisis abates.
    For that reason, it is critical that the U.S. pursues a 
worker-centric trade policy that advances sustainable economic 
development and protects--and promotes labor rights.
    In Haiti it should mean that regional supply chains produce 
and rely on decent jobs, and employers and policymakers are 
held to account when they break the rules.
    To achieve a worker-centric approach to trade, we have 
several recommendations: One, trade unions and work 
organizations must be fully included in all phases of 
negotiations through the design and implementation of trade 
policies and initiative;
    Two, the U.S. must prioritize worker-centered trade 
policies leveraging trade and trade preference programs to 
achieve enforcement of labor laws and to compel the 
establishment of binding mechanisms that meaningfully address 
rights violations;
    Three, U.S. development assistance policy should support 
the role of trade unions in advocating for labor rights in the 
context of trade, including with USAID missions;
    And lastly, the U.S. Government should prioritize and 
promote long-term stability in Haiti as a means to ensure 
economic recovery, a prerequisite for upholding labor rights.
    Thank you for the opportunity to share Solidarity Center's 
perspective. The Solidarity Center remains committed to 
centering workers and trade policy, and leveraging trade to 
advance labor rights.
    We appreciate the work of this subcommittee to uplift the 
voices of workers and unions worldwide. I look forward to your 
questions.
    [The statement of Ms. Muhika follows:]

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    Chairman SMITH. Thank you, Ms. Muhika.
    I now recognize Mr. Buchanan from Florida for his 
questions.
    Mr. BUCHANAN. Thank you, Mr. Chairman, I want to thank all 
of our witnesses. It is good timing for us to lead a delegation 
to Africa next week--or this Friday actually. So we are very 
excited about that, and these issues will be at the top of the 
burner, so to speak.
    I did want to go back, look at the big picture, Mr. Runde. 
You said that one-fifth is what, in terms of trade that we do, 
compared to the Chinese, with Africa. $282 billion the Chinese 
do, by numbers, $84 billion that we do.
    How do we close the gap? We say we need a new agreement, 
but we need a new and an improved agreement that helps these 
folks, a billion of them, in Africa, because obviously I think 
it is a new frontier, as you can see Mr. Richmond's story, and 
we really need to up our game.
    We talk a good game, but we don't deliver, and I--there is 
a lot of us in there. But don't sugar-coat it. Tell us how you 
really feel.
    Mr. RUNDE. Okay. I will try. Thank you. Thank you, 
Congressman. So I think we have--we have not updated our 
cassette tape on Africa. Africa suffers from a negative media 
coverage. There have been studies in ``The New York Times'' and 
others, it is just all negative. And so we have failed to see 
Africa as an opportunity.
    The Chinese Communist Party sees Africa as a win-win 
opportunity. Unfortunately, much of our partnership with Africa 
to date has been oriented around foreign assistance.
    I am all in favor of foreign assistance. I worked at AID, I 
wrote a book on American soft power, I am all for that. That 
has got to be one piece of a much bigger conversation.
    So we need an updated partnership. Getting AGOA passed, if 
we don't reauthorize, like--I think I made it clear, that not 
reauthorizing AGOA is a--there will be a party in Moscow, there 
will be a party in Beijing if we don't reauthorize it. So first 
we got to do that.
    I would like to see some updates. Then I think we need to 
think about a more ambitious trade agenda for Africa. I think 
it is fantastic that you and Chairman Smith are leading these 
delegations to Africa. I think it is very, very important.
    I think we need to see Africa as a win-win partnership. 
They have other partners today. In the year 2000, when AGOA was 
started, I don't believe China was the number 1 trading partner 
for any country in sub-Saharan Africa. Maybe, I don't know if 
it is 35, I don't know if it is 40--someone can tell me, but it 
is going to be a lot.
    Mr. BUCHANAN. Let me--I only got five minutes, so I want to 
ask, Mr. Richmond, let me ask you, one of the big advantages a 
lot of the Asian countries have had, is it basically free labor 
or very low-cost labor? How does that equate in Africa? Is 
everybody--does that make some sense there, or what happens 
with the labor component in Africa?
    Because that is obviously--maybe they are making three 
times what they made, but you are able to get a lot more 
competitive, but in a sense, it also hurts indirectly--might 
hurt the U.S. What are your thoughts?
    Mr. RICHMOND. The cost of labor and what people are making 
in China and Asia, you know, it has gone up a lot in recent 
years. You know, my view on that is that actually the money 
that we pay and when--and I, you know, I heard the comments the 
gentleman from Cintas made.
    I mean, we also have--we are paying--our lowest paid worker 
is making, you know, like, well more, like double of what the 
country's minimum wage is. You know, we offer a free catered 
lunch every day, free transportation, all of those things. It 
is meaningful.
    The labor cost in China and in Asia has gone up, but they 
are far more efficient and they are far more experienced. They 
have been doing this for, you know, decades.
    And the labor force in Ghana and most African countries 
need that training. They need those skills.
    Mr. BUCHANAN. Thank you.
    Mr. Nasser, let me ask you, did you say you were born in 
Kenya?
    Mr. NASSER. My mom was born in Kenya. My dad was born in 
Tanzania.
    Mr. BUCHANAN. Okay. Well, that is one of the areas we have 
been talking about for like four or five years, about a free 
trade agreement. That is something that clearly needs to get 
done. The momentum should start there.
    And the crazy thing is, I think it is very, very 
bipartisan. I can't understand why we can't be serious and get 
that done in a way, because that is part of the reason we are 
losing.
    To a guy that has been in business for a long time, when I 
got a sense of a good acquisition, I went and closed it. And we 
need to close the deal with that. What are your thoughts 
quickly?
    Mr. NASSER. I think that there are a lot of opportunities 
in Africa. The institutions that we have there are very 
flexible and very adaptable.
    I think the biggest challenge for us, when you think about 
the logistics of Africa, is the lead times, and the 
transportation and the carrying costs associated with that long 
duration.
    We look for business continuity in business resiliency, and 
we like to make sure that we are diverse--there is a lot of 
diversification. But I think we need to have a structure in 
place in Africa that makes it more palatable, from an 
investment perspective and from a timing perspective, to make 
sure that we invest more in Africa.
    Mr. BUCHANAN. Quickly, Mr. Runde, did you have anything you 
wanted to add in terms of a free trade agreement there?
    Mr. RUNDE. We should absolutely begin negotiations for a 
free trade agreement with Kenya.
    Mr. BUCHANAN. Thank you. I yield back.
    Chairman SMITH. Thank you. I now recognize Ranking Member 
Blumenauer.
    Mr. BLUMENAUER. Thank you, Mr. Chairman, and thank you all 
for being here.
    Ms. Muhika, you have a fascinating background in some of 
the more complex countries in this area. You point out in your 
testimony, both Haiti and sub-Saharan Africa struggle with high 
levels of informal employment.
    This increasing casualization of work can lead to rampant 
labor abuses and precarious income.
    Given the low level of government capacity and the highly 
informal nature of work across Africa, how can we best ensure 
that trade is a force for good that helps protect workers' 
rights and lift livelihood?
    I appreciate your focus on a worker-centric trade policy, 
and I wonder if you can elaborate on this.
    Ms. MUHIKA. Thank you for that important question. There 
are several ways that the United States Government should 
leverage trade policy and other laws to improve conditions of 
work for workers in informal sector.
    One of the most important approaches is improving 
conditions for workers in the informal sector, is to include 
them as stakeholders in discussions and negotiations about the 
development and implementation of any trade policies.
    Their voices are essential to having a worker-centered 
approach to trade.
    The U.S. Government should continue to invest in foreign 
assistance that strengthens government institutions and enables 
civil society to exercise fundamental labor rights.
    Technical assistance is vital to ensure that governments 
develop labor inspectorate regimes that establish effective 
social protection schemes for workers and that are engaged in 
labor diplomacy.
    All this to say that workers must be put at the center of 
any conversation on trade. Thank you.
    Mr. BLUMENAUER. Thank you.
    Any observations from your perspective about what we should 
be doing in Haiti, given the chaotic situation that is there, 
the long-term consequences of United States failure. Do any of 
you have some perspective on what we should be doing in that 
regard? Mr. Runde?
    Mr. RUNDE. Thank you, Congressman. I really hope that we 
can renew the Haiti-HELP Act this year. The best social program 
in the world is a job. Companies are already leaving as we 
speak.
    I really hope that the Congress can coalesce around one 
bill. Let's, I hope, let not the perfect be the enemy of the 
good on the Haiti-HELP Act.
    Mr. BLUMENAUER. Further observations? Mr. Nasser.
    Mr. NASSER. Yeah, I think the extension of Haiti-HELP for 
an additional 10 years is welcome, but it would be ideal if 
Congress at some point can consider something more permanent 
for us to establish more predictability in that region.
    Mr. BLUMENAUER. Thank you.
    Thank you very much, Mr. Chairman.
    Chairman SMITH. Thank you, Mr. Blumenauer.
    I now recognize Mr. LaHood from Illinois.
    Mr. LaHOOD. Thank you, Mr. Chairman. I want to thank the 
witnesses for your valuable testimony here today and adding to 
this conversation.
    I am really pleased that we are holding this hearing today 
regarding trade preference programs that of course are due to 
lapse in 2025, including AGOA and certain programs for imports 
from Haiti.
    Trade preference programs like AGOA and GSP serve as 
important mechanisms for the U.S. to encourage global economic 
growth and promote American goodwill and trade priorities 
abroad.
    We have heard a little bit this morning obviously about the 
competition that we have with China and Russia, and other 
adversaries, particularly in Africa.
    I also serve on our Select Committee on China and also on 
the Intelligence Committee. And as we think about, how do we 
win the strategic competition against the CCP and China, 
particularly in Africa, I think you do that on the economic 
front. So things like AGOA, things like engagement, need to be 
there.
    And I would say, as we compete against Belt and Road and a 
number of other initiatives from our adversaries, we need to 
highlight that what we focus and predicate our policies on, are 
competition, the rule of law, enforcement mechanisms, things 
that work.
    Sometimes it is very hard to compete against China and 
Russia and others because they don't play by the same sets of 
rules and standards that every other industrialized country in 
the world does, and that puts us at a disadvantage.
    So I just want to mention that as we think about how do we 
compete in this space.
    I also want to acknowledge Trade Subcommittee Chairman 
Adrian Smith for his leadership in advancing the renewal of 
these programs, particularly this bill to renew and update GSP, 
which was advanced out of the Ways and Means Committee in 
April.
    And I am committed to working with you, Chairman Smith, and 
our colleagues on the committee to get this legislation across 
the finish line. It is vitally important when we think about 
our economic diplomacy around the globe.
    In my view, it is crucial that the United States continue 
these programs as an effective countermeasure to the CCP and 
their efforts to replace the United States as a global economic 
leader.
    I will also mention, I serve as the co-chair of the Digital 
Trade Caucus, and I have been especially concerned about 
China's digital trade and domestic regulatory laws that promote 
surveillance, allow for worker and human rights violations, and 
run counter to our American ideals.
    Moreover, China is now exporting these principles through 
targeted initiatives like the Digital Silk Road, which is a 
series of developmental projects intended to build up 
countries' telecommunication networks, AI capabilities, e-
commerce, and mobile payment systems, and surveillance 
technologies. They are rampant throughout much of Africa and 
other Third World countries.
    It is my view that the United States needs to promote a 
strong agenda when it comes to digital trade and explore ways 
to modernize our trade programs, bringing them into the 21st 
century.
    Mr. Runde, I am going to start with you. In your written 
testimony, you highlight that the U.S. has failed to recognize 
Africa's growing digital economy, opening the door for China to 
capitalize on our absent guidance there.
    In your opinion, how can the United States regain its 
leadership in this space, and what steps can we make to ensure 
that we do not get in our own way again?
    Mr. RUNDE. Thank you, Congressman. We can't fight something 
with nothing, and so we need to have a new digital partnership 
with China. We ought to be investing in training and capacity-
building in Africa around digital issues. We should be 
supporting ICT policy development.
    We should also be incentivizing rip-and-replace. Seventy 
percent of 4G in Africa is Huawei. We do not want the digital 
rails of the future of Africa controlled by the unholy trinity 
of Huawei, Alipay, and ZTE.
    Mr. LaHOOD. Thank you for that. And with my remaining time, 
Mr. Runde, could you elaborate on what changes you think could 
be made to AGOA to better develop commercial partnerships and 
facilitate digital trade more effectively?
    If you can comment on that, and then I have a follow-up.
    Mr. RUNDE. Yeah. So I think--I suggest in my testimony that 
language could be included to develop a partnership around 
emerging international standards and reducing barriers to 
digital trade in Africa, including cross-border data flows and 
internet access.
    I think we ought to be thinking about using our foreign 
assistance and the DFC and the EXIM Bank as wrap-arounds to 
AGOA, and I think there could be language in the legislation 
that reflects that.
    Mr. LaHOOD. And as we think about that, if you look at the 
digital chapters that we put into USMCA as kind of a benchmark 
and a model, I mean, is that what we ought to be looking at in 
terms of a bilateral digital trade agreement with countries 
like Kenya and others?
    Mr. RUNDE. Yes. I think we should have a Kenya free trade 
agreement, and we should begin negotiations as soon as 
possible. And I would like to also see, yes, I would like to 
see--I think we should be working toward--I think the USMCA 
digital chapter is what we should be working towards.
    Mr. LaHOOD. Thank you.
    Thank you, Mr. Chair.
    Chairman SMITH. Thank you, Mr. LaHood.
    I now recognize Mr. Kildee from Michigan.
    Mr. KILDEE. Thank you, Mr. Chairman and Ranking Member 
Blumenauer also, for holding this really important hearing, and 
I agree with much of the sentiment that has been expressed, 
most particularly, Mr. Runde, you made the point that the U.S. 
presence is not nearly adequate for us to have any of our 
values manifest in the relationship that we have, nor any of 
our values manifest for the people of the African continent.
    It makes a difference where the investment comes from and 
where the relationships are built, and if we defer to our 
adversaries, we have no ability, really, to have a meaningful 
impact on the continent.
    I will be joining Mr. Buchanan on this delegation next 
week, so I very much look forward to exploring these issues 
much further.
    And I also agree that reauthorization of AGOA with, I 
think, significant improvements, is absolutely necessary for us 
to achieve the goals that we have been addressing.
    And I think in particular, it would be a mistake for us to 
reauthorize without using the opportunity to elevate these 
relationships, specifically--and this has been referenced--in 
the area of worker rights, where the USMCA example, I think, is 
actually a pretty good one.
    Not only do we have pretty significant professions but also 
an enforcement mechanism built in and some prerequisites, some 
pre-requirements, in order for the benefits to go into effect.
    I am curious, and I wonder if I could start with Ms. 
Muhika, if you could talk a little bit about some of the 
implementation strategies. I mean, it is already embedded in 
AGOA that there is a requirement to comply with internationally 
recognized worker rights provisions.
    But if you could address how these National Action Plans on 
business and human rights in several African countries, 
particularly Kenya, are being used to pursue implementation of 
what we already have agreed to pursue.
    Ms. MUHIKA. Thank you. I think it is too early to assess 
the impact of National Action Plans on business and human 
rights. For example, as you have stated, Kenya adopted its 
first NAPs in 2019, while Uganda in 2021, and several other 
countries are in the process of developing their own National 
Action Plans.
    The United States can support trade unions and workers to 
participate in the development of these plans in their 
countries, alongside other stakeholders from civil society 
organizations.
    Mr. KILDEE. Thank you. All right. I know it has been 
mentioned, specifically regarding Kenya, that the 
administration is pursuing an executive-level agreement. I 
agree with some of my colleagues that we ought to be pursuing a 
full bilateral trade agreement that has all of the necessary 
mechanisms for enforcement and implementation.
    But I wonder, Ms. Muhika, if you could comment 
specifically, I have been concerned that earlier this year, 
members of the Kenya Medical Practitioners, Pharmacists, and 
Dentists Union, including the General Secretary of that 
organization, were reportedly attacked for peaceably protesting 
some differences that they had with Kenya's healthcare system.
    What can we do, what can the U.S. do to prevent those sorts 
of practices, those sorts of attacks, including specific 
attacks on labor leaders, which has a chilling effect on 
advocacy on behalf of workers?
    Ms. MUHIKA. Thank you for that important question. I am a 
Kenyan citizen, and I only moved here to Washington, D.C. last 
6 months. So I totally understand your concern.
    And as it regards to the Kenyan doctors, where we saw a 
blatant attack on Kenya's Secretary-General of the Kenya 
Medical Practitioners and Dentists Union, Dr. Davji--and I must 
say that he is a personal friend of mine. Before I took on my 
current role, I was the country program director for the 
Solidarity Center based in Nairobi. So I did work alongside the 
doctors union in Kenya and many other unions for about 4 or 5 
years--I believe that the United States Government can play a 
critical role in preventing such attacks on workers and on 
labor leaders.
    First, the U.S. Government must continue to support 
mechanisms that can provide resources to human rights defenders 
under threat or in exile.
    In moments of acute crisis, we know our partners rely on 
our support from the--rely on support from the United States to 
enable them to access legal representation, relocation 
assistance, and medical services.
    Second, labor leaders under threat benefit from the United 
States public support. When senior United States Government 
officials meet with workers and labor leaders, when ambassadors 
invite labors leaders to the United States embassies, when 
elected representatives take time to connect with workers 
during overseas travel, like what you are doing next week, and 
as you have possibly done on many occasions, it affords them a 
profile that offers them protection, and it makes a difference 
to the workers personally.
    And I will conclude my interventions there. Thank you.
    Mr. KILDEE. I appreciate it. I wish I had more time because 
I would love to hear from the other panelists. Maybe some of 
you can comment as we pursue this.
    And, finally, before we depart for this delegation, if any 
of you have specific issues that you would like us to raise in 
the various places we will be visiting, please reach out to our 
offices. I would appreciate it very much. Thank you.
    Mr. RUNDE. What countries are you visiting?
    Mr. KILDEE. Kenya, Tanzania, Gambia, and Cabo Verde.
    Chairman SMITH. All right. Thank you.
    Next, I recognize Mr. Estes from Kansas.
    Mr. ESTES. Well, thank you, Mr. Chairman.
    And thank you to all of our witnesses for being here today.
    You know, as a representative from Kansas' 4th 
Congressional District, I am honored to represent many farmers 
and ranchers in Kansas. You know, agriculture is a major 
economic industry in my home state. Kansas is the number-one 
producer of wheat and sorghum and number-three producer in 
cattle and beef processor in the United States.
    Agriculture trade is a key way the Sunflower State connects 
with the rest of the world, including sub-Saharan Africa. In 
fact, in 2023, Kansas exported goods valued at $294 million to 
sub-Saharan Africa.
    Last fall, I visited Ethiopia and Rwanda to engage in and 
advance discussions on trade with the United States among 
several other items. In Kansas, wheat farmers recently returned 
from a trade mission to sub-Saharan Africa where they were 
seeking to bolster the relationship between the United States 
and the region in hopes of strengthening and expanding access 
to the international markets.
    Kansas ag producers benefit from open markets and free and 
fair trade, and, hopefully, the renewal of the African Growth 
and Opportunity Act, AGOA, will help expand market access. It 
is crucial that we have these conversations now so that we can 
renew AGOA before it lapses next September.
    Mr. Runde, in renewing AGOA, how can we assure fair market 
access commitments for U.S. agricultural products?
    Mr. RUNDE. Thank you, Congressman. I do think that--a 
couple of things. There has been some issues around pork and 
chicken, in particular in certain countries in Africa, 
specifically South Africa. I know a number of pork producers 
have expressed concern about that.
    AGOA has the ability to resolve--it has in it the 
resolution of bilateral trade disputes as one of the reasons by 
which they qualify for AGOA benefits. So if we have bilateral 
trade disputes in agriculture, we ought to be using AGOA 
qualification as saying, hey, you know, if you want to qualify, 
let's try and work this out.
    I also think--it certainly seems to me that AGOA has 
provisions, you know, to require that barriers to U.S. exports 
are eliminated, including unjustified sanitary and 
phytosanitary barriers. I also think that, if those don't work, 
we ought to think about WTO formal complaints, specifically in 
the case of, say, South Africa.
    And then, finally, I have heard some good things about 
supporting more support for some of the USDA farm agricultural 
export promotion programs. So I think all of those things would 
be things I would consider, Congressman.
    Mr. ESTES. Thank you. And, obviously, one of the key goals 
we have with AGOA is how do we move the AGOA countries from the 
preferential program to, quote-unquote, graduate and be part of 
stronger reciprocal trade agreements.
    Are countries ready to make this jump, and how can we get 
more countries to do that?
    Mr. RUNDE. Thank you, Congressman. I think that we need to 
fix the concept of graduation. In my testimony, I said 
countries like Mauritius are now middle-income countries, and 
you basically graduate to nothing, which is terrible. When this 
was originally envisioned 25 years ago, the idea was this was a 
halfway house until we could develop free trade agreements with 
bilateral countries or with regions the way we have with CAFTA-
DR and Latin America.
    I would hope, as I said in my testimony, that we would 
begin again to have bilateral free trade agreements in Africa. 
I think we should begin free trade agreement negotiations with 
Kenya immediately, and I also think we should be thinking about 
regional trade agreements with West, Southern, and East Africa. 
Thank you, Congressman.
    Mr. ESTES. Yeah. I mean, that is kind of--we kind of 
undercut a little bit of the value of AGOA without following up 
with those bilateral trade agreements once we are done. Yeah.
    As I mentioned earlier, one of the countries I visited last 
fall was Ethiopia, whose AGOA status was terminated in 2021 due 
to violations stemming from a civil war in the Tigray province 
or Tigray region. This has obviously jeopardized growth in 
investment in the region, and that followed the most recent 
AGOA renewal in 2015.
    Obviously, Ethiopia is part of the discussions that I had 
there as well as others. We would like to have that reinstated, 
and it is working to address those issues. Obviously, there 
were lots of concerns as you have rebel activity, and that 
happens scattered throughout the world.
    Given some of the heightened risk and instability, how do 
we make sure that we make countries recognize the value of 
being more participative? Are there ways we can strengthen AGOA 
to help with that certainty and help make it more attractive, 
Mr. Runde, for other countries to participate?
    Mr. RUNDE. So, in my testimony, I talked about that we 
ought to be--there are some improvements. I think that the 
Coons-Risch bill has some examples of some specific 
improvements around trade.
    I also think we ought to be looking at some specific 
initiatives around digital and mining, and we ought to use our 
foreign assistance in some ways to kind of be wraparounds to 
AGOA. Ethiopia is a really big country. We can't ignore it. We 
have often relied on it as sort of a security partner in that 
part of the world, and so I am hoping that we can get to a 
better place with Ethiopia at some point.
    Mr. ESTES. Yeah. Thank you. And free and fair trade is such 
an important part for the world. It has lifted more people out 
of poverty over the last 70 years, and we want to continue to 
have that.
    Mr. RUNDE. Trade in the private sector is what lifts people 
out of poverty. Foreign aid is a supporting actor in this, but 
the real actor is the private sector.
    Mr. ESTES. Right. Thank you.
    Mr. Chairman, I yield back.
    Chairman SMITH. Thank you, Mr. Estes.
    I now recognize Mr. Panetta from California.
    Mr. PANETTA. Thank you, Mr. Chairman.
    And gentlemen, ma'am, thank you for being here.
    Obviously, I am on the Ways and Means Committee, but I am 
also on the Armed Services Committee. So, obviously, trade is 
important, but security is important as well. And I haven't 
heard too much testimony about that today, and so I am going to 
talk about that a little bit.
    And yes, Mr. Runde, thank you for the thumbs up because you 
have got my first question.
    But before I get there, look, I think, obviously, we know 
and, as you have said, the 2025 expiration of AGOA comes as we 
begin an exit, though, from Niger and potentially Chad, at 
least militarily in our U.S. forces. We are seeing a 
deteriorating security environment all across the Sahel, an 
area that I have had help in calling a ``deja coup'' of an 
area, is what we are seeing.
    So I do believe it is critical to understand how offering 
market access to others in the region allows the U.S. to 
improve the livelihoods and create favorable conditions for new 
security partnerships. Access to U.S. markets is a tool that we 
can and should wield to advance development while supporting 
the ability of our African partners to hedge against security 
threats, including political instability and, yes, VEOs' 
violent extremism.
    I have been an advocate for more U.S. attention to the 
economy and security of sub-Saharan Africa, as I sit--as I 
mentioned, especially based on the committees that I am on. 
Some of the fastest growing economies in the world, as you have 
talked about, are located on the continent, and those same 
states are challenged, though--challenged, though, with porous 
borders, very weak governance, surges in violent extremist 
organizations, and an increased presence not just from China 
but Russia, as you mentioned as well, Mr. Runde.
    But securing the Sahel requires more than providing 
conventional military support. I think we can all agree with 
that. So we must support robust economies amongst our African 
partners to support good governance, prevent economic 
exploitation that threatens regional security, and enable 
greater influence from terrorist and extremist organizations.
    That said, I am curious to see how we can improve AGOA and 
similar programs, and I hope to hear more about how to expand 
upon these programs' successes and modernize them to reflect 
the changed security and economic realities.
    So, Mr. Runde, as you have heard and as you know, we got a 
withdrawal from--a military withdrawal from Chad, a military 
withdrawal from Niger. We saw it in Mali. We saw it in Burkina 
Faso. And we have seen a void that has been created and 
obviously being filled by our near peers' competition. And 
those types of voids, they significantly impact our 
counterterrorism efforts and regional surveillance capabilities 
as well in that area.
    As U.S. AFRICOM and the Department of Defense consider new 
security partnerships--which will be interesting to see how 
that develops--to backfill these strategic locations, we are 
also hearing concerns that some of these states may succumb to 
democratic backsliding, like we have seen pretty much all 
across the Sahel, as I mentioned.
    That said, you talked about improvements to AGOA. Let me 
ask you, do you think one of the improvements we could amend 
AGOA could be to enhance capability-building assistance and 
instill good governance?
    Mr. RUNDE. Thanks. The bad guys can fill voids today. So 
they are a near-peer, soft-power competitor, not just a near-
peer, hard-power competitor.
    China and Russia--so China is selling security for diamonds 
and gas, basically. Africa is going to go from 1.1 billion to 
something like 2.5 billion people. There will be more African 
citizens than citizens of China and India in 25 years.
    There is a whole series of--we are going to need hundreds 
of millions of jobs. Either we are going to have a demographic 
dividend in Africa or we are going to have something else. I 
want a demographic dividend.
    So absolutely. I think AGOA is one of the pillars of our 
partnership. We need a whole series of other things as 
wraparounds. So I agree with you, Congressman, the sorts of 
things that you are talking about.
    But I do think dictatorships partner with dictatorships. So 
the more members of the Star Wars bar of thug regimes, you 
know, they are going to partner up with Russia and China. And 
so I think we, you know, should want to enable better 
democratic governance not just because it is the right thing to 
do, but oftentimes, democracy--there was a book written many 
years ago called ``The Democracy Advantage'' about how 
democracies ultimately, over the long term, have better 
economic performance.
    So it is in our interest. We don't want these countries 
making nice with China because there they are going to have 
these ports. There is more than 20 ports basically controlled 
by China, and 70 percent of the digital rails of the future of 
Africa are controlled by Huawei. It is not a great situation 
for us, sir.
    Mr. PANETTA. Exactly. So China is bringing the economic 
investment, Russia is bringing the security investment, and 
that puts us on the sidelines.
    Mr. RUNDE. Right. And so to the extent that we step back, 
they can fill voids. This isn't 1995 anymore whether in the 
Taiwan Strait or in the Sahel.
    Mr. PANETTA. Exactly. Thank you. Thank you.
    Thanks to all of you.
    I yield back.
    Chairman SMITH. Thank you, Mr. Panetta.
    I now recognize Mrs. Miller from West Virginia.
    Mrs. MILLER. Thank you, Chairman Smith and Ranking Member 
Blumenauer, who I think is still here.
    Thank you all for being here today.
    The AGOA program has proven invaluable for economic growth 
of sub-Saharan countries empowering African women and increased 
opportunities for American producers, and it is vital that 
Congress commits to renewing and strengthening AGOA as soon as 
possible.
    As we begin negotiations for AGOA, it is equally important 
that we consider the broader goals of strengthening bilateral 
ties with countries around the world to counter China's malign 
influence. This committee has made great strides to do so 
through marking up critical legislation to reauthorize GSP, but 
we can still do better.
    It is imperative that we remain optimistic towards enacting 
free trade agreements with our allies, particularly Ecuador, as 
we work to renew GSP, AGOA, and the other crucial programs that 
we are discussing today.
    One important provision of both AGOA and the Haiti HOPE Act 
is the inclusion of apparel as an eligible product. Under AGOA, 
U.S. imports of apparel rose from $696 million in 2000 to $1.4 
billion in 2021. In Haiti, apparel industry exports account for 
nearly 90 percent of total exports. Importantly, Haitians have 
shown resilience despite the unrest in their country and are 
still showing up to work.
    Mr. Richmond, as an employer of 5,000 workers in a 
developing country, how have you witnessed the apparel industry 
lift citizens out of poverty, and what more can Congress do to 
help the growth of this industry?
    Mr. RICHMOND. Thank you. We have witnessed great things, 
and that is exactly why we started our business, is that we 
recognize the power for good that the apparel industry has.
    Again, everyone we hire--right--all 5,600--okay. Maybe not 
all--maybe 5,500 because some of those are accountants with 
specialized training. But, you know, the real factory workers, 
they have no experience. There is no educational requirement, 
right? Everyone comes in. Most of them have never had a formal 
job. Many don't have a bank account, right?
    So we hire them. We train them. They get opportunity, 
right? They have bank accounts. They are part of the Social 
Security program now with the government, right? They pay 
taxes. All of these things that make them productive, right?
    And they do make a wage that not only they can live on but 
they can--we have countless stories of women who joined us at 
one level and then have been promoted to supervisory or 
management positions and now are paying for their siblings or 
others to go to school and those sorts of things. I would be 
happy to send, you know, separately countless stories of those 
that we have.
    Mrs. MILLER. Well, do companies like yours need a strong 
sense of certainty of the American preference programs in order 
to commit to your investments in the region?
    Mr. RICHMOND. Absolutely. I mean, we do and so do so many 
others who are, you know, looking to grow this. Again, there 
are so many now brands. Everyone is looking to source from 
Africa, but there aren't enough qualified suppliers like 
ourselves. There needs to be more in order to incentivize the 
brands to place business there, right? And ultimately--yeah. 
Sorry.
    Mrs. MILLER. Yeah. That is okay.
    Mr. Runde, another area of particular concern for me is our 
reliance on China and Russia for critical minerals. I have 
introduced several pieces of legislation, including the End 
Chinese Dominance of Electric Vehicles in America Act, to close 
these loopholes and to counteract the leg up our adversaries 
have in this sector.
    I appreciated hearing from you that Africa houses 
substantial critical mineral deposits. How could inclusion of 
critical minerals in AGOA benefit American producers and 
consumers?
    Mr. RUNDE. Thank you, Congresswoman, and thank you for your 
leadership on the Ecuador Caucus as well.
    Look, if we are going to have a carbon transition, we 
better love mining to the tips of our toes. I was at AID for a 
long time, and I like AID a lot. I was in the international 
development business, and I worked at the World Bank Group. But 
asking my friends in the international development community to 
work on mining projects, they would rather get a root canal 
than work on mining projects. Most people don't want to work on 
mining projects.
    We need to spend a lot more foreign aid on minerals and 
mining. We need to make sure it is clean, that there is fair 
money, that people are getting a fair share of the resources, 
and that the people are treated well labor-wise.
    Mrs. MILLER. Okay. Quickly. Quickly.
    Mr. RUNDE. Yeah. Shoot.
    Mrs. MILLER. I want to ask you about the Chinese trade 
agreements in South America----
    Mr. RUNDE. Yeah.
    Mrs. MILLER [continuing]. And what an individual preference 
program for a country like Ecuador could mean for competing in 
the region and the possibility of a full free trade agreement.
    Mr. RUNDE. We absolutely should have a free trade agreement 
with Ecuador. I think the IDEA Act is okay, but I think if 
China has a free trade agreement with Ecuador, it is a lost 
opportunity for us. So if they are to join the Caribbean Basin 
Initiative, I think it is okay.
    I am in agreement that we should have a free trade 
agreement with Ecuador as soon as possible. We have a pro-
American President. There is going to be an election in Ecuador 
soon. They have been knocking on our door for a while. We ought 
to show up for our friends.
    Mrs. MILLER. Thank you so much.
    I yield back.
    Chairman SMITH. Thank you, Mrs. Miller.
    I now recognize Ms. DelBene from Washington state.
    Ms. DelBENE. Thank you, Mr. Chairman and Ranking Member 
Blumenauer, for holding this important meeting.
    And thank you to all of our witnesses for joining us and 
taking the time today.
    Like many of my colleagues, I believe that AGOA is a 
critical tool in the American foreign policy arsenal to promote 
development and create jobs in sub-Saharan Africa. It has also 
led to jobs and economic growth in Washington State. We are one 
of the most trade-dependent States in the country, and my 
friend and former colleague of Washington State, Congressman 
Jim McDermott, was one of the original authors of AGOA back in 
the early 2000s.
    So while AGOA has been transformational for certain African 
economies and certain sectors, there is so much more the U.S. 
should be doing to meet the economic needs on the continent, 
and if we succeed, American workers and our economic security 
and theirs will be better off, also.
    I know you were in mid-discussion on this. Mr. Runde, in 
your testimony, you recommend that Congress modernize AGOA by 
focusing on Africa's digital economy as well as critical 
minerals. I wanted to see if you could say a little bit more 
and discuss the benefits and challenges of allowing AGOA 
beneficiary countries, perhaps those that meet certain 
heightened labor and environmental criteria, access to American 
tax credits for EVs and batteries.
    Mr. RUNDE. Thanks. I have put a lot of time into trying to 
understand this issue.
    As I understand it, there are no countries in Africa today 
that currently make electric vehicles nor make electric 
batteries, so--and there are no tariffs on basic raw materials 
and materials today. So I understand the--so I am interested in 
finding ways for us to support mining and minerals in Africa.
    It is not--we need to be doing a lot more to--I think the 
minerals--the minerals security partnership, I think, is a--we 
should be doing a lot more in Africa around that.
    If we are going to have a line item in AGOA or some sort of 
language in AGOA specifically about a--for AGOA eligibility for 
the IRA, it is going to be for the future. As of right now, we 
would have to think about 3 to 5 or 7 years from now.
    So I think we should be doing a lot more with the minerals 
security--with the minerals strategic partnership--the security 
partnership, and we should be using a lot more of our foreign 
assistance both bilaterally and using the DFC. We need to be 
doing a lot more in flooding the zone on minerals with our soft 
power.
    Ms. DelBENE. Thank you. And I also wanted to ask you a 
little bit more--building off of Congressman LaHood's 
question--what we can do to help African entrepreneurs sell 
online--this is on the digital side--sell online or how we can 
help finance Africa's broadband build-out.
    Mr. RUNDE. Thank you. I do think we need a new partnership 
with Africa--a new digital partnership with Africa. I think 
that AGOA can call for that. I think we can have it call for 
that in the legislation. I do think there are a series of 
things we can be doing around supporting ICT policy 
development, training.
    I also think we ought to make available money for rip and 
replace of Huawei. 70 percent of the 4G in Africa is controlled 
by Huawei. I mean, this is crazy. I mean, we are not going to 
be--you know, this is very, very bad.
    I do think that, you know, the USMCA digital chapter, I 
think, is the gold standard, and we should work--we should all 
be--we should be--all of our trade agreements in the future 
should work towards the USMCA digital chapter.
    Ms. DelBENE. Or try to provide some type of digital--I 
mean, there is obviously doing full agreements. Folks have also 
looked at other ways to do digital, so----
    Mr. RUNDE. Yeah. I would love to see us have a bilateral 
free trade agreement with Kenya, and I would love us to go 
return to seeking free trade agreements in Africa.
    Ms. DelBENE. Are there other particular countries?
    Mr. RUNDE. Yes. Certainly, Kenya, I would start 
immediately.
    Ms. DelBENE. I think Kenya is there. I was wondering if 
there is anyone outside of Kenya that would be----
    Mr. RUNDE. We ought to think about potentially regional 
trade agreements along the lines of CAFTA-DR. I would say West 
Africa, East Africa, and Southern Africa. That would be the 
other thing I would do.
    Ms. DelBENE. Thank you.
    Thank you, Mr. Chairman, I yield back.
    Chairman SMITH. Thank you.
    I now recognize Mr. Arrington from Texas.
    Mr. ARRINGTON. Thank you, Mr. Chairman.
    Witnesses today, we appreciate your insights.
    I will be taking my first CODEL outside of my freshman trip 
to Israel to Africa this week to meet with leaders of several 
African nations, some of which are included in this trade 
partnership.
    I am not a trade expert, but my understanding is that the 
benefit to both parties and specifically to the United States 
for doing AGOA-like trade deals is to integrate supply chains 
with the U.S. and not China, to provide maybe cheaper inputs 
for manufacturers in the U.S. with products coming from, in 
this case, AGOA nations, and to develop that relationship so 
that, as it matures, as their market markets and economies 
mature, we can have this sort of more developed and more mature 
bilateral and reciprocal trade relationship where we are not 
only giving AGOA partners access to our markets with their 
goods, but they are opening their markets to the U.S. equally 
for our goods and services.
    In the case of agriculture, I hail from west Texas where we 
generate a lot of ag and energy products, and when I look at 
the data on the tariffs in Kenya on ag products like peanuts, 
sorghum, beef, and dairy, it is anywhere from 25 percent to 
over 50 percent. And those are just the tariff barriers, and 
there are non-tariff barriers that I won't enumerate. And then 
you look at Ghana's average ag tariff, which is 17.5 percent, 
Nigeria 15.9. Our average tariff in the United States is five 
percent.
    So, at some point, this needs to be a two-way street, a 
mutually beneficial relationship that has matured beyond just 
the initial investment in AGOA. We are 25 years now into this. 
I don't know. It seems to me we ought to be asking the 
question, why hasn't it developed further?
    I am all for AGOA, from what I understand of it, and that 
there have been benefits accrued to both sides of the deal, but 
we are 25 years into it, and we are still--we still don't have 
the reciprocity and the fair access that I think we should 
expect as American policymakers.
    So, I guess, Mr. Runde, I would ask you first, is that a 
fair characterization? Is that a realistic expectation 25 years 
later into this deal?
    Mr. RUNDE. Thank you, Congressman. I 100 percent agree with 
you. It has been 25 years. The world has changed. Africa has 
changed. We have changed. There are about 450,000 U.S. jobs 
linked to U.S.-Africa trade. So it is not totally a one-way 
street. And there is something like 1.3 million African jobs 
linked to--that is sustained by AGOA, but we have not met the 
full potential of AGOA by any stretch of the imagination.
    When it was set up, as I mentioned earlier, it was meant as 
sort of a halfway house for us to start building free trade 
partnerships with Africa. We are now starting to see several 
things happen in the last 25 years. We are now having countries 
becoming middle-income status like Mauritius. They are about to 
graduate--given the current rules, they could graduate to 
nothing because we were going to set up free trade agreements. 
Unfortunately, there has been a decrease in appetite of 
political will for us to pursue free trade agreements in the 
United States, and I regret that very much.
    And the other thing I would say that is different from 25 
years ago is China is eating our lunch----
    Mr. ARRINGTON. Eating our lunch.
    Mr. RUNDE [continuing]. On the continent.
    Mr. ARRINGTON. Yeah. Yeah. I get that sense, too. Somebody 
told me that, in the last couple of decades, they have doubled 
their trade and export to the African continent. Do you have 
better data on that?
    Mr. RUNDE. Yeah. So our trade with Africa is one-fifth the 
amount that China has with Africa.
    Mr. ARRINGTON. Well, and ours is going down and theirs is 
going up----
    Mr. RUNDE. Yeah.
    Mr. ARRINGTON [continuing]. At about the same rate.
    Mr. RUNDE. And they are probably the number-one trading 
partner for several dozen African countries when it was zero 25 
years ago.
    Mr. ARRINGTON. We need to be a lot more aggressive.
    Mr. Chairman, we have to have a higher expectation from our 
partners, and I hope we move forward in that way.
    Last question, Mr. Nasser, for you. We are the largest 
cotton patch in the world. A third of the cotton exported out 
of United States comes from a 100-mile radius of Lubbock, 
America, which is where I live. It is the largest population 
center in my district.
    And the rules of origin requirements are important in AGOA 
so that we are benefiting both countries and that--the textile 
supply chain is one that is benefiting us because it is 
including the AGOA nation raw cotton product and the United 
States.
    Is that being enforced as--if it is not adequately being 
enforced, how are people taking advantage of that, and how do 
we ensure that those provisions, and that one in particular, 
are being enforced so we are benefiting both countries in the 
fullness of the supply chain in cotton in particular?
    Mr. NASSER. Yeah. So I can speak from a macroeconomic 
perspective if it is being enforced. I can tell you that we 
adhere to the right standards and compliances within our supply 
chain.
    Mr. ARRINGTON. Okay.
    Thank you, Mr. Chairman. I yield back.
    Chairman SMITH. Thank you, Mr. Arrington.
    I now recognize Ms. Sanchez from California.
    Ms. SANCHEZ. Thank you. I want to thank the ranking member 
and the chairman for holding a hearing on this important issue.
    It is pretty clear that the U.S. can't simply focus on 
providing aid to emerging economies, whether it is sub-Saharan 
Africa or Haiti, to develop. Africa features some of the 
world's fastest growing economies and a booming young 
population, which creates the perfect environment for both 
American and African businesses to thrive if we can get this 
right.
    U.S. investments, market access, and economic incentives 
can fuel job creation. It can also boost local economies and 
help develop new innovative industries in those emerging 
economies.
    AGOA has created a generation of young women entrepreneurs 
and significantly improved women labor participation rates 
across Africa, which is a very good thing. So Congress should 
not let a program like this go without being renewed, like we 
did with PEPFAR, because these are programs that really do 
create great partnerships and create good outcomes.
    We have to show emerging economies that we can be a 
reliable economic partner, even though their, you know, 
economies are cyclical--they go up, they go down, people may 
experience turbulent economic times--but if we were to 
reauthorize AGOA in our trade preferences with Haiti, I think 
that that would garner a lot of good will, not to mention, as I 
said, the economic partnerships that can be created.
    Having said that, though, as many of my colleagues have 
said, we are all very much in favor of reauthorizing AGOA. We 
should take this opportunity to try to improve it, try to make 
some needed reforms to these programs, because just creating 
market access alone is not going to be enough to stimulate the 
economic development that we are looking to see in Africa. So I 
am hopeful that we can come to agreement on what we can do to 
update AGOA to make it a better agreement for both of us.
    We know that in some of the countries that we trade with, 
there are issues that still linger of gender-based violence, of 
hereditary and child slavery. We know that there are many 
places around the world and many partners that we trade with 
that continue to have issues with worker rights. And we know 
that this is, you know, not unique to Africa, certainly, but we 
do see that there are those ongoing problems that we need to 
address. And, you know, that is despite the fact that we do 
have a worker rights emphasis in the AGOA eligibility criteria.
    In Haiti, which has, you know, been very challenging, wage 
theft and worker exploitation issues have really harmed the 
Haitian population, and that has just further aggravated the 
poor economic conditions in that country. As I said, we have an 
opportunity to do better, and I think we must do better.
    My first question is for Ms. Muhika. An innovative labor 
agreement that has emerged from the AGOA garment sector is a 
multi-stakeholder agreement to stop gender-based violence in 
Lesotho. That binding agreement is the first instance in which 
apparel brands and their suppliers entered into enforceable 
agreements with workers, specifically to stop gender-based 
violence.
    In addition to expanding on the significance of that 
agreement, I would be interested to hear your thoughts on how 
the U.S. can use its trade policy to encourage agreements among 
producers, labor advocates, and civil society groups, 
specifically to address labor violations.
    Ms. MUHIKA. Thank you, Ms. Sanchez, for that important 
question. And I would like to reiterate that the Solidarity 
Center is proud to have supported the agreements that you are 
talking about in Lesotho.
    I think the U.S. development assistance policy should 
support the role of unions in advocating for labor rights in 
the context of trade, and this should include the USAID 
missions, you know, across the world, especially in sub-Saharan 
Africa.
    And then, lastly, the U.S. Government must prioritize 
worker-centered trade policies, leveraging trade agreements and 
trade preference programs to achieve enforceable labor laws and 
to compel the establishment of binding mechanisms that 
meaningfully address rights violations.
    All this to say that the U.S. Government has the 
opportunity to be a leader, to show that when you send our 
workers in labor policies or trade policies, you are doing the 
right thing. Thank you.
    Ms. SANCHEZ. Thank you.
    I have one more question. I am almost out of time, but I 
would accept the answer in writing after.
    Mr. Runde, in your written testimony, you recommended that 
Congress can consider including language on critical minerals 
in AGOA, and while I agree that the U.S. should look to new 
markets, I do have concerns that emerging economies that are 
rich in natural resources--like many of the countries in 
Africa--have been, in the past, subject to exploitation, 
including environmental and labor exploitation which actually 
undermines their development.
    So, my question for you--which I will take in writing 
after--is how can the U.S. work with African countries, 
including through our development financing tools, to create 
vertically integrated supply chains rather than just extracting 
the raw resources?
    And I thank the chairman for his indulgence, and I yield 
back.
    Chairman SMITH. Thank you.
    I now recognize Mr. Smucker from Pennsylvania.
    Mr. SMUCKER. Thank you, Chairman Smith, for convening 
today's important hearing.
    I do want to echo my colleagues' calls for an on-time 
renewal of AGOA. It is important that we prevent any lapse in 
the program to give certainty to the businesses that have 
invested in sub-Saharan Africa or plan to. They need to know 
that those incentives will remain in place.
    I also want to join my colleagues in expressing to the 
Biden administration that there is bipartisan support in 
Congress to deepen our trade relationship with Africa, and I 
urge the administration to resume dialogue on the U.S.-Kenya 
Free Trade Agreement.
    Mr. Runde, you know, we have discussed a lot--there have 
been a lot of people before me here. We have talked about areas 
of reform to strengthen the trade ties. We have talked 
expanding--from graduation policies, expanding agriculture 
access, reforms to grow the apparel sector. Anything else? Any 
other ideas that you have for reform that we should consider 
that haven't yet been raised today?
    Mr. RUNDE. Yeah. So I do think--certainly, a 10-year 
renewal or a 16-year renewal, as is in the Coons-Risch bill 
that is kind of mimicking the USMCA language.
    Mr. SMUCKER. Businesses want the long-term predictability?
    Mr. RUNDE. Yeah. I think that is good.
    I also think the current arrangement--there is, like, an 
annual review. It is pretty onerous. I think we could have 
reviewing the eligibility every 3 years instead of every 1 
year. I think that would be another simple thing we could do.
    So I think those are things that I think--I also think some 
of the proposals for giving a broader menu for the executive 
branch and not just having an on-off switch. I think those are 
all good things, Congressman.
    Mr. SMUCKER. Okay. Great.
    Critical mineral supply chains have been talked about as a 
critical issue for the country. We want to move some of that 
out of China. I know you have mentioned it, but how can AGOA 
help with that? How is that important?
    Mr. RUNDE. So, as I said, as of right now, there are no 
African countries making electric vehicles or making electric 
batteries, and there are no tariffs on--specifically on raw 
materials themselves or minerals.
    I do think, though, that we ought to be--we ought to be 
doing a lot more with Africa on minerals. There is the Mineral 
Security Partnership that we need to be--we should be engaging 
a lot more aggressively in Africa. I do think that we need to 
be putting a lot of our foreign assistance--a lot more of our 
foreign assistance and development finance resources on mining 
and minerals.
    I don't think the American people are going to accept 
switching from the internal combustion engine to electric 
vehicles and batteries controlled by the People's Republic of 
China. It just will stop.
    Mr. SMUCKER. Thank you.
    Mr. Richmond, your story is really fascinating. The apparel 
sector represents a logical area for AGOA partners to fill in 
the missing pieces so that fabrics cannot only be sourced 
domestically but also processed and transformed to a finished 
good all within the African continent.
    From your experience operating in Africa--you have talked 
about this already, but--you know, what are some of the things 
that would continue to allow the industry to flourish? What are 
some of the things that have held it back from doing that at 
this point?
    Mr. RICHMOND. Thank you for the question because then there 
are a few points that I have made notes about from some other 
things that I would also like to address.
    First of all, there was a question about investment timing, 
right? So, again, key to the apparel textile industry in Africa 
and under AGOA is building these textile mills, having those 
inputs available.
    I will give a real-world example of our own, right? We have 
already engaged with the IFC. We have gone through due 
diligence and everything to establish a new textile mill in 
Ghana--right--which would be a unique fabric that eliminates 99 
percent of the water use from traditional fabric in the way it 
is dyed, right? This is a somewhere from $15- to $20 million 
investment that we are interested in making.
    Mr. SMUCKER. Sure.
    Mr. RICHMOND. We can't do that today, right? We don't know 
if AGOA is going to be renewed.
    Mr. SMUCKER. Yeah.
    Mr. RICHMOND. So that is on hold. That is just us. We are 
just one small player.
    Mr. SMUCKER. That leads to sort of my next question, which 
is, you know, you have been planning and you have hired 
thousands of workers----
    Mr. RICHMOND. Yeah.
    Mr. SMUCKER [continuing]. Based on the idea that AGOA 
exists and will continue to exist, and I am sure now, as you 
are thinking ahead for the company, your strategic planning has 
to look very different and there has got to be a lot of 
questions there.
    Mr. RICHMOND. Yes. It does include--that is why we are 
interested in looking at doing our own mills--textile mill, and 
there are others, you know, in West Africa who are investing, 
you know, a couple hundred million dollars that we know of to 
build out that vertical cotton supply, right? That is key, and 
that is what is going to happen.
    But it also goes to, like, this utilization question about 
why, after 20, 25 years, hasn't there been more of an impact. I 
mean, I think we all know that, as a country, we have bought 
from China, right? For the last 20, 25 years, we were all--they 
made it very easy for us to buy from China. It is not easy to 
do business in Africa, right? But the Chinese made it very easy 
and made it very comfortable for all of the brands to just buy 
everything there.
    Now, of course, there is this tremendous focus on how can 
we source elsewhere, and now it is that investment that needs 
to happen. I think that, over the next 20 years, that if there 
is a long-term, you know, renewal of AGOA--I think 20 years 
from now, we will see a completely--it will be a completely 
different conversation than what is having today.
    Mr. SMUCKER. Well said. I am out of time, but thank you.
    Mr. RICHMOND. Thank you.
    Chairman SMITH. Thank you, Mr. Smucker.
    I now recognize Ms. Sewell from Alabama.
    Ms. SEWELL. Thank you, Mr. Chairman, and I want to thank 
you and the ranking member for having this hearing.
    I am a very strong supporter of AGOA, and I really 
appreciate our conversation today has heightened the fact that 
it is a bipartisan and bicameral support for renewal of AGOA.
    I, in recent months, have met directly with AGOA country 
leadership, civil society, and the business communities about 
the importance of AGOA but also what we can do to improve it. I 
most recently traveled with Chairman Jason Smith on a trade 
CODEL to Africa. We visited Benin. We visited Mauritius and 
Madagascar.
    And I can tell you that a lot of the countries were really 
nervous about reauthorization and were requesting it be 
reauthorized this year partly because of what you said, Mr. 
Richmond. Companies need to have assurances. You are placing 
bets on materials, supply chain, way into the future and want 
some assurances.
    I also know that reauthorization without trying to reform 
would be a missed opportunity. When I think about the kinds of 
reforms, I am thinking about smoothing out graduation 
requirements. I am talking about--you said something about the 
annual review process and making it either biannual or every 3 
years. Consider strengthening our labor and environmental 
standards for them as well as looking at strengthening 
enforcement generally.
    Having said all of that, I want to kind of go along the 
lines that my colleague, Linda Sanchez, did. I think it is a 
missed opportunity if we are not trying to build supply chains 
within Africa. Instead of just extracting minerals or 
extracting cotton, how about creating real supply chains?
    Mr. Runde, will you talk a little bit about that and how we 
can strengthen AGOA and actually strengthen the economic 
viability of Africa if we are not just extracting but we are 
rather helping to build?
    Mr. RUNDE. Thank you, Congresswoman, and thank you for your 
leadership on AGOA.
    So, I think, after COVID, when the People's Republic of 
China said they were going to cut off our pills and cut off our 
ventilators, that was grounds for a divorce. And I think it 
creates an opportunity for Africa, so--in terms of friend-
shoring, near-shoring, ally-shoring. So having AGOA as sort of 
a basic rules of the game is critical for that to happen.
    I do think that, as I mentioned in my testimony, I mean, 
Africa is a very different place than it was 25 years ago when 
this was enacted. They are more smart.
    Ms. SEWELL. And it will be even more different 25 years 
from now.
    Mr. RUNDE. Twenty five years--yeah. It is going to be--and 
so, you know, your trip, I am sure, made that clear. Mauritius 
was not a middle-income country 25 years ago----
    Ms. SEWELL. And now it is.
    Mr. RUNDE [continuing]. And now it is.
    Ms. SEWELL. And it is afraid to graduate.
    Mr. RUNDE. It is afraid to graduate because it graduates to 
nothing and loses it. So I am very much tracking your comments, 
Congresswoman.
    So I think all of the things that you have suggested, I 
think, make a ton of sense. I think we should--I think we need 
to pass AGOA, and then we need to think about a 21st century 
partnership with Africa. So I think we need to lift our sights 
and see--I mean, Africa has got a lot more partners. They don't 
have to wait around for us. They have got--there are two 
generations of successful entrepreneurs. You have met them.
    Ms. SEWELL. Absolutely.
    Mr. RUNDE. They would like to work with us, but we have got 
to show up.
    Ms. SEWELL. And also, with respect to bilateral agreements, 
I agree with you that we should be doing those.
    Can you talk a little bit about the benefits of bilateral 
agreements in addition to having these trade preference 
agreements in--trade preference programs with AGOA?
    Mr. RUNDE. Thank you, Congresswoman. So I think we ought to 
pursue a free trade agreement with Kenya. I think it would set 
a model for future agreements in Africa. We need to create a 
path towards bilateral and regional trade agreements with 
Africa. That was the vision 25 years ago by the folks who were 
on this dais 25 years ago. I think we should fulfill that 
vision.
    I think that it is a--so I think we should--you know, I 
think that if we get a free trade right with Kenya, also with 
the African--the AfCFTA, the regional agreement--like, the 
train is leaving the station.
    Ms. SEWELL. Those would be really great. I agree.
    Mr. Richmond, I was talking about supply chains and 
creating opportunities--direct opportunities for Africa to not 
just supply the cotton and then send it abroad to make the 
apparel. Can you add to that your thoughts on creating better 
supply chains in Africa?
    Mr. RICHMOND. Yeah. I mean, it is necessary, right? Like I 
said, there are--you know, I know in Benin and Togo, it has 
started already to do that. West Africa, obviously, has a 
tremendous amount of cotton, and it is a shame that, 
historically, it has been sent out and all the value has been 
extracted elsewhere and reimported.
    Ms. SEWELL. Exactly.
    Mr. RICHMOND. But, absolutely, that is what needs to 
happen.
    Ms. SEWELL. Well, Mr. Chairman, I know that people are 
anxious to get it reauthorized soon, soon, soon. I think we 
should really take our time to make sure that we are using this 
as an opportunity not just to reauthorize but to improve and to 
offer some really meaningful reforms for AGOA as well, 
obviously, with in mind to pass it in 2025. Thanks.
    Chairman SMITH. Thank you, Ms. Sewell.
    Now, I recognize Mrs. Fischbach from Minnesota.
    Mrs. FISCHBACH. Thank you, Mr. Chair, and I appreciate it.
    Thank you to all of you for being here. This is critical 
stuff.
    And I think it was Mr. Arrington mentioned agriculture and 
maybe even Mr. Estes had mentioned it, and I am from a heavy ag 
district, and so it is a critical export for us. And one of the 
things--I think that it was Mr. Estes that just kind of glanced 
on the pork issue. And it is a huge export. About 30 percent of 
the pork produced is exported.
    But my understanding is that, in South Africa, it--the U.S. 
pork exports only account for about 1.3 percent of the pork 
imported into South Africa. And it is not necessarily that they 
are not eating pork. It is some unscientific issues, trade 
barriers that are in line.
    And maybe, Mr. Runde, if you want to--you are nodding, so I 
am sure you have got something to add on that.
    Mr. RUNDE. So, first, I eat a lot of bacon, and so thank 
you--I want to thank the producers of your district for all 
that they are doing. So please pass that along.
    I think President Obama had similar concerns about pork in 
South Africa. And I do think that the pork manufacturers--the 
pork producers in the United States should be emphasizing the 
job losses in the United States to these unscientific, 
unjustified sanitary and phytosanitary barriers.
    And AGOA has, as I mentioned earlier--that part of it to 
qualify is the resolution of bilateral trade disputes. This is 
starting--in the Obama administration, it was seen as a 
bilateral trade dispute. So I do think that it certainly falls 
in that category.
    And then I also think AGOA has provisions to require that 
these barriers--these unjustified sanitary and phytosanitary 
barriers be addressed.
    And, finally, I think that--I would hope that the Biden 
administration might consider bringing this as a formal 
complaint to the WTO. So I understand your constituents' 
concerns, and I share them.
    Mrs. FISCHBACH. So USTR should be pursuing this?
    Mr. RUNDE. Absolutely, Congresswoman.
    Mrs. FISCHBACH. Okay. I appreciate that.
    Just kind of on another note, as we have been talking, you 
talk a lot about the free trade agreement, and, unfortunately--
and I will get--they are not pursuing them. The Biden 
administration is not pursuing them right now, and it is very 
disappointing not only for ag but for a lot of other industries 
that are not able to take advantage of those.
    As a matter of fact, I was in Ecuador with Chairman Jason 
Smith on a visit there, and we see China moving in, and we are 
not pursuing those free trade agreements. And so we are going 
to really lose out on a lot of what is going on.
    But you have something to add?
    Mr. RUNDE. Yeah. Thanks, Congresswoman.
    As I said earlier, our trade with Africa is one-fifth the 
trade activity with China. In Ecuador, we have had two--we have 
a pro-American President. There is going to be an election 
coming up. They had to sign a free trade agreement with China. 
They really would like to sign one with us. They have been 
knocking on our door. We are not showing up for them. I think 
the IDEA Act is okay as a halfway house. I would like us to 
have a full free trade agreement with Ecuador.
    So I agree with you, Congresswoman. And so I think part of 
it is we can't fight something with nothing, so what is our 
something?
    Mrs. FISCHBACH. Yeah. I absolutely agree. We really should 
be pursuing those.
    And maybe if anybody else has anything else to add about 
maybe ag trade? I mean, I would appreciate any kind of or any--
nope? Okay.
    Well, I will yield back, but I do appreciate you being 
here. And it is a huge concern for not only ag trade but free 
trade. Thanks.
    Chairman SMITH. Thank you, Mrs. Fischbach.
    I now recognize, from Virginia, Mr. Beyer.
    Mr. BEYER. Mr. Chairman, thank you very much.
    I thank all of you for being here.
    Mr. Runde, I want to follow up on your conversation with 
Congresswoman Sewell about reforming AGOA.
    Senator Coons and Senator Risch, in a bipartisan way, have 
proposed that countries maintain high-income status for a 
period of 5 consecutive years in order to graduate, and others 
have proposed graduating sectors once they reach certainly 
thresholds rather than graduating the entire country. You know, 
graduating this sector, hold that sector.
    How should we assess the merits of these proposals?
    Mr. RUNDE. Thank you, Congressman. So I think that the 
original concept of graduation was to imagine that they would 
graduate to free trade agreements. Unfortunately, we don't have 
free trade agreements.
    My suggestion would be is that we allow them to--African 
countries to stay even if they achieve middle-income status. So 
I think the current arrangement certainly isn't workable with 
Mauritius basically graduating to nothing and losing their 
status.
    So I would like us to raise our sights and return to an 
agenda of free trade agreements in Africa, whether it is Kenya 
and elsewhere. That was the original intent 25 years ago.
    So I think the Coons-Risch bill is excellent. I have a few 
quibbles with it, but I think--on that specific issue, I think 
it is--what I will argue for is to keep countries in until 
there is a time that we have free trade agreements with Africa.
    Mr. BEYER. Thank you. Mr. Runde, I am also curious about 
your thoughts on the frequency of AGOA country assessments. One 
of the criticisms we hear from the private sector is we have to 
do this every year. And there are proposals to do it every 2 
years, every 3 years. What would you think about decreasing the 
frequency, and would that incentivize firms to invest more in 
sub-Saharan Africa?
    Mr. RUNDE. So I think it is a great idea. I think it is 
burdensome to the countries, and I think it is a--I think every 
3 years, I think, would be an appropriate number, sir.
    Mr. BEYER. One last AGOA question. The binary nature of it. 
You are in or you are not. When countries fall out of 
compliance, we have no choice. I have talked to U.S. Trade Rep 
Katherine Tai a number of times about Ethiopia, you know, 
failing on a human rights thing and getting kicked out, 
regardless of the impact that it could have on the long-term 
stability laws, regardless of the impact of who it is affecting 
in the country.
    You suggest a menu of enforcement options: Warnings, 
probation periods, and the like. What are the advantages to 
this nonbinary approach?
    Mr. RUNDE. Thank you, Congressman. I think that the Coons-
Risch bill has a very good menu. I think AGOA is a trade 
mechanism, not a political mechanism.
    I am sorely tempted to find sticks against South Africa. I 
think what they are doing with China and Russia is obnoxious. I 
don't like how they are treating Israel. We can agree or 
disagree. But I just think that I find that the South African 
Government is--you know, has moved from being nonaligned to 
something else, and so I can understand the temptation to find 
a stick.
    I think we need a menu of options, whether it is informal 
warnings, probationary periods, and partial termination of 
benefits. Also, a lot of the sectors that are more pro-West, 
including agriculture and others, that are beneficiaries of 
AGOA and South Africa would be unduly punished for the actions 
of the South African Government if we were to use this as a 
stick.
    Mr. BEYER. Thank you.
    Ms. Muhika, you have this unique role as the program 
director for the Solidarity Center in Ethiopia and other East 
African countries, so like--probably unlike most of the panel, 
you come at this from a left-of-center perspective from a labor 
perspective.
    Can you give us any hope or any sense that there will be a 
world in which free trade agreements agree again? Clearly, the 
Biden administration has not been enthusiastic about it. We 
expect none in the remainder of the year. If in a, you know, 
different world, Ambassador Lighthizer comes back, again, there 
was no enthusiasm under his leadership for free trade 
agreements.
    When can the pro-free and fair trade advocates among us 
have some hope for free trade agreements again?
    Ms. MUHIKA. Thank you for that question. I would like to 
get back to you comprehensively in writing as I would not want 
to speak about free trade agreements right now. Thank you.
    Mr. BEYER. Well, in my 33 seconds, Mr. Runde, do you have 
an opinion?
    Mr. RUNDE. So I do think--I think all of our trade 
agreements starting with the GAD had a Great Power Competition 
push behind it. So I think there are geoeconomic--if I can use 
that term--geopolitical and geoeconomic drivers oftentimes 
behind our trade agreements, and I think--I fear that Great 
Power Competition with China is what is going to bring us back 
to the table on free trade agreements. So soon, it is going to 
be that.
    Mr. BEYER. Thank you.
    I yield back, Mr. Chair.
    Chairman SMITH. Thank you, Mr. Beyer.
    Next, Mr. Kustoff from Tennessee.
    Mr. KUSTOFF. Thank you, Mr. Chairman.
    And thank you to the witnesses for appearing today.
    Mr. Runde, if I could with you--and I know that my 
colleague asked about pork. Maybe if I could ask about poultry. 
I represent Tennessee's 8th Congressional District. It is a 
very heavy ag district. It exports about $2.2 billion worth of 
agriculture-related products.
    And so as it relates to poultry and maybe specifically 
South Africa, I know that South Africa has been applying 
prohibitive antidumping duties to U.S.-origin poultry since the 
year 2000. Over 20 years. Another factor that has resulted in 
low political activity is South Africa's decision probably to 
raise tariff duties on our products. Of course, there are other 
categories of U.S. poultry that does not have access to the 
market. We have talked about fair market access for our 
products. It is important, I think, to all of us, certainly to 
my district.
    Could you talk specifically, though, about South Africa's 
current trade restrictions on U.S. ag products, and how do 
these barriers impact U.S. farmers and U.S. producers?
    Mr. RUNDE. So I eat a lot of bacon and I also eat a lot of 
chicken, so I want to thank your constituents.
    But I also think poor people around the world rely on cows 
and they rely on chickens for their protein. And so I think we 
should enact pro-poor agricultural policies in the Global 
South. So we should be supporting animal husbandry as part of 
supporting food security in general.
    As I said earlier, the Obama administration had concerns 
about pork and I also believe poultry back in 2015 with South 
Africa. So this is not a new issue that we have. This is a pain 
point in our relationship with South Africa.
    As I said earlier, the resolution of bilateral trade 
disputes is part of AGOA eligibility, and AGOA has the 
provisions that require that barriers to U.S. exports be 
limiting, including unjustified sanitary and phytosanitary 
barriers.
    And I think there have been concerns about avian flu, but I 
also understand that there has been sort of major progress in 
that area in the United States in terms of our poultry. So I 
eat it every day with no concerns, so I would hope our friends 
in South Africa would do the same.
    I do think, Congressman--I think that we should be 
documenting job losses for the American poultry producers as 
part of this holdup, and I think we should be demonstrating 
that.
    And then, finally, I would hope that the Biden 
administration would consider even a formal WTO--a WTO formal 
complaint on this issue of poultry vis-`-vis South Africa, 
Congressman.
    Mr. KUSTOFF. Thank you, Mr. Runde.
    If I could, maybe in a different area--I know in your 
testimony, you said that the United States is not going to 
displace China on the continent or match it with the investment 
dollar for dollar, but we could compete in certain sectors. So 
what are the sectors you think that we could be competitive in?
    Mr. RUNDE. So I certainly think there are certain 
components in the digital space where I think that is the case. 
I certainly don't want--as China moves into whether it is--so I 
think--so digital is one. I would like us also to think whether 
it is healthcare, whether it is pharmaceuticals. I also think 
manufacturing. I also think, certainly, we are very competitive 
in agriculture.
    So I do think they also--given sort of these global shifts 
in supply chains, we want to offer ourselves and should offer 
ourselves as a partner with Africa to build this next level 
of--they don't want to just be in the extractive business. You 
know, it is not the continent of 25 years ago.
    To the extent that we have a positive, forward-looking 
agenda that speaks to their hopes and aspirations in terms of 
their economies, we should be seen as not just--I think China 
is seen as an extractive partner, and we need to be seen as an 
additive partner, Congressman.
    Mr. KUSTOFF. Thank you very much.
    Thank you, Mr. Chairman. I will yield back.
    Chairman SMITH. Thank you, Mr. Kustoff.
    I now recognize Mr. Schneider from Illinois.
    Mr. SCHNEIDER. Thank you, Mr. Chairman.
    I want to thank the witnesses for first sharing your 
insights and perspective--this has been very helpful--but also 
your patience as we work our way through the day.
    I want to thank the chair and committee for calling this 
hearing today. Africa and Haiti are crucial to U.S. interests, 
and I am going to touch a little bit on each.
    As a member of--in fact, the only member of both the House 
Committee on Ways and Means and the House Foreign Affairs 
Committee, I am proud that so much of our work is dedicated to 
America's global leadership around the world. I often say that 
the U.S. is at its best when we lead--when we lead with our 
friends and allies, not just looking at the bottom line, but 
looking at our strategic interests broadly in a way that is 
shared with our allies and reflecting the moral clarity of our 
values-based vision for the future.
    Of course, there is much strategically to be gained from 
working with African countries and allies in Africa. It is the 
young population in some of the world's fastest growing 
economies, as was noted today. But more than that, it is 
crucial that African countries as friends and partners to the 
U.S.--we recognize them as such and that we work together 
towards a world that is more just, fair, and sustainable.
    As was said earlier--my colleague Terri Sewell mentioned 
it. Mr. Runde, you touched on it. We need to work to 
reauthorize, but not just reauthorize, but to enhance and 
improve AGOA, and I look forward to working on this committee 
to doing that.
    I want to focus most of my--or all of my questions on 
Haiti. Abraham Lincoln, our greatest President--and I will note 
proudly a fellow Illinoian--was the first U.S. President to 
recognize Haiti. Since then, the relationship has been complex 
but always crucial, whether geopolitically or through the 
strong ties between the diaspora and the island.
    Today, Haiti is facing one of its greatest challenges since 
independence. We are witnessing a near collapse of the state, 
and I hope the Republicans on the House Foreign Affairs 
Committee and the Senate Foreign Relations Committee will come 
to unblock the crucial funds to help restore calm.
    As the administration works with our allies, especially 
Kenya, to stabilize the situation in Haiti, we must also think 
about the future. We must do everything in our power to ensure 
that the future of Haiti is not just a recovery but includes 
prosperity and security and that our private sector is able, 
willing, and committed to investing to lift up the Haitian 
people.
    So let me ask Ms. Muhika and Mr. Runde, what can we in 
Congress do to best help Haiti going forward? The surge in 
foreign direct investment that followed HOPE I, HOPE II, and 
HELP in the early part of this century is something this body 
can and should be proud of. As Secretary Blinken recently 
noted, HOPE/HELP is a vital program.
    And as you talk, can you--well, I will leave the question 
there for now.
    Ms. MUHIKA. Thank you, Mr. Schneider. Unfortunately, I am 
not an expert on Haiti, but the Solidarity Center's Haiti team 
is happy to get back to you comprehensively in writing.
    Mr. SCHNEIDER. Mr. Runde, any thoughts?
    Mr. RUNDE. So the best social program in the world is a 
job, and I would hope that we renew this year the Haiti HOPE 
Act. I think we have talked about making adjustments to AGOA, 
and so that may be a little bit more complicated.
    I would ask, in all humility, that the Congress coalesce 
around one bill. I know there is multiple bills. There is a 
number of folks who have they care about Haiti.
    The best thing we could do is coalesce around one bill, 
even potentially even get to unanimous consent around one bill. 
I think companies are leaving now.
    I believe it is the seventh largest source of undocumented 
people crossing our border, the Southern Border, are from 
Haiti. We are going to have more people--if we don't have jobs, 
we are going to have all sorts of bad things happen.
    Of course there needs to be a political settlement in 
Haiti. Of course there needs to be some sort of security 
arrangement. I know that there has been, you know--so it is a--
but we have to start with getting this renewed.
    Mr. SCHNEIDER. I hear you and one I will note, and maybe 
you have thoughts on this, but our colleague, Stacey Plaskett, 
has the HOPE for Asian Prosperity Act of 2023.
    Do you have any thoughts on what that could do or--well, we 
can bring that up in a later conversation.
    Mr. RUNDE. I have a opinions on a lot many things, 
Congressman. I don't have a view on the different--there is at 
least three different bills, if I understand it, sir, and maybe 
a fourth. All I would ask is that Congress, in its wisdom, 
coalesce around one bill, sir.
    Mr. SCHNEIDER. I hear you, I concur, and we need to do more 
to help Haiti in a very difficult moment.
    And with that, I yield back.
    Mr. BUCHANAN. Thank you, Mr. Schneider, I now recognize Ms. 
Moore from Wisconsin.
    Ms. MOORE. Thank you, Mr. Chair, for allowing me to wave on 
this subcommittee, and I want to thank the witnesses for a 
tremendous education here this afternoon. I have questions for 
all of you. So many questions, so little time, so bear with me.
    Ms. Muhika, I am going to ask you this question, and I may 
ask others it too. What in your opinion or your research has 
prevented really good vertical integration within the African 
continent to make them more productive?
    I mean, you got a lot of cotton there, but then they have 
to send the cotton off to Asia to get it processed, and I think 
one of our witnesses talked about the different colors--Mr. 
Richmond.
    What could AGOA do, in your opinion, to promote vertical 
integration?
    Ms. MUHIKA. Thank you for that question. Please allow us to 
get back to you in writing.
    Ms. MOORE. Okay. How about you, should I ask Mr. Richmond, 
Mr. Runde, who wants to volunteer?
    Mr. RICHMOND. Sure. I will go ahead. Thank you.
    Ms. MOORE. Okay.
    Mr. RICHMOND. It takes investment in terms of investment 
dollars and expertise. Right? Building that out, it is not 
rocket science, right, but it does take a lot of money, in 
terms of equipment, it takes expertise, bringing--you know, we 
have, I mentioned, 5,600 people working for us, so we have a 
hundred ex-pats that we have brought from Sri Lanka and 
Bangladesh and Philippines and all over, to transfer that 
knowledge, right?
    Just like China wasn't China 20, 30, 40 years ago. They had 
to learn, so.
    Ms. MOORE. So, Mr. Nasser, let me ask you, Mr. Nasser, 
really quick, Kenya, we are about to go to Kenya in a couple 
days, and I know that they are recipients of AGOA, but they 
may, quote/unquote, graduate.
    What do you think would be the consequences of them 
graduating at this time in their development?
    Mr. NASSER. Thanks for the question, Congresswoman Moore. 
We have a small supply chain in Kenya. It is about 5 percent of 
our imports. I am not sure or familiar with the specifics of a 
graduation program for them, so I can't comment.
    Ms. MOORE. You know, because people have commented--okay, 
Mr. Runde, come on, help us out here.
    Mr. RUNDE. Thank you, Congresswoman. I am a Packers fan, so 
it----
    Ms. MOORE. All right. See, I knew that.
    Mr. RUNDE. That is good. So graduation, look, 
Congresswoman, I think it is a--would be a terrible thing for--
whether it is Mauritius and other countries in Africa, as I 
said earlier, AGOA was set up as a halfway house to move 
towards free trade agreements.
    I hope we can restart dialogue about a free trade agreement 
with Kenya. So having a country become middle income and then 
graduate from AGOA to nothing is a disaster.
    I would suggest that we keep all the countries in AGOA 
until such time as we have free trade--work towards free trade 
agreements, Congresswoman.
    Ms. MOORE. Okay. Now, Mr. Runde, while I have got you here, 
you had an interesting discourse with the gentle lady from West 
Virginia about minerals. And you said something, like, oh boy, 
people would hate going into mining. Then you went on to talk 
about how we need to really lean into that.
    Can you really clarify for me, because I am very interested 
in the exploitation, and I guess, you know, Ms. Muhika would 
agree with that, that a lot of the exploitation that occurs in 
this sector, and as we move into needing these critical 
minerals, can you clarify for me what you mean?
    Mr. RUNDE. Yes, Congresswoman, what I was trying to say is 
that we need minerals, and we are going to need a lot more 
minerals in the future. I believe that the American people are 
not going to want to transfer--you know, moving from the 
internal combustion engine to electric vehicles and electric 
batteries if they are controlled by the Chinese Communist 
Party.
    I also believe that----
    Ms. MOORE. So is this a space where AGOA could skip in 
and----
    Mr. RUNDE. I think so. I mean, I think we--what I would say 
is that we need to be supporting clean, fair, equitable 
activities in mining and minerals. We need to raise standards. 
There are many fine mining companies around the world, many of 
them U.S. companies, British companies, Australian companies. I 
think it is----
    Ms. MOORE. And they could benefit as well?
    Mr. RUNDE. Yeah, absolutely, they----
    Ms. MOORE. I only have 30 seconds left. I am sorry to cut 
you off, but I have to really ask Ms. Muhika a question again. 
I was on an airplane, and some woman squeezed herself into a 
middle seat because that is all that was left there, and I 
really got depressed by the time I was finished talking to her, 
because she works for an international environmental 
organization, and she says that it is--everybody in the 
development world knows that as soon as you go in and start 
helping women and empowering women and lifting women up, people 
in the community who are most likely to use that money to spend 
it on uplifting the family, that the instance you do that, 
domestic violence skyrockets.
    I was so depressed after I got off the plane, sitting next 
to her. Can you tell me, what, if anything, you propose in the 
way of programming to alleviate this outcome?
    Ms. MUHIKA. Thank you for that question, and I do not think 
I agree with that analogy, but----
    Ms. MOORE. Okay.
    Ms. MUHIKA [continuing]. We know that labor rights, or 
labor in general, is an intersectional issue. For example, 
women rights are critical to upholding labor rights. Policies 
that hold back women, governments that do not appoint women to 
leadership positions, and employers who do not maintain a safe 
workplace free from gender-based violence, are stifling up the 
advancement of labor rights in general.
    So my only response would be that we cannot stop supporting 
the advancement of women just because of a different----
    Ms. MOORE. I think I saw you shaking your head or doing 
something, Mr. Runde. Any thoughts on that?
    Oh, you Mr. Richmond?
    Mr. RICHMOND. Sure. I mean, I will just say, I mean, again, 
as, you know, we employ 76 percent women. In fact, our local 
partner in Ghana is a Ghanaian woman.
    The studies I have seen show that, you know, when women 
bring home money, that it is more likely to go towards 
supporting the family and the things it should go to than 
otherwise. So I mean, we are big believers in providing those 
opportunities.
    Ms. MOORE. All right. Thank you.
    Mr. Chairman, Mr. Ranking Member, thank you for your 
indulgence. Thank you for having this hearing. Thank you for 
letting me wave on, and I yield back.
    Chairman SMITH. Thank you, Ms. Moore. I certainly thank you 
to all my colleagues. I deferred on my questions, but I 
certainly appreciate the participation here today.
    It has been robust with just about a hundred percent 
participation of all subcommittee members. I think it speaks to 
the fact that for what we need right now in the world, Africa 
offers many, many solutions, offers examples of what the right 
thing to do is, unassociated with a commercial name obviously, 
but I think that this opportunity gives us a chance to analyze 
where we have been, where we need to go.
    So let me just say, Mr. Runde, you have touched a bit on 
some concerns about South Africa. And make no mistake, they 
enjoy vast benefits from AGOA, and yet I think they are 
undermining our foreign policy--their partnership with Mr. 
Putin and attacking Israel through the International Court of 
Justice. These are concerning issues.
    Intellectual property protections are lacking, and let me 
add that they are attempting also to expropriate American IP 
through the TRIPS Waiver Process, again, I think, undermining 
our interests, even when our interests are helping the world.
    And so I am very, very concerned about that, and I think 
this is an opportunity for us to look further in modernizing 
how we handle AGOA moving forward.
    You know, there is enthusiasm to make necessary changes, to 
kind of lift our expectations, but I too was with the 
colleagues around Africa a few weeks back where we have seen 
great examples of what is working, whether it was in Mauritius 
or Benin, other places.
    So let's see more of that, but also let's not have our 
trading partners, who are doing the right thing all along the 
way and utilizing AGOA, and then have nowhere else to go. I 
mean, it is hard to even call it graduation when it is a dead 
end.
    And we owe ultimately the American people better policy 
through this effort, and so I would hope that we could dig and 
dig deeper.
    I hear the comments here and, I think, an appetite for a 
trade agreement with Kenya. I am beginning to wonder that the 
only people opposed to a trade agreement with Kenya happen to 
be at the White House. How unfortunate.
    Because as I engage with colleagues here in the legislative 
branch, there is this appetite and enthusiasm to get going 
here, let's get things done. And this is bipartisan, certainly 
on the heels of USMCA that has been bipartisan as well.
    So, Mr. Runde, can you perhaps examine further, you said 
that a complaint filed through the WTO on South Africa would be 
in order. Would you like to elaborate, or could you elaborate 
on that a bit?
    Mr. RUNDE. I would just say that I understand the 
temptation to use AGOA as a stick, but I am trying to resist 
the temptation. They have been a bad actor. They are 
undermining American policy on a number of fronts, but I do 
think we have had to work at our relationship with South 
Africa.
    And so as I said earlier, the Obama administration had 
similar concerns on certain agricultural products, and I 
believe they found ways to work with them.
    So I think we have a fabulous ambassador in Ambassador 
Reuben Brigety. I think he represents us very, very well. I am 
a great admirer of his.
    And so I know that he has a very difficult job there, but I 
do think that some of it needs to be behind closed doors. Some 
of it needs to be through calling attention to it through 
Congress, and then I think to the extent that we can use 
actions, whether through having a dialogue through the AGOA 
process but also through the WTO, I think these are all things 
that we ought to be looking at, Mr. Chairman.
    Chairman SMITH. Thank you. Now, on Kenya, do you have any 
numbers, by chance, in terms of what they are already 
benefitting from and perhaps how we could benefit more through 
a bilateral trade agreement that there is so much support for?
    Mr. RUNDE. I don't, sir. But what I will do is, I will come 
back to you with some brief thoughts in writing for the record.
    Chairman SMITH. Okay. I appreciate that.
    Mr. RUNDE. I will do some homework, Chairman.
    Chairman SMITH. I appreciate that. I know that we have been 
told repeatedly from the administration that they are not 
leading on any trade agreements because they don't have the 
votes. I would challenge that assertion based on the discussion 
we have had here today and other engagements I have had, both 
sides of the aisle, in terms of what we should be doing, like 
with Kenya.
    The fact is that the Trump administration teed up a trade 
agreement with Kenya and that the current administration is 
unwinding it, stepping back from it, and yet having a 
discussion as long as it doesn't involve tariffs.
    You know, certainly other colleagues have touched on other 
barriers, non-tariff trade barriers, again back to South 
Africa, but, wow, there is just so much opportunity, 
opportunity for, I would hope, South Africa to improve where 
they stand with our country right now, but that is also exactly 
what we need.
    Our challenges now with China can be resolved with building 
relationships. As Mr. Richmond has pointed out, there are great 
opportunities there.
    And, Mr. Richmond, anything you would like to add to 
previous comments?
    Mr. RICHMOND. Well, I mean, if you would indulge me, I 
would like to actually ask a very naive question.
    Chairman SMITH. Okay. Go ahead.
    Mr. RICHMOND. And that is, I have heard everybody say that 
they are in favor of renewal, reauthorization of AGOA, but--
but--want to take the opportunity to make improvements, and it 
is a--you know, it is a one-sided, right, it is a unilateral 
agreement, right?
    So I guess what I am--one of my naive questions is, what 
prevents you from reauthorizing it as is to give the certainty 
to investors and yet still work on all of the improvements you 
want and enacting those when you have agreed to those? So that 
it provided that stability but still the opportunity, like, 
that is the part I guess I am naive about.
    Chairman SMITH. Well, you raise the concerns about 
predictability and stability. I think that is very important, 
and just as a gauge, and as we have discussions and I get 
various points of input from colleagues and stakeholders, the 
urgency to renew it is very present.
    So I think that, you know, looking at it--there are also 
the expectations, though, that along with that urgency, we need 
to deal with some of these things such as the dead end of so-
called graduation. We are going to have to deal with that.
    Now, that won't all be resolved, in my opinion. When we 
know we need a trade agreement, say, with Kenya, a bilateral 
trade agreement with Kenya, comprehensive, and it will take 
Mauritius, a great example of what we set out to accomplish, 
they are doing the right thing, what is next?
    You know, we won't resolve all of that in a renewal in my 
opinion, but I think that we need to really examine and put 
pressure on the administration, for example, to show some 
leadership where the executive branch is most appropriate to 
lead in these areas. I cannot emphasize that enough.
    So whether it is agriculture that we have heard about, 
textiles, adding value, the opportunities are many to make some 
corrections but also build what can be, I think, a very bright 
future, especially with the fastest growing continent in terms 
of population and just so many opportunities.
    So with that, again, thank you to our witnesses for joining 
us here today. Please be advised that members have two weeks to 
submit written questions to be answered later in writing. Those 
questions and your answers will be made part of the formal 
hearing record.
    With that, this subcommittee stands adjourned. Thank you 
again.
    [Whereupon, at 3:35 p.m., the subcommittee was adjourned.]

      

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