The U.S. International Trade Commission (ITC) today released U.S.-Africa Trade Flows and Effects of the Uruguay Round Trade Agreements and U.S. Trade and Development Policy, the fourth of five annual reports that will assist the President in developing a comprehensive trade and development policy for the countries of Africa, as required by the Uruguay Round Agreements implementing legislation.

The ITC, an independent, nonpartisan, factfinding federal agency, was requested to conduct the investigation by the United States Trade Representative (USTR) under the Africa Policy Section of the Statement of Administrative Action that Congress approved with the Uruguay Round Agreements Act.

As requested by USTR, the ITC's study is limited to the 48 countries of Sub-Saharan Africa. The current report provides an update for 1997 on U.S.-Africa trade and investment flows in major sectors; an identification of major developments in the World Trade Organization (WTO) and in U.S. trade and economic policy and commercial activities that significantly affect bilateral trade and investment with the region; information on changing trade and economic activities within individual countries; and an update on progress in regional integration in Africa. Following are some highlights of the report:

• Sub-Saharan Africa accounted for about 1 percent of U.S. merchandise exports and 2 percent of U.S. merchandise imports in 1997. U.S. merchandise exports to Sub- Saharan Africa totaled $6.1 billion in 1997, up only slightly from $6 billion in 1996. The U.S. merchandise trade deficit with Sub-Saharan Africa rose 9 percent to $9.9 billion.

• Transportation equipment, agricultural products, machinery, electronic products, and chemicals were the largest U.S. merchandise export sectors with respect to Sub-Saharan Africa in 1997. These five sectors accounted for 78 percent of the value of U.S. merchandise exports to the region in 1997.

• Imports entering duty-free under the U.S. Generalized System of Preferences (GSP) rose from $588.2 million in 1996 to $1.4 billion in 1997, an increase of 134 percent. These imports rose to 8.6 percent by value of total U.S. imports from the region in 1997, more than double that of the 1996 share.

• The Sub-Saharan countries accounted for 8.9 percent of all U.S. GSP imports in 1997. Because of changes to the GSP program for least-developed beneficiary developing countries that allowed products from Angola's energy sector to qualify for GSP preferences, Angola became in 1997 the largest Sub-Saharan African supplier under the GSP program. South Africa was the second-ranking supplier under the program.

• U.S. gross direct investment flows to Sub-Saharan Africa more than quadrupled in 1997 to $3.8 billion. Yet, U.S. investment to the region amounted to only about 3.3 percent of total U.S. direct investment abroad in 1997. U.S. companies invested primarily in petroleum in Nigeria and Angola. South Africa hosted $1.4 billion of U.S. direct investment, or 28.6 percent of the total.

• Subregional trade and economic integration has been difficult in the region. Ambitious goals have been hampered by political and economic instability, as well as conflicting interests among the leading regional institutions. It is unlikely that most proposed target dates for free trade agreements and economic and monetary unions will be met. Common problems among the six regional groups profiled in this report have involved delays in ratifying treaty protocols by member governments and shortages of operating funds.

• Financial activity in Sub-Saharan Africa by international organizations generally increased in 1997 although World Bank lending commitments to the region declined from $2.7 billion in 1996 to $1.7 billion in 1997. Guarantees by the Multilateral Investment Guarantee Agency increased from approximately $65 million in fiscal year 1996 to $70 million in 1997. The International Finance Corporation approved $384 million in financing for 72 projects in Sub-Saharan Africa in fiscal year 1997, compared to $190 million in 1996.

• In 1997, several Sub-Saharan African countries continued to increase their efforts to avail themselves of WTO and other programs aimed at improving their trade performance. Maritime transport services appeared to be the negotiations of greatest interest to West and Central Africa, and are likely to be so again when these negotiations resume in 2000.

The foregoing information is from the ITC report U.S.-Africa Trade Flows and Effects of the Uruguay Round Trade Agreements and U.S. Trade and Development Policy (Investigation No. 332-362, USITC Publication 3139, October 1998). The report will be available on the ITC's Internet server at www.usitc.gov. A printed copy may be requested by calling 202-205-1809 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC. 20436. Requests may also be faxed to 202-205-2104.