TRALAC - Trade Law Centre

Ivory Coast set to forge partnerships with local firms

Thursday, 30 May 2002

Source: Business Report

Johannesburg - The Ivory Coast was poised to forge business partnerships with South African firms after being granted Africa Growth and Opportunity Act (Agoa) eligibility last week, Guy M'Bengue, the chief executive of Apexi-CI, the country's export association, said yesterday.

In South Africa for the Cote d'Ivoire Week from May 29 to June 2, M'Bengue said Agoa was a "new frontier for the economy" and Ivory Coast's objective was to boost its exports of value-added products by attracting foreign investment and forming mutually beneficial alliances with other African countries.

Agoa is a limited preferential trade agreement that enables eligible African countries to export duty and quota free into the US.

Key to its first trade mission to South Africa since 1998 is Ivory Coast's mission to supply textiles to local clothing manufacturers exporting to

the US as textiles do not qualify under Agoa.

Apparel manufacturers in South Africa are limited in the size of orders they can accept from the US because of a severe shortage of local textile manufacturing capacity.

However, for Ivory Coast to be able to help meet this demand, its textile manufacturing capacity will have to expand significantly, as there are only about 10 players in the market.

M'Bengue said the country's 300 000 tons a year production capacity was expected to increase by 30 percent over the next year.

Ivory Coast has a robust cotton industry, with 70 percent of its crop exported, mainly to Europe and the US.

It has recently sent trade delegations to several countries, including China, to attract investment and is experiencing a flux of interested business visitors.

Martin Sternberg, the managing director of SA Clothing Industries, one of the largest clothing manufacturers in South Africa and a member of the Seardel group of companies, said most local manufacturers would be interested in importing textiles from a source classified in terms of Agoa as a lesser developed country.

Lesser developed countries "have the advantage of being able to import fibres from anywhere in the world, while South Africa and Mauritius are limited to using fibres from the Southern African Development Community [SADC] region or the US", he said.

"However, import duties payable on products from outside SADC offset the advantages of Agoa."

Sternberg said discussions had been held with the department of trade and industry on waiving import duties to boost Agoa exports, but the SA Textile and Clothing Workers' Union was opposed to the move.

Union representatives were not available for comment at the time of going to press.