South African Clothing Makers Could Miss AGOA Benefits
Speakers at an intra-African trade promotion program organized by the International Trade Centre (ITC) have warned African clothing manufacturers that they could soon lose out on a special Africa Growth and Opportunity Act (AGOA) ruling which allows them to source fabrics from outside the continent or the U.S.
However, this subsidy ceases on 30 September 2004, and unless companies have taken steps to invest or forge relationships with textile manufacturers in sub-Saharan Africa the industry could lose one of its biggest advantages, not to mention thousands of local jobs.
Shawna Turner, the AGOA adviser to Africa, said it was essential that garment manufacturers worked with local suppliers “because the quotas on Chinese imports to the U.S. would also fall away at the end of 2004, leaving duty-free imports the only advantage for Africa under the act until its expiry in 2008.”
Walter Simeoni, president of the SA Textile Federation and junior vice-president of the International Textile Federation, said “Clothing manufacturers are constantly using lack of textile capacity as an excuse for not making better use of the AGOA opportunity, but the local industry’s current capacity is 2.5 times larger than the AGOA requirement,” he said.
Several steps have been taken to promote exports, including the duty credit certification system, which enables manufacturers to import, duty free, fabrics used to make garments for export, and the creation of a cut-make-and-trim cluster pilot study in Cape Town which, if successful, will be rolled out across the country.