TRALAC - Trade Law Centre

SA's Exports Grow To $4,9bn In 2003

Tuesday, 24 February 2004

Source: Business Report (South Africa)

The local clothing industry would lose its advantage in terms of the African Growth and Opportunity Act (Agoa) when the agreement on textiles and clothing was terminated at the end of the year, Brian Brink, the executive director of the Textile Federation, said at the weekend.

The agreement has protected the US domestic industry by imposing quotas on imports, but these have not applied to sub-Saharan Africa countries that are eligible for duty- and quota-free imports under Agoa.

Terminating the agreement would flood the US market with cheap imports from China, against which the South African industry would not be able to compete, Brink said.

"It is, therefore, crucial to provide as much assistance as possible to the fabric and made-up textile sector of sub-Saharan Africa before termination of the agreement," he said.

The free trade agreement being negotiated with the US would help sub-Saharan countries but talks had only just started.

Meanwhile, lesser developed countries like Kenya, Lesotho and Swaziland have formed a task group with representatives of US retail interests to lobby for an extension of the September 2004 deadline for the expiry of the special rule that allows them to use fabrics manufactured by third countries, mainly in the Far East.

Brink strongly rejected any automatic rollover of the deadline, which he said would prejudice South African interests.

"The US needs rather to encourage sub-Saharan countries to produce their own yarn and fabric," he said.

Failure to encourage enough active investment in these industries had been a shortcoming of Agoa and allowing lesser developed countries to continue using fabric from third countries would lead to "a bunch of sweatshops using cheap labour".

"More reliance should rather be placed on short supply provisions for yarn and fabric not produced in the US or sub-Saharan Africa.

"However, if it is considered necessary to conditionally extend the termination date of the special rule, this must be on a phased down basis over two years," he said.

Brink said the long-awaited amendments to the act that would usher in Agoa 111 should have been finalised towards the end of last year but were now only expected to be enacted by mid-year.

"As a result, the necessary amendments creating some certainty on the special rule will be perilously fine to the deadline," he said.

Other important proposed changes were the amendment to the rule of origin to include only the "essential component" of a garment and the extension of Agoa preferential entry to fabrics and made-up textiles.

"Any move to amend the existing rules of origin on qualifying apparel to make it applicable to only the essential component of a garment would benefit mainly big exporting countries in the Far East and be detrimental to the sub-Saharan textile sector," Brink said.

An acceptable amendment would be to permit a mixture of US and sub-Saharan Africa yarn and fabric, but this should not be extended to third-country inputs," he said.



“AGOA Latest AGOA Trade Data on AGOA.info

Click here to view a sector profile of South Africa’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.



Other regularly updated trade statistics on AGOA.info include:

  • AGOA-beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.