TRALAC - Trade Law Centre

US Trade Official Cautions Congress Against Delaying Agoa III Bill

Friday, 14 May 2004

Source: New Vision (Kampala)

Foreign buyers of local textiles under the African Growth Opportunities Act (AGOA) want the US Congress to pass the AGOA3 Bill faster.

Uganda"Every buyer in the US is holding back because we do not know what will happen after 2007. There is uncertainty about whether the Bill is going to be signed or not," Jack Budhrani, Apparel Tri-Star garment buyer said on Wednesday.

The AGOA3 clause allows sourcing of raw materials like fabrics from third party countries for manufacturing of garments in countries benefiting from the US quota and tariff-free facility under AGOA. Another threat is from the World Trade Organisation which will end all textile quotas in January 2005.

The US Ways and Means Committee passed the AGOA3 Bill which seeks to extend the programme from 2008 to 2015 on May 5.

However, the signing of the Bill extending third country fabric provision for three years, from September 2004 to 2007, including a phase down of benefits in the third year is very crucial for the continuity of AGOA beneficiary companies in Uganda and Africa.

Tri-Star is the only factory in Uganda exporting garments to the US under AGOA. The firm will soon open a second factory and employ 900 people.

Budhrani was at Tri-Star to place his third order and said, "Everybody believes it will be signed but the question is when? What happens if the Bill is not signed by October? It will affect many firms in Uganda and Africa."

Presidential assistant on AGOA Susan Muhwezi and Tri-Star boss Velupillai Kananathan said they would go on their knees for AGOA 3 to be passed.