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Ethiopia: Companies Benefiting from AGOA

Published date:
Friday, 27 August 2004

The extension of favorable trade benefits to sub-Saharan nations in the latest version of the African Growth and Opportunity Act, called AGOA III, helped boost Madagascar's manufacturing and export sectors, restoring hope in the nation's economic future, Malagasy Ambassador Rajaonarivony Narisoa told a trade forum August 25.

"AGOA has been a tremendous success," creating thousands of new jobs, Narisoa told a Washington breakfast forum sponsored by Women in International Trade (WIIT), an umbrella organization of women trade professionals that includes 30 chapters in the United States.

"More importantly," he added, "it has fostered a dialogue and partnership between U.S. and African governments, promoted business and increased investment opportunities and demand for Africa's trade." According to the State Department, total exports under AGOA increased by 55 percent in 2003 to $14 billion, more than half of sub-Saharan Africa's overall exports to the United States.

The diplomat was joined on the WIIT panel by Rosa Whitaker, former assistant U.S. trade representative (USTR) for Africa, whose leadership of the AGOA III Action Committee was instrumental in getting the latest version of the landmark trade legislation passed by Congress. They discussed "The African Growth and Opportunity Acceleration Act (AGOA III): The Way Forward."

President Bush signed the latest version of AGOA last July, notably extending the rule that permits duty- and quota-free apparel imports into the U.S. market from sub-Saharan nations that use fabric from another country -- called the third-country fabric provision.

AGOA III came at just the right time, Narisoa said. The third-country fabric provision, due to expire at the end of September, meant, "sub-Saharan countries were threatened by the prohibitive duties on garments sewn from non-country fabric" that would have come into effect.

Without the extension, many AGOA-eligible countries, like Madagascar, also "had to face the cancellation of thousands and thousands of [apparel] orders just before AGOA III was passed," he added. "Some foreign-owned firms had even started to relocate.

"After the passage of AGOA III, hope has resumed and [apparel] orders have significantly increased," Narisoa declared. "In Madagascar right now, [textile] firms are operating at full capacity and 40,000 new jobs have just been created."

However, "this does not mean the future of the textile industry [in Africa] is rosy," added the diplomat. With all quotas in the World Trade Organization's (WTO's) Multi-fiber Agreement facing elimination in January 2005, "integration of the all-around textile industry is a must if Africa is to survive the fierce competition of the Asian giants."

Rosa Whitaker, who heads her own investment consulting firm, agreed with Narisoa on the importance of greater economic integration among sub-Saharan nations. "We all need to be focused on how we can get these [African] countries competitive at every stage of the apparel sector from reaping cotton to ginning, spinning and weaving the fabric in the process of vertical integration," she said.

"This needs to be our focus because even if there is an AGOA IV, Africa needs to do more value-added in all of these sectors," she stressed.

Whitaker, whose contacts in Congress proved extremely helpful in forging the business-government partnership that lobbied successfully for AGOA's latest enhancement, said she believed "we have all the AGOA we're going to get" for this year, which is "not necessarily bad because we've got a lot to work on."

Having just come off a seven-country trip to the continent, Whitaker said, "I saw the human face of AGOA" in the number of people who had good jobs thanks to the trade bill. "I saw it in Madagascar ... where I visited two factories where 3,000 people were working, primarily women, all producing clothes for AGOA."

Before the recent extension of AGOA, Whitaker said, these workers' jobs "were hanging in the balance." Now, thanks to AGOA III, their jobs have been saved and private-sector growth is continuing in the island nation.

All through Africa, "AGOA is making a big difference" in improving Africans' living standards and helping governments diversify and reform their economic sectors, Whitaker concluded.

“AGOA Latest AGOA Trade Data on

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

Other regularly updated trade statistics on 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.

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