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You are here: Home/News/Article/Madagascar: AGOA III Saved Jobs, Restored Hope , Says Envoy

Madagascar: AGOA III Saved Jobs, Restored Hope , Says Envoy

Published date:
Tuesday, 31 August 2004

According to bilateral trade data released a short while ago, exports from Mauritius to the US during the first 6 months of 2004 have dropped by 13% over the corresponding period last year. For the year to June, Mauritius exported US$ 132mn worth of goods to the US, in contrast to the US$ 150mn recorded in the year to June a year ago. Despite this reduction in exports, the country continues to enjoy a substantial trade surplus with its North American trade partner, from which it imported only US$ 8mn worth of goods thus far this year.

Disaggregated trade data [Click here to view a sector profile of Mauritius’ bilateral trade with the US] reveals that Mauritius exports a range of goods to the US, led by apparel. Other exports include agricultural products (US$ 7,4mn to June), electronic products (US$ 6,2mn) and minerals and metals (US$ 2,6mn).

Apparel exports are the leading recipient of duty-free market access under AGOA, with 2003 exports valued at US$ 269mn. Nevertheless, total exports of apparel in the current year to June 2004 are down 20% on last year’s figures (both in value and volume).

Half of these exports complied with AGOA’s rules of origin, which require that Mauritius sources its fabric and yarn inputs either locally or from other AGOA-beneficiary countries in the region. Some of the country’s foreign-sourced textile inputs are bought from SA, especially wool, cotton fabrics and cotton yarns. But even here the value of trade has dropped significantly in recent years, indicating that Mauritius has to source competitively priced inputs elsewhere. For example, South Africa’s exports of woven cotton fabric to Mauritius (with a purity of >85% cotton) have plummeted from R 123mn (approximately US$ 18mn) in 2001 to R 9,6mn (approximately US$ 1,4mn) in 2003. Cotton yarn exports to Mauritius have likewise fallen 6-fold to R 7,7mn in 2003.

When AGOA was enacted late in 2000, the Act extended the duty-free access previously already available to selected countries under the Generalized System of Preferences (GSP). 1,800 tariff line [Click here to view the list] items were added to the existing list of approximately 4,600 GSP line items, excluding the garment categories which required compliance with an additional set of conditions.

But Mauritius has so far failed to diversify its US-bound exports beyond the “old” GSP categories. Apparel continues to be the only product category previously ineligible for GSP benefits where Mauritian producers have been able to draw direct benefits from AGOA. With an average import tariff of between 15% and 20%, the preferences to this sector of the Mauritian economy have been important. While the volume of total apparel exports to the US has grown by roughly 5% per annum between 2001 and 2003, the proportion of AGOA-eligible garment exports has increased by 85% annually.

It is clear that AGOA – while not fully utilized by Mauritius – has helped stem the decline in US-bound exports, especially more recently in the apparel sector. With the pending removal of quotas under the WTO’s Agreement on Textiles and Clothing early in 2005, it remains to be seen to what extent Mauritian producers are able to maintain their current share of the US market. The relative preference margins provided by AGOA will be an even more critical factor, assuming that local producers will be able to source adequate supplies of competitively priced textiles both locally and from within the region. The absence of a regional supply chain may otherwise induce producers to forfeit preferences under AGOA in favour of the competitive advantage brought about by utilising (non-eligible) third country fabrics and yarns.

[ Eckart Naumann ]

“AGOA Latest AGOA Trade Data on

Click here to view a sector profile of Mauritius’ 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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