TRALAC - Trade Law Centre

South Africa: Clothing Exporters Told to Toe AGOA Line Or Get the Boot

Tuesday, 12 October 2004

Source: L'Express (Port Louis)

Although the exemption under AGOA III is valid just for one year,it represents hope for Mauritius. It should help the industry hold out after the dismantling of the Multi Fibre Agreement in January.

Textile producers should not miss the opprotunity to reorganise and consolidate their activities.

Although the "third country fabric" exemption is valid just for one year, it represents hope for the Mauritian economy. This should help the industry hold out when the Multi Fibre Agreement is dismantled next January.

The Mauritian textile industry heaved a sigh of relief last week when the US Congress voted an amendment to the African Growth and Opportunity Act (AGOA) III, giving Mauritius the "third country fabric" exemption. With the dismantling of the Multi Fibre Agreement (MFA) as from January 2005, the adoption of this exemption is a real blessing.

It means that Mauritian textile goods will have duty-free access onto the American market even if producers import their raw materials from countries outside the region covered by AGOA. The third country fabric is granted for one year with renewal opportunities for three more years.

In other words, Mauritius has until 2007 to breathe and find other solutions to boost its textile industry. The country will be on the same level as other African countries, which have already benefited from the exemption. "These countries got ahead of us as first exporters of textiles and clothing to the US market," the minister of Industry, Sushil Kushiram, says. Hence, this latest development should help the country be more competitive on the American market.

Mauritian textiles have suffered a lot without this exemption. 60% of the exports to the US were subject to 17-18% duty. As a result, exports to the US dropped by 15% while there was an increase by 19% of exports to Europe over the same period. "This exception should help us stabilise our exports to the US in the short-term," Sushil Kushiram asserts.

The third country fabric really comes as a breath of fresh air for the textile industry. It should put an end to the wave of factory closures that Mauritius has had to face over the past months. Hong Kong companies suffered more specifically from the duty on the American market. Therefore, many packed up to relocate in Asian countries where production costs are lower.

Struggle to obtain exemption

But the government should stay on the alert. Of course, there are reasons for rejoicing. But we should not forget that this is only a "break" until 2007. The minister of Industry is right to point out: "In the mid-term, we'll have to rely on efforts made by small and medium enterprises to rehabilitate and modernise. This should help ensure a more efficient and competitive industry."

Likewise, the chief-executive officer of the Compagnie Mauricienne de Textile, François Woo, maintains that the government shouldn't rest on its laurels. "If nothing's done during this year or the following one, we'll move backwards. The situation will be worse and we won't be able to do anything to make it better. We can't expect exceptions to come from anywhere."

However, the efforts of the government, especially the minister of Foreign Affairs and International trade, Jayen Cuttaree, should be given recognition. Mauritius has struggled for the exemption; patience and perseverance have been rewarded. After the adoption of the AGOA III last June and the failure of Mauritius to get the exemption, Jayen Cuttaree did everything possible to obtain it by dint of visits abroad and talks with highly placed people. Mauritius can celebrate this positive note in an otherwise dreary world economic context...



“AGOA Latest AGOA Trade Data currently available on AGOA.info


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 AGOA.info include: (click each link to view)

  • 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.