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Strengthening trade relations with Africa

Published date:
Friday, 03 August 2012

For more than a year now, members of the House and Senate have been at work to strike a deal that would extend a special provision in a little known trade law called AGOA – the African Growth and Opportunity Act.

Today, in a display of bipartisan and bicameral unity, the Congress took a bold and positive step to extend that provision and in the process preserve Africa’s apparel industry and help U.S. companies promote the well-being of African families. In a Congress in short supply of agreement, we proved it is possible to pass bipartisan legislation well before a crucial deadline.

This effort brought together Reps. Charlie Rangel (D-N.Y.) and Jim McDermott (D-Wash.) who provided invaluable historical perspective and experience, and Reps. Dave Camp (R-Mich.), Carl Levin (R-Mich.), Ed Royce (R-Calif.) and Sen. Chris Coons (D-Del.) who brought Members from their respective parties and chamber together to swiftly usher this bill to passage.

Signed into law in 2000, AGOA has received the support of our last three presidents – Clinton, Bush and Obama. From the start, AGOA has enjoyed bipartisan support in both chambers of Congress, as well as earning the ardent support of entities such as the U.S. Chamber of Commerce, the Corporate Council on Africa and the Brookings Institution.

While unfamiliar to many, AGOA’s value is well known to the U.S. garment industry and to the estimated 300,000 Africans that have been employed over the years, many of whom are women. One of AGOA’s foundations is its third country fabric provision that permits African nations to import raw materials from anywhere in the world, produce apparel, and export the finished product to Africa from the U.S. duty-free. Although the provision is not set to expire until September 30 of this year, the garment industry was in jeopardy because of its need to place purchase orders and make business decisions months in advance.

What became clear was that any further delays to extend AGOA’s fabric provision would have caused immediate and real harm to both U.S. and African companies, and the hundreds of thousands employed thanks to the provision. Reports indicated that companies doing business in countries like Lesotho, Mauritius, Botswana, and Swaziland started to slow and even cancel orders. Corporations looked to other continents to complete orders once filled by African nations, and U.S. companies unable to wait for Congressional action decided to look elsewhere to fill these orders.

In a recent report, the Brookings Institution notes that companies including Levi’s, Gap, Old Navy, Victoria’s Secret, Target, Calvin Klein, Gloria Vanderbilt, Vanity Fair and Lands’ End all source apparel from Africa and in turn sell their products to U.S. consumers.

In 2000, The Economist published an article that characterized Africa as the hopeless continent. A decade later, a new article appeared and referenced a continent on the rise fueled by growth and opportunity. Across Africa we see growth rates that outshine that of our own; Africa is now home to six of the world’s fastest growing economies and rapidly growing middle class. As countries such as China, Brazil, and India develop new and robust trade policies directed toward Africa, the U.S. continues to lag behind thus placing U.S. businesses at a severe and serious trade disadvantage.

While we must take a moment to celebrate this victory, Congress must move with haste to start serious discussions on bipartisan efforts to strengthen our trade relationship with this promising continent, for the benefit of families, workers and communities both here in the U.S. and across Africa.

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