TRALAC - Trade Law Centre

US & African companies call for immediate renewal of AGOA

Friday, 18 October 2013

Source: Fibre2Fashion

The African Growth and Opportunity Act (AGOA) plays a vital role in the development and support of a competitive US-African textile and apparel trade partnership, a critical step to developing a broader reciprocal commercial relationship with AGOA countries.

AGOA has created more than 300,000 direct jobs in Africa, and AGOA imports are important for the millions of American workers in apparel retailing, manufacturing and importing companies.

Originally enacted in 2000, AGOA has enjoyed widespread bipartisan support and has been modified and extended several times. It is currently authorized through September 2015.

Representing the apparel manufacturing, brand, and retail industries in Africa and the United States, the National Retail Federation and other like minded associations have urged the following:

 

  • Immediate renewal: AGOA must be renewed as soon as possible, ideally during 2013, but in no event later than 2014. Because sourcing decisions are made many months in advance, renewal needs to occur soon for it to be truly seamless. Any delay into 2015, especially in light of last year's last-minute renewal of the third country fabric provision, will discourage continued sourcing and new investment, resulting in the loss of trade and jobs in both Africa and the United States.

 

  • Long term renewal: AGOA should be renewed for a long enough period -- at least 15 years -- to ensure the predictability necessary to support trade and investment decisions. Shorter term renewals will not provide enough certainty to enable the industry to make capital intensive investment decisions necessary to attract textile investments or affect long term sourcing partnership decisions.

 

  • Long term third country fabric renewal: The third country fabric provision should be renewed for the full duration of the AGOA renewal. This provision has become central to AGOA. Renewing it for a shorter duration than the full program would be tantamount to renewing the entire program for that shorter duration. Moreover, further vertical integration into upstream textile production requires maintenance of a healthy downstream apparel sector, which in turn is dependent upon the third country fabric provision.

 

  • Third country fabric extended to all AGOA beneficiaries: All AGOA beneficiary countries should be able to use third country fabric provisions. Unequal application of this provision lessens the positive impact of AGOA and retards regional integration efforts.