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US groups lobby for extension of AGOA

US groups lobby for extension of AGOA
Apparel Manufacturers of SA executive director Johann Baard
Published date:
Wednesday, 30 October 2013

US industry groups active in the textiles and apparel sectors have made a plea for the US government to extend the provisions of the American Growth and Opportunity Act (Agoa), in terms of which African states including SA are given preferential access to US markets.

The groups said Agoa had to be renewed as soon as possible, warning that any delay into 2015 would result in the loss of trade and jobs in both African and US markets.

Agoa was signed into law in 2000 and originally covered the eight-year period from October 2000 to September 2008, but amendments in 2004 extended its term to 2015.

According to the associations, including the American Apparel and Footwear Association and the African Cotton and Textile Industries Federation, imports under Agoa are also important for millions of American workers.

Last month Trade and Industry Minister Rob Davies travelled to Washington to persuade American politicians to extend SA’s trade access under Agoa.

In a joint statement yesterday, apparel industry bodies in Africa and the US said Agoa had to be renewed “ideally during 2013, but in no event later than 2014”.

“This is 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 US,” the associations said.

Agoa should be renewed for long enough — 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 (the) capital-intensive investment decisions necessary to attract textile investments or affect long-term sourcing partnership decisions.”

Apparel Manufacturers of SA executive director Johann Baard said yesterday the associations were confident Agoa would be renewed, given the manufacturing and job-creation profile of most Agoa exports.

“We will continue domestically to support the minister of trade and industry and his team in their ongoing efforts to lobby the US government for an early announcement for a further extension of the Agoa post2015,” Mr Baard said.

Obtaining third-country fabric status would add to the domestic sector’s ability to export competitively and duty-free to the US. “The current dispensation whereby South African clothing manufacturers are required to use domestic textile fabrics, has effectively served to chain our members to the starting blocks of the export race. This is simply due to the reality that US customers require fabrics for their garment ranges which are not domestically available in SA,” Mr Baard said.

The joint statement was significant as it was the first time apparel value chain stakeholders across national boundaries agreed on the need for all qualifying countries to enjoy a level playing field for duty-free market access to the US, he said.

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