African textile trade struggles under AGOA
A congressional watchdog agency said the African Growth and Opportunity Act's duty-free provisions have generally failed to stimulate sub-Saharan African trade in textiles and apparel with the United States.
'Benefiting from these provisions, U.S. textile and apparel imports from SSA countries are currently 52 percent higher than before AGOA implementation in 2000 and account for a significant proportion of non-oil imports from AGOA countries,' the Government Accountability Office said in its report to the House Ways and Means and Senate Finance committees. 'However, despite the tariff advantage, AGOA textile and apparel imports still represent only 1.3 percent of total U.S. imports of these goods.'
The GAO noted that U.S. apparel imports from AGOA countries have actually declined since 2005. Also, U.S. yarn and fabric imports from sub-Saharan African countries fell from about $24.2 million in 1998 to $15.6 million in 2008.
In recent years, Congress has searched for ways to boost AGOA-based trade. The 2008 Andean Trade Preference Extension legislation required GAO to develop recommendations to improve the textile and apparel trade from AGOA countries.
AGOA provides duty-free access to U.S. markets for more than 6,000 dutiable items in the U.S. import tariff schedule. While 48 sub-Saharan African countries are potentially eligible for AGOA, only 40 of those countries qualify to partake in those benefits.
Most of the U.S. textile and apparel imports from sub-Saharan Africa come from 10 countries, including Ethiopia, Kenya, Lesotho, Madagascar, Mauritius, Nigeria, South Africa, Swaziland, Tanzania and Zambia. Together, these countries account for 97 percent of this trade, the GAO said.
A GAO panel of experts pointed up options for how to encourage long-term investment in sub-Saharan Africa's textile and apparel industry, including:
' Extend the duration of the third-country fabric provision for least developed AGOA countries beyond 2012.
' Extend the duration and overall AGOA benefits beyond 2015.
The panel also said it is important for the United States to support investment through 'trade capacity building,' specifically:
' Fund regional trade hubs and focus on market promotion and business links.
' Align U.S. trade capacity building and development assistance with AGOA objectives.
'Many experts considered trade capacity building to be a key component of improving competitiveness of African textile and apparel inputs production, and in developing the physical and market infrastructure needed for a vibrant export sector,' the GAO said.