Strengthening trade relations with Africa
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.
21 AGOA FORUM 2013: Ethiopia will host the 2013 US-Africa AGOA Forum. AGOA.info has been informed that the Forum will not take place as envisaged on 28 June - 1 July, but at a later date yet to be determined. The theme for this year’s Forum is “Trade and Technology for sustained change”“
21 December 2012: Guinea-Bissau and Mali lose AGOA eligibility
APRIL 2013: Monthly data has been updated to include February 2013 data, quarterly includes full year 2012 data.
New US strategy towards Africa: White House Factsheet on new strategy towards Africa, plus overview of past US engagement with Africa. Click here for the file and this link for a summary article.
02 August 2012: Bill to extend third country fabric provision passes Congress Download the House of Reps. Bill at this link
South Sudan declared AGOA-eligible on 26 March 2012. Earlier, Cote d'Ivoire, Niger and Gambia declared AGOA eligible on 25 October 2011. See news item, presidential declaration and trade overview at this link (S Sudan) and here (others).
US GSP extended and GSP benefits to be applied retrospectively for the year 2011 since expiry of previous GSP. See AGOA.info legal documents section at the following link.
AGOA at 10: Reflections on US-Africa trade with a focus on SACU: Tralac Working Paper that can be downloaded at this
December 2010: The Democratic Republic of Congo loses its AGOA eligibility status. See proclamation here (pdf download available at this link
ITC investigation of textiles and apparel: Further details at this link
AGOA IV – Changes to AGOA explained
For disaggregated trade data covering each AGOA country, follow the relevant link in the Country Sections (left column) or click here.
For detailed AGOA maps click here