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Agoa: New Opportunities for the Textile and Clothing Industries in Sub-Saharan Africa

  • ID: 38736
  • Report
  • January 2002
  • Region: Africa, Sub-Saharan Africa
  • 36 pages
  • Textiles Intelligence Ltd.
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Research-based report which provides a comprehensive summary of the African Growth and Opportunity Act which provides Sub-Saharan African countries with duty-free and quota-free access to the US market, subject to certain provision. The Act has had a significant impact on the region's textile and apparel industries.

The US African Growth and Opportunity Act, implemented in October 2000, provides for duty-free and quota-free access to the US market for textiles and apparel made in Sub-Saharan Africa. To qualify for AGOA benefits, apparel must be made in an eligible Sub-Saharan African country and, normally, be produced from materials formed within the region or in the USA. For a limited period, however, the Special Apparel Provision permits apparel makers in lesser developed countries to source materials globally without losing AGOA benefits.

Shipments to the US market under AGOA are likely to rise while the provision remains in force. But if it is withdrawn as planned in late 2004, African suppliers will have difficulty in competing against those in China—especially once global quotas are eliminated at the end of 2004 and the quota-free access currently enjoyed by AGOA beneficiary countries ceases to be a competitive advantage. Madagascar could prove to be the major exception to this rule as long as it can overcome its current political difficulties. AGOA could also encourage investment in textile mills to improve local fabric supplies. In this respect, AGOA is likely to provide long-term benefits to the textile industries in South Africa, Mauritius and Namibia.
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Summary
The African Growth and Opportunity Act
Introduction
Main provisions of AGOA
Apparel provision
Special apparel provision
Eligibility
GSP criteria
New AGOA criteria
Certificates of origin
Apparel export visa requirements
Enforcement mechanisms
Eligible Countries
Experiences of beneficiaries
Eligibility for the apparel and special apparel provisions
Limitations on Textile Products Eligible for Benefits
Products covered by AGOA
Cap on imports of groupings 4 and 5
Suspension of duty-free treatment in the event of import surges
Impact on African Trade
Trading pattern
Performance by country
Impact of AGOA on Investment in Sub-Saharan Africa
Improved investment incentives
Grouping 4 benefits: a bigger incentive over the longer term
The end of MFA-type quotas
The AGOA safeguard clause: a sting in the tail?
Investment climate in sub-Saharan Africa
Disincentives to investment
The impact of AGOA on investment in eligible countries
AGOA in the Medium and Longer Term
Short term prospects
The longer term conundrum

List of tables
Table 1: Countries eligible for preferential treatment under AGOA, March 31, 2002
Table 2: USA: imports of textiles and apparel from Sub-Saharan Africa, 1998-2001
Table 3: USA: imports of textiles and apparel from major sources in Sub-Saharan Africa, 1999-2001
Table 4: USA: imports under AGOA from all beneficiary countries, 2000-01
Table 5: USA: imports under AGOA from Lesotho, 2000-01
Table 6: USA: imports under AGOA from Madagascar, 2000-01
Table 7: USA: imports under AGOA from Kenya, 2000-01
Table 8: USA: imports under AGOA from Swaziland, 2000-01
Table 9: USA: imports under AGOA from Malawi, 2000-01
Table 10: USA: imports under AGOA from Ethiopia, 2000-01
Table 11: USA: imports under AGOA from South Africa, 2000-01
Table 12: USA: imports under AGOA from Mauritius, 2000-01
Table 13: Usage of capped AGOA categories, Oct 2000-Sep 2001
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The US African Growth and Opportunity Act, implemented in October 2000, provides for duty-free and quota-free access to the US market for textiles and apparel made in Sub-Saharan Africa. To qualify for AGOA benefits, apparel must be made in an eligible Sub-Saharan African country and, normally, be produced from materials formed within the region or in the USA. For a limited period, however, the<BR>Special Apparel Provision permits apparel makers in lesser developed countries to source materials globally without losing AGOA benefits.<BR><BR>Shipments to the US market under AGOA are likely to rise while the provision remains in force. But if it is withdrawn as planned in late 2004, African suppliers will have difficulty in competing against those in China—especially once global quotas are eliminated at the end of<BR>2004 and the quota-free access currently enjoyed by AGOA<BR>beneficiary countries ceases to be a competitive advantage.<BR><BR>Madagascar could prove to be the major exception to this rule as long as it can overcome its current political difficulties. AGOA could also encourage investment in textile mills to improve local fabric supplies.<BR><BR>In this respect, AGOA is likely to provide long-term benefits to the textile industries in South Africa, Mauritius and Namibia.<BR>
Note: Product cover images may vary from those shown
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- Ethiopia
- Kenya
- Lesotho
- Madagascar
- Malawi
- Mauritius
- South Africa
- Swaziland
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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