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Overview of AGOA's apparel
provisions in the context of
US-Africa trade
by Eckart Naumann
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www.tralac.orgReaders are encouraged to quote and reproduce this material for educational, non
acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of TR
AD
E B
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Overview of AGOA's apparel
provisions in the context of
Africa trade
Eckart Naumann
tralac
No. S12
���� Please consider the environment before printing this publication
www.tralac.org | [email protected] | Twitter @tradelawcentre Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, pr
acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of
Working Paper
Overview of AGOA's apparel
tralac Trade Brief
No. S12TB05/2012
October 2012
Please consider the environment before printing this publication
Twitter @tradelawcentre | Copyright © tralac, 2012.
profit purposes, provided the source is
acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Working Paper
Copyright © tralac, 2012.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes,
provided the source is acknowledged. All views and opinions expressed remain solely those of the
authors and do not purport to reflect the views of tralac
This publication should be cited as: Naumann, E. 2012.
Overview of AGOA's apparel provisions in the context of US-Africa trade.
Stellenbosch: tralac.
This publication has been financed by the Swedish International Development Cooperation Agency,
Sida. Sida does not necessarily share the views expressed in this material. Responsibility for its
contents rests entirely with the author.
www.tralac.org | [email protected] | Twitter @tradelawcentre
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes,
provided the source is acknowledged. All views and opinions expressed remain solely those of the authors
and do not purport to reflect the views of tralac.
Table of contents
Introduction ..................................................................................................................................1
1. The apparel provisions under AGOA ........................................................................................5
1.1 Product coverage ................................................................................................................5
1.2 Country eligibility ................................................................................................................6
1.3 Eligibility for AGOA's wearing apparel provisions...............................................................7
1.4 Apparel Rules of Origin and other apparel provisions under AGOA ...................................8
1.5 AGOA apparel quotas .......................................................................................................11
2. Apparel trade under AGOA and pre-AGOA ............................................................................13
3. Recent legislative changes – extension of the third-country fabric provisions ......................21
Annex 1. Overview of AGOA legislative amendments over the years .......................................27
List of tables and figures
Tables
1 Sample apparel categories qualifying for duty-free treatment under AGOA ..........................5
2 Wearing apparel RoO categories .............................................................................................9
3 The 15 leading apparel products exported to the US under AGOA in 2011 ..........................17
4 Leading apparel exporters to the US (>US$1 million) 1996 and 2011 ..................................18
Figures
1 AGOA quota utilisation 2002-2012 .......................................................................................12
2 Global apparel exports (preferential versus non-preferential) to the US 1996-2011 ..........14
3 Apparel exports from AGOA beneficiary countries to the US 1996-2011 ............................15
4 Total US apparel imports v US imports from leading Asian countries versus apparel imports
under AGOA ................................................................................................................................20
5 Index of changes in apparel exports to the US for the 1996-2011 period ..........................20
Introduction
The African Growth and Opportunity Act (AGOA) forms a part of United States trade legislation that
provides non-reciprocal preferential market access to the US market for qualifying exports made in
African beneficiary countries. The legislation was enacted u
2000, and extended (and to some extent broadened) by President George Bush during his term in
office. Under President Obama, important extensions were recently passed while the current US
Administration's recently released Africa policy undertakes to promote an extension of AGOA
beyond its current expiry date in 2015.
While AGOA is largely focused on enhanced US market access (in support of trade flows) for African
countries by removing US import tariffs and other rest
aspect and is in effect a policy framework that also covers trade
development assistance, bilateral political and business engagement (for example, through the
annual AGOA Forum), healthcare assistance, investment support and financing, as well as security
related cooperation. Regional trade hubs located in Gaborone, Nairobi, Accra and Dakar provide and
implement some of the support measures envisaged (and required) by the AGOA legis
Although AGOA is very generous it also has numerous shortcomings, many of which lie in the fact
that it represents US trade legislation, rather than a bilateral trade agreement. As a result,
preferences are neither permanent nor necessarily predict
around the extension of AGOA's apparel provisions in as far as they relate to the third
provision are a case in point, as are substantial gaps and other restrictions relating to the legislations'
product coverage.
The objective of this policy brief is to provide an overview of AGOA's wearing apparel provisions
given their recent legislative extension, but also to place Africa's apparel exports to the US into broad
context with regard to (a) trade flows
exports five years prior to AGOA's inception compared to today, and (c) AGOA apparel exports in the
context of global apparel imports into the US market.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
e African Growth and Opportunity Act (AGOA) forms a part of United States trade legislation that
reciprocal preferential market access to the US market for qualifying exports made in
African beneficiary countries. The legislation was enacted under former President Bill Clinton in
2000, and extended (and to some extent broadened) by President George Bush during his term in
office. Under President Obama, important extensions were recently passed while the current US
ased Africa policy undertakes to promote an extension of AGOA
beyond its current expiry date in 2015.
While AGOA is largely focused on enhanced US market access (in support of trade flows) for African
countries by removing US import tariffs and other restrictions, the legislation goes well beyond this
aspect and is in effect a policy framework that also covers trade-capacity building, general
development assistance, bilateral political and business engagement (for example, through the
ealthcare assistance, investment support and financing, as well as security
related cooperation. Regional trade hubs located in Gaborone, Nairobi, Accra and Dakar provide and
implement some of the support measures envisaged (and required) by the AGOA legis
Although AGOA is very generous it also has numerous shortcomings, many of which lie in the fact
that it represents US trade legislation, rather than a bilateral trade agreement. As a result,
preferences are neither permanent nor necessarily predictable; recent experience and uncertainty
around the extension of AGOA's apparel provisions in as far as they relate to the third
provision are a case in point, as are substantial gaps and other restrictions relating to the legislations'
The objective of this policy brief is to provide an overview of AGOA's wearing apparel provisions
given their recent legislative extension, but also to place Africa's apparel exports to the US into broad
context with regard to (a) trade flows trends since AGOA's inception, (b) Sub-Saharan African apparel
exports five years prior to AGOA's inception compared to today, and (c) AGOA apparel exports in the
context of global apparel imports into the US market.
rel provisions in the context of US-Africa trade
Eckart Naumann
1
e African Growth and Opportunity Act (AGOA) forms a part of United States trade legislation that
reciprocal preferential market access to the US market for qualifying exports made in
nder former President Bill Clinton in
2000, and extended (and to some extent broadened) by President George Bush during his term in
office. Under President Obama, important extensions were recently passed while the current US
ased Africa policy undertakes to promote an extension of AGOA
While AGOA is largely focused on enhanced US market access (in support of trade flows) for African
rictions, the legislation goes well beyond this
capacity building, general
development assistance, bilateral political and business engagement (for example, through the
ealthcare assistance, investment support and financing, as well as security-
related cooperation. Regional trade hubs located in Gaborone, Nairobi, Accra and Dakar provide and
implement some of the support measures envisaged (and required) by the AGOA legislation.
Although AGOA is very generous it also has numerous shortcomings, many of which lie in the fact
that it represents US trade legislation, rather than a bilateral trade agreement. As a result,
able; recent experience and uncertainty
around the extension of AGOA's apparel provisions in as far as they relate to the third-country fabric
provision are a case in point, as are substantial gaps and other restrictions relating to the legislations'
The objective of this policy brief is to provide an overview of AGOA's wearing apparel provisions
given their recent legislative extension, but also to place Africa's apparel exports to the US into broad
Saharan African apparel
exports five years prior to AGOA's inception compared to today, and (c) AGOA apparel exports in the
Summary of key observations:
• AGOA's apparel preferences translate into a sizeable preference margin, with the leading 15
apparel tariff lines (accounting for nearly half of all apparel trade under AGOA) benefiting from
duty savings of between 14.9% and 32% compared to their Most Favoured Nat
• The AGOA wearing apparel provisions provide special Rules of Origin (RoO) requirements to
qualifying less developed beneficiary countries, by allowing the use of fabrics sourced from
third countries. This provision was initially time
most recently in August 2012 (weeks prior to its expiry) and now terminates along with the
general AGOA programme at the end of 2015
• Apparel categories are generally not Generalised System of Preferences (GSP) eligible,
therefore AGOA's apparel preferences are of even greater significance to beneficiary countries
as is the incentive to implement and maintain the related (and required) apparel customs visa
programme which is an important precondition
• While AGOA apparel exports are subject to a quota system based on volume (rather than
value), the respective ceilings are set at a level that to date have not been of any consequence
to apparel exporters; the quota system is therefore of no effect. At its peak, the combined
quota utilisation reached 37.6% while utilisation of the
quota (for exports using third
• Global imports of apparel into the US continue to rise, with imports under preference current
accounting for 18% of the total (of this, AGOA apparel imports account for only 1%). At its peak
in 2004, the share of preferential imports was 26% with the share of AGOA imports at 2.4%.
The share of preferential imports was thus at its highest in the
of Multifibre Arrangement (MFA) quotas.
• AGOA apparel imports increased rapidly since AGOA's inception and peaked in 2004. Since
then, aggregate exports from Sub
year of AGOA (2001). From 2005 onwards, the share of non
declined to 1% (from 8% in 2004) while the share of exports utilising the recently renewed
third-country fabric provision has increased from 76% to 92% over the same peri
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
apparel preferences translate into a sizeable preference margin, with the leading 15
apparel tariff lines (accounting for nearly half of all apparel trade under AGOA) benefiting from
duty savings of between 14.9% and 32% compared to their Most Favoured Nat
The AGOA wearing apparel provisions provide special Rules of Origin (RoO) requirements to
qualifying less developed beneficiary countries, by allowing the use of fabrics sourced from
third countries. This provision was initially time-bound but has been renewed three times,
most recently in August 2012 (weeks prior to its expiry) and now terminates along with the
general AGOA programme at the end of 2015
Apparel categories are generally not Generalised System of Preferences (GSP) eligible,
herefore AGOA's apparel preferences are of even greater significance to beneficiary countries
as is the incentive to implement and maintain the related (and required) apparel customs visa
programme which is an important precondition
rts are subject to a quota system based on volume (rather than
value), the respective ceilings are set at a level that to date have not been of any consequence
to apparel exporters; the quota system is therefore of no effect. At its peak, the combined
a utilisation reached 37.6% while utilisation of the Least Developed Country
quota (for exports using third-country fabrics) recorded 68.1% utilisation.
Global imports of apparel into the US continue to rise, with imports under preference current
accounting for 18% of the total (of this, AGOA apparel imports account for only 1%). At its peak
in 2004, the share of preferential imports was 26% with the share of AGOA imports at 2.4%.
The share of preferential imports was thus at its highest in the year preceding the phasing out
of Multifibre Arrangement (MFA) quotas.
AGOA apparel imports increased rapidly since AGOA's inception and peaked in 2004. Since
then, aggregate exports from Sub-Saharan Africa have reached levels comparable to the first
of AGOA (2001). From 2005 onwards, the share of non-preferential apparel exports has
declined to 1% (from 8% in 2004) while the share of exports utilising the recently renewed
country fabric provision has increased from 76% to 92% over the same peri
rel provisions in the context of US-Africa trade
Eckart Naumann
2
apparel preferences translate into a sizeable preference margin, with the leading 15
apparel tariff lines (accounting for nearly half of all apparel trade under AGOA) benefiting from
duty savings of between 14.9% and 32% compared to their Most Favoured Nation (MFN) tariff
The AGOA wearing apparel provisions provide special Rules of Origin (RoO) requirements to
qualifying less developed beneficiary countries, by allowing the use of fabrics sourced from
but has been renewed three times,
most recently in August 2012 (weeks prior to its expiry) and now terminates along with the
Apparel categories are generally not Generalised System of Preferences (GSP) eligible,
herefore AGOA's apparel preferences are of even greater significance to beneficiary countries
as is the incentive to implement and maintain the related (and required) apparel customs visa
rts are subject to a quota system based on volume (rather than
value), the respective ceilings are set at a level that to date have not been of any consequence
to apparel exporters; the quota system is therefore of no effect. At its peak, the combined
Least Developed Country (LDC) sub-
country fabrics) recorded 68.1% utilisation.
Global imports of apparel into the US continue to rise, with imports under preference currently
accounting for 18% of the total (of this, AGOA apparel imports account for only 1%). At its peak
in 2004, the share of preferential imports was 26% with the share of AGOA imports at 2.4%.
year preceding the phasing out
AGOA apparel imports increased rapidly since AGOA's inception and peaked in 2004. Since
Saharan Africa have reached levels comparable to the first
preferential apparel exports has
declined to 1% (from 8% in 2004) while the share of exports utilising the recently renewed
country fabric provision has increased from 76% to 92% over the same period. In 2001
(when the first apparel preferences became available to AGOA beneficiaries) the third
fabric rule utilisation rate was 'only' 28%.
• Earlier legislative amendments compelling AGOA beneficiaries to first utilise certain fabrics
(specially designated to be) available in commercial quantities within the region were reversed
not long after their original enactment without ever having been fully implemented and
enforced. In its first application this provision related to denim fabric, and in ef
producers to first utilise the designated capacity of regional fabric prior to being able to utilise
fabrics from third countries not part of the AGOA group (and not qualifying for preferences).
This reversal somewhat reinforces the notion t
the US market, African exporters (often disadvantaged by logistic challenges, a lack of capital
and other issues) depend on flexibility with regard to fabric sourcing, both in respect of
cost/quality/variety as well as commercial value chain realities.
• While AGOA has led to increased exports (and likely reduced substitution of exports from
African to other suppliers) it has not led to any significant change in the number of countries
each shipping more than US$1 million worth of apparel to the US. While the aggregate number
has grown from 10 to 11 (1996 compared to 2011), the list of countries has only changed
slightly with two countries (Ethiopia and Ghana) not formerly on this list.
• Two countries that were significant apparel exporters to the US in 1996 saw a 98% and 99%
(South Africa and Zimbabwe respectively) contraction in US exports by 2011. South Africa
appears no longer able to compete without access to the third
Zimbabwe is not an AGOA beneficiary country, the country's economic and political situation
having led to a decline of the sector more broadly.
• US apparel imports have remained on an upward trajectory with steady growth
2008/2009 period being an exception. Muc
from Asian countries, while AGOA countries have seen their US
decrease. When charting these trade flows on an indexed basis, the 2004 year (last year of
Multifibre quotas) was clearl
being reversed, in strong contrast to the growth in US apparel sourcing in some of the Asian
countries (China, Bangladesh, Vietnam and Cambodia).
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
(when the first apparel preferences became available to AGOA beneficiaries) the third
fabric rule utilisation rate was 'only' 28%.
Earlier legislative amendments compelling AGOA beneficiaries to first utilise certain fabrics
designated to be) available in commercial quantities within the region were reversed
not long after their original enactment without ever having been fully implemented and
enforced. In its first application this provision related to denim fabric, and in ef
producers to first utilise the designated capacity of regional fabric prior to being able to utilise
fabrics from third countries not part of the AGOA group (and not qualifying for preferences).
This reversal somewhat reinforces the notion that in order to be – and remain
the US market, African exporters (often disadvantaged by logistic challenges, a lack of capital
and other issues) depend on flexibility with regard to fabric sourcing, both in respect of
as well as commercial value chain realities.
While AGOA has led to increased exports (and likely reduced substitution of exports from
African to other suppliers) it has not led to any significant change in the number of countries
US$1 million worth of apparel to the US. While the aggregate number
has grown from 10 to 11 (1996 compared to 2011), the list of countries has only changed
slightly with two countries (Ethiopia and Ghana) not formerly on this list.
e significant apparel exporters to the US in 1996 saw a 98% and 99%
(South Africa and Zimbabwe respectively) contraction in US exports by 2011. South Africa
appears no longer able to compete without access to the third-country fabric concession;
s not an AGOA beneficiary country, the country's economic and political situation
having led to a decline of the sector more broadly.
US apparel imports have remained on an upward trajectory with steady growth
2008/2009 period being an exception. Much of the growth is the result of increased sourcing
from Asian countries, while AGOA countries have seen their US-bound apparel exports
decrease. When charting these trade flows on an indexed basis, the 2004 year (last year of
Multifibre quotas) was clearly a watershed year, with the earlier rise in AGOA apparel exports
being reversed, in strong contrast to the growth in US apparel sourcing in some of the Asian
countries (China, Bangladesh, Vietnam and Cambodia).
rel provisions in the context of US-Africa trade
Eckart Naumann
3
(when the first apparel preferences became available to AGOA beneficiaries) the third-country
Earlier legislative amendments compelling AGOA beneficiaries to first utilise certain fabrics
designated to be) available in commercial quantities within the region were reversed
not long after their original enactment without ever having been fully implemented and
enforced. In its first application this provision related to denim fabric, and in effect compelled
producers to first utilise the designated capacity of regional fabric prior to being able to utilise
fabrics from third countries not part of the AGOA group (and not qualifying for preferences).
and remain – competitive in
the US market, African exporters (often disadvantaged by logistic challenges, a lack of capital
and other issues) depend on flexibility with regard to fabric sourcing, both in respect of
While AGOA has led to increased exports (and likely reduced substitution of exports from
African to other suppliers) it has not led to any significant change in the number of countries
US$1 million worth of apparel to the US. While the aggregate number
has grown from 10 to 11 (1996 compared to 2011), the list of countries has only changed
slightly with two countries (Ethiopia and Ghana) not formerly on this list.
e significant apparel exporters to the US in 1996 saw a 98% and 99%
(South Africa and Zimbabwe respectively) contraction in US exports by 2011. South Africa
country fabric concession;
s not an AGOA beneficiary country, the country's economic and political situation
US apparel imports have remained on an upward trajectory with steady growth – the
h of the growth is the result of increased sourcing
bound apparel exports
decrease. When charting these trade flows on an indexed basis, the 2004 year (last year of
y a watershed year, with the earlier rise in AGOA apparel exports
being reversed, in strong contrast to the growth in US apparel sourcing in some of the Asian
• The post-2015 period remains uncertain with
current form. While the US Administration is supportive of AGOA and considers the legislation
an important aspect of its Africa policy (while also recognising that many of the strongest
growing economies are likely to come from Africa for some time still), the US has in recent
years become more hawkish on the extension of unilateral, non
known to actively seek deeper bilateral partnerships with African countries. While the expiry of
the third-country fabric provisions will now only take place in 2015 along with the overall
AGOA legislation, there is a strong likelihood that future renewals may be on different terms
and that the preferences provided may not be as broad as is the case c
apparel exports, this will remain a serious risk factor going forward.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
2015 period remains uncertain with regard to AGOA's continued existence in its
current form. While the US Administration is supportive of AGOA and considers the legislation
an important aspect of its Africa policy (while also recognising that many of the strongest
ely to come from Africa for some time still), the US has in recent
years become more hawkish on the extension of unilateral, non-reciprocal preferences and is
known to actively seek deeper bilateral partnerships with African countries. While the expiry of
country fabric provisions will now only take place in 2015 along with the overall
AGOA legislation, there is a strong likelihood that future renewals may be on different terms
and that the preferences provided may not be as broad as is the case c
apparel exports, this will remain a serious risk factor going forward.
rel provisions in the context of US-Africa trade
Eckart Naumann
4
regard to AGOA's continued existence in its
current form. While the US Administration is supportive of AGOA and considers the legislation
an important aspect of its Africa policy (while also recognising that many of the strongest
ely to come from Africa for some time still), the US has in recent
reciprocal preferences and is
known to actively seek deeper bilateral partnerships with African countries. While the expiry of
country fabric provisions will now only take place in 2015 along with the overall
AGOA legislation, there is a strong likelihood that future renewals may be on different terms
and that the preferences provided may not be as broad as is the case currently. For African
1. The apparel provisions under AGOA
1.1 Product coverage
Apparel and certain textile products form part of a group of over 7
AGOA provisions. Products covered by the legislation include motor vehicles and certain
components, a variety of agricultural products such as cheese and vegetables, steel, chemical
products, footwear, wine, footwear and watches. Duty
a significant preference margin compared with MFN tariff status, as seen in the apparel examples
below. A more detailed table of AGOA trade in apparel follows further down.
Table 1 Sample apparel categories qualifying for duty
Product
tariff code
Product description
6106.1000 Women's or girls' blouses and shirts, knitted or crocheted,
of cotton
6105.1000 Men's or boys' shirts, knitted or crocheted, of cotton
6203.4240 Men's or boys' trousers and shorts, not bibs, not knitted or
crocheted, of cotton, not containing 15% or more by
weight of down, etc.
6204.6240 Women's or girls' trousers, breeches and shorts, not
knitted or crocheted, of cotton
*not elsewhere specified or included
AGOA builds on and extends the preferences granted under the United States Generalised System of
Preferences (US GSP), which offers preferences mostly in the form of duty
approximately 4 600 tariff lines. Under AGOA a further 1
what is already covered by the GSP, applicable to all AGOA beneficiary countries. AGOA also
eliminates the Competitive Needs Limitations (CNLs) that apply to
beneficiaries; this effectively places a cap on imports in each product category above where the
preferences are suspended. The wearing apparel provisions, which apply only to countries that are
designated as ‘lesser developed1
1 "lesser developed" is the terminology us
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
The apparel provisions under AGOA
Apparel and certain textile products form part of a group of over 7 000 tariff lines included under th
AGOA provisions. Products covered by the legislation include motor vehicles and certain
components, a variety of agricultural products such as cheese and vegetables, steel, chemical
products, footwear, wine, footwear and watches. Duty-free status under AGOA often translates into
a significant preference margin compared with MFN tariff status, as seen in the apparel examples
below. A more detailed table of AGOA trade in apparel follows further down.
Table 1 Sample apparel categories qualifying for duty-free treatment under AGOA
MFN
tariff
Women's or girls' blouses and shirts, knitted or crocheted, 19.7%
Men's or boys' shirts, knitted or crocheted, of cotton 19.7%
Men's or boys' trousers and shorts, not bibs, not knitted or
crocheted, of cotton, not containing 15% or more by
16.6%
Women's or girls' trousers, breeches and shorts, not
knitted or crocheted, of cotton, nesoi*
16.6%
*not elsewhere specified or included
AGOA builds on and extends the preferences granted under the United States Generalised System of
Preferences (US GSP), which offers preferences mostly in the form of duty-
600 tariff lines. Under AGOA a further 1 800 tariff lines were added over and above
what is already covered by the GSP, applicable to all AGOA beneficiary countries. AGOA also
eliminates the Competitive Needs Limitations (CNLs) that apply to GSP products and affect other
beneficiaries; this effectively places a cap on imports in each product category above where the
preferences are suspended. The wearing apparel provisions, which apply only to countries that are
1’ and that have fulfilled obligations relating to an apparel visa
" is the terminology used in the AGOA legislation
rel provisions in the context of US-Africa trade
Eckart Naumann
5
000 tariff lines included under the
AGOA provisions. Products covered by the legislation include motor vehicles and certain
components, a variety of agricultural products such as cheese and vegetables, steel, chemical
GOA often translates into
a significant preference margin compared with MFN tariff status, as seen in the apparel examples
ee treatment under AGOA
AGOA GSP
Yes No
Yes No
Yes No
Yes No
AGOA builds on and extends the preferences granted under the United States Generalised System of
-free market access for
800 tariff lines were added over and above
what is already covered by the GSP, applicable to all AGOA beneficiary countries. AGOA also
GSP products and affect other
beneficiaries; this effectively places a cap on imports in each product category above where the
preferences are suspended. The wearing apparel provisions, which apply only to countries that are
’ and that have fulfilled obligations relating to an apparel visa
system, further increase the number of qualifying product categories by adding the garment product
lines.
The US GSP on which AGOA builds is subject to periodic renewal by the US Congress a
various limitations, including quota restrictions and measures where countries and products can be
migrated out of GSP qualification. The GSP was formally conceived on 1 January 1976 under the US
Trade Act of 1976 but was recently allowed to la
(with preferences backdated) by US President Obama during October 2011 through to the end of
July 2013. During this period of uncertainty (and loss of GSP preferences), the AGOA preferences
were of particular benefit to beneficiary countries. The latest extension is again of relatively short
duration, providing little predictability and certainty.
1.2 Country eligibility
The AGOA legislation authorises the US president to designate countries as eligible to r
preferences under the US Trade Act. For this an annual review is undertaken and the list of countries
re-authorised or amended. Currently 41 countries are AGOA eligible, up from 34 at the time that the
Act was passed by the US Congress late in
(already) qualify under the US GSP. All but one of the 48 sub
GSP eligible.
Over the years numerous countries have gained, and lost, AGOA eligibility. For
d'Ivoire was not part of the original group of AGOA beneficiaries and was added in May 2002, but
subsequently lost eligibility in January 2005, only to be reinstated in October 2011. Countries that
have lost eligibility include the Democrati
African Republic (CAR), while other temporary suspensions have included Mali and Guinea.
Madagascar had been until its suspension one of the largest garment exporters under AGOA. These
changes to the country eligibility list underscore not only the unilateral, and ultimately temporary,
nature of AGOA preferences but also give some effect to the preconditions relating to AGOA. These
criteria – as assessed by the US
protection of human and worker rights, efforts to combat corruption, the elimination of barriers to
US trade and investment and the protection and respect for intellectual property rights.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
system, further increase the number of qualifying product categories by adding the garment product
The US GSP on which AGOA builds is subject to periodic renewal by the US Congress a
various limitations, including quota restrictions and measures where countries and products can be
migrated out of GSP qualification. The GSP was formally conceived on 1 January 1976 under the US
Trade Act of 1976 but was recently allowed to lapse for much of 2011, until it was re
(with preferences backdated) by US President Obama during October 2011 through to the end of
July 2013. During this period of uncertainty (and loss of GSP preferences), the AGOA preferences
r benefit to beneficiary countries. The latest extension is again of relatively short
duration, providing little predictability and certainty.
The AGOA legislation authorises the US president to designate countries as eligible to r
preferences under the US Trade Act. For this an annual review is undertaken and the list of countries
authorised or amended. Currently 41 countries are AGOA eligible, up from 34 at the time that the
Act was passed by the US Congress late in 2000. In order to be AGOA eligible, countries also need to
(already) qualify under the US GSP. All but one of the 48 sub-Saharan African countries are currently
Over the years numerous countries have gained, and lost, AGOA eligibility. For
d'Ivoire was not part of the original group of AGOA beneficiaries and was added in May 2002, but
subsequently lost eligibility in January 2005, only to be reinstated in October 2011. Countries that
have lost eligibility include the Democratic Republic of Congo (DRC), Madagascar and the Central
African Republic (CAR), while other temporary suspensions have included Mali and Guinea.
Madagascar had been until its suspension one of the largest garment exporters under AGOA. These
ountry eligibility list underscore not only the unilateral, and ultimately temporary,
nature of AGOA preferences but also give some effect to the preconditions relating to AGOA. These
as assessed by the US – include respect for the rule of law and political pluralism, the
protection of human and worker rights, efforts to combat corruption, the elimination of barriers to
US trade and investment and the protection and respect for intellectual property rights.
rel provisions in the context of US-Africa trade
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6
system, further increase the number of qualifying product categories by adding the garment product
The US GSP on which AGOA builds is subject to periodic renewal by the US Congress and contains
various limitations, including quota restrictions and measures where countries and products can be
migrated out of GSP qualification. The GSP was formally conceived on 1 January 1976 under the US
pse for much of 2011, until it was re-authorised
(with preferences backdated) by US President Obama during October 2011 through to the end of
July 2013. During this period of uncertainty (and loss of GSP preferences), the AGOA preferences
r benefit to beneficiary countries. The latest extension is again of relatively short
The AGOA legislation authorises the US president to designate countries as eligible to receive trade
preferences under the US Trade Act. For this an annual review is undertaken and the list of countries
authorised or amended. Currently 41 countries are AGOA eligible, up from 34 at the time that the
2000. In order to be AGOA eligible, countries also need to
Saharan African countries are currently
Over the years numerous countries have gained, and lost, AGOA eligibility. For example, Côte
d'Ivoire was not part of the original group of AGOA beneficiaries and was added in May 2002, but
subsequently lost eligibility in January 2005, only to be reinstated in October 2011. Countries that
c Republic of Congo (DRC), Madagascar and the Central
African Republic (CAR), while other temporary suspensions have included Mali and Guinea.
Madagascar had been until its suspension one of the largest garment exporters under AGOA. These
ountry eligibility list underscore not only the unilateral, and ultimately temporary,
nature of AGOA preferences but also give some effect to the preconditions relating to AGOA. These
nd political pluralism, the
protection of human and worker rights, efforts to combat corruption, the elimination of barriers to
US trade and investment and the protection and respect for intellectual property rights.
1.3 Eligibility for AGOA's wearing ap
The majority (26 out of 40) of countries currently eligible for AGOA have also qualified for the special
wearing apparel provisions. While the GSP does not include textiles and apparel products, AGOA
makes provision for qualifying countrie
qualifying conditions are met.
For AGOA beneficiary countries to be considered eligible, they need to demonstrate the
establishment of a product ‘visa system’ that is able to monitor and track
textile inputs, and prevent the illegal transhipment of textile goods and materials and the use of
counterfeit documentation through adequate enforcement and verification procedures. There are
two aspects to the AGOA apparel provi
preferences (also known as the ’third
beneficiary countries. These special provisions are only available to countries with a G
Product (GNP) per capita of less than US$1
concession was made to Mauritius in 2008 which as a result also qualifies under the more flexible
fabric rules.2 Namibia and Botswana are also eligib
have been since shortly after the inception of AGOA through a special provision that exempted them
from the GNP rule (see Trade Act of 2002 summary in Annex 1). However, the rule means that
countries like South Africa and the Seychelles do not benefit and are subject to far stricter
requirements around the input materials used in qualifying garments.
2 See Public Law 110-436 of October 2008.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Eligibility for AGOA's wearing apparel provisions
The majority (26 out of 40) of countries currently eligible for AGOA have also qualified for the special
wearing apparel provisions. While the GSP does not include textiles and apparel products, AGOA
makes provision for qualifying countries to ship articles of clothing to the US duty
For AGOA beneficiary countries to be considered eligible, they need to demonstrate the
establishment of a product ‘visa system’ that is able to monitor and track the sale and sourcing of
textile inputs, and prevent the illegal transhipment of textile goods and materials and the use of
counterfeit documentation through adequate enforcement and verification procedures. There are
two aspects to the AGOA apparel provisions: general apparel preferences and special concessionary
preferences (also known as the ’third-country fabric rule’, set out in next section) to less developed
beneficiary countries. These special provisions are only available to countries with a G
GNP) per capita of less than US$1 500 in 1998 as measured by the World Bank, although a
concession was made to Mauritius in 2008 which as a result also qualifies under the more flexible
Namibia and Botswana are also eligible for the special wearing apparel provisions and
have been since shortly after the inception of AGOA through a special provision that exempted them
from the GNP rule (see Trade Act of 2002 summary in Annex 1). However, the rule means that
outh Africa and the Seychelles do not benefit and are subject to far stricter
requirements around the input materials used in qualifying garments.
436 of October 2008.
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The majority (26 out of 40) of countries currently eligible for AGOA have also qualified for the special
wearing apparel provisions. While the GSP does not include textiles and apparel products, AGOA
s to ship articles of clothing to the US duty-free when certain
For AGOA beneficiary countries to be considered eligible, they need to demonstrate the
the sale and sourcing of
textile inputs, and prevent the illegal transhipment of textile goods and materials and the use of
counterfeit documentation through adequate enforcement and verification procedures. There are
sions: general apparel preferences and special concessionary
country fabric rule’, set out in next section) to less developed
beneficiary countries. These special provisions are only available to countries with a Gross National
500 in 1998 as measured by the World Bank, although a
concession was made to Mauritius in 2008 which as a result also qualifies under the more flexible
le for the special wearing apparel provisions and
have been since shortly after the inception of AGOA through a special provision that exempted them
from the GNP rule (see Trade Act of 2002 summary in Annex 1). However, the rule means that
outh Africa and the Seychelles do not benefit and are subject to far stricter
1.4 Apparel Rules of Origin and other apparel provisions under AGOA
AGOA permits clothing made in qualifying African countries to enter the US duty
number of conditions and qualifications. These provisions have been instrumental for large parts of
the African garment industry given the flexibility of the RoO and the substantial pref
that have resulted from exporting duty
There are a number of qualifying conditions under which apparel may enter the US duty
Specific RoO categories are outlined first, followed by the general provisions.
Eleven apparel RoO categories currently qualify under AGOA. By far the largest category in terms of
trade and utilisation of benefits pertains to apparel made from foreign fabric produced in a less
developed country (HTS code 9819.11.12). While 95% of all ap
countries entered the US under AGOA, more than 93% were shipped under the ’third
provision. Apparel made from regional fabric from US or African yarn was the third largest category
in terms of trade volume. Apparel made from fabric or yarn not available in commercial quantities in
the US was the third largest category, even though the latter two accounted for only 7% of qualifying
AGOA apparel exports. The only other category of any significance is apparel m
yarn deemed (by the US) to be in short supply, and contributing 2% to the total in 2011.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Apparel Rules of Origin and other apparel provisions under AGOA
n qualifying African countries to enter the US duty
number of conditions and qualifications. These provisions have been instrumental for large parts of
the African garment industry given the flexibility of the RoO and the substantial pref
that have resulted from exporting duty-free under the legislation.
There are a number of qualifying conditions under which apparel may enter the US duty
Specific RoO categories are outlined first, followed by the general provisions.
even apparel RoO categories currently qualify under AGOA. By far the largest category in terms of
trade and utilisation of benefits pertains to apparel made from foreign fabric produced in a less
developed country (HTS code 9819.11.12). While 95% of all apparel exports from AGOA
countries entered the US under AGOA, more than 93% were shipped under the ’third
provision. Apparel made from regional fabric from US or African yarn was the third largest category
Apparel made from fabric or yarn not available in commercial quantities in
the US was the third largest category, even though the latter two accounted for only 7% of qualifying
AGOA apparel exports. The only other category of any significance is apparel m
yarn deemed (by the US) to be in short supply, and contributing 2% to the total in 2011.
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8
n qualifying African countries to enter the US duty-free subject to a
number of conditions and qualifications. These provisions have been instrumental for large parts of
the African garment industry given the flexibility of the RoO and the substantial preference margins
There are a number of qualifying conditions under which apparel may enter the US duty-free.
even apparel RoO categories currently qualify under AGOA. By far the largest category in terms of
trade and utilisation of benefits pertains to apparel made from foreign fabric produced in a less
parel exports from AGOA-eligible
countries entered the US under AGOA, more than 93% were shipped under the ’third-country fabric’
provision. Apparel made from regional fabric from US or African yarn was the third largest category
Apparel made from fabric or yarn not available in commercial quantities in
the US was the third largest category, even though the latter two accounted for only 7% of qualifying
AGOA apparel exports. The only other category of any significance is apparel made from fabric or
yarn deemed (by the US) to be in short supply, and contributing 2% to the total in 2011.
Table 2 Wearing apparel RoO categories
HTS Code* Product Description / Rules of Origin category
9802.00.8068 Articles assembled from any fabric c
9819.11.03 Apparel assembled from US cut fabric & yarn, further processed
9819.11.06 Apparel cut and assembled from US fabric, yarn & thread
9819.11.09 Apparel from regional fabric from US or African yarn
9819.11.12 Apparel from foreign fabric made in a lesser developed country
9819.11.15 Cashmere sweaters, knit
9819.11.18 Merino wool sweaters, knit
9819.11.21 Apparel from fabric or yarn in short supply
9819.11.24 Apparel from fabric or yarn N/A in commercia
9819.11.27 Hand-loomed, handmade and folklore articles
9819.11.33 Textile articles wholly formed in one or more LDCs
9819.15.10 Apparel from fabric deemed to be in abundant supply (denim). (
* as used for preferential trade pur
accordingly)
Specific provisions relating to apparel exports include a
administrative requirements. The
interlinings of foreign origin provided that the value of such interlinings
trimmings4) does not exceed 25% of the cost of components making up the assembled article.
Otherwise qualifying garments will are also not be ineligible for pr
article contains fibres or yarns that were not wholly formed in the US or in one or more AGOA
eligible countries; this concession applies as long as the weight of the non
yarns does not exceed 10% of the
3 Only a limited number of interlinings are permitted under this provision, and the benefit depends on these not being
available in commercial quantities in the US.
header’. This must be constructed of woven or weft
made filaments. 4 Findings and trimmings include buttons, hooks, zippers, decor
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Table 2 Wearing apparel RoO categories
Product Description / Rules of Origin category
Articles assembled from any fabric cut in the United States
Apparel assembled from US cut fabric & yarn, further processed
Apparel cut and assembled from US fabric, yarn & thread
Apparel from regional fabric from US or African yarn
foreign fabric made in a lesser developed country
Cashmere sweaters, knit-to-shape
Merino wool sweaters, knit-to-shape
Apparel from fabric or yarn in short supply
Apparel from fabric or yarn N/A in commercial quantities
loomed, handmade and folklore articles
Textile articles wholly formed in one or more LDCs
Apparel from fabric deemed to be in abundant supply (denim). (Suspended
* as used for preferential trade purposes (the US tariff schedule was amended
Specific provisions relating to apparel exports include a de minimis (value tolerance) rule and certain
administrative requirements. The de minimis rule allows a qualifying article to contain certai
origin provided that the value of such interlinings
) does not exceed 25% of the cost of components making up the assembled article.
Otherwise qualifying garments will are also not be ineligible for preferences simply because the
article contains fibres or yarns that were not wholly formed in the US or in one or more AGOA
eligible countries; this concession applies as long as the weight of the non
yarns does not exceed 10% of the weight of the article (this threshold was increased from 7%
Only a limited number of interlinings are permitted under this provision, and the benefit depends on these not being
available in commercial quantities in the US. The permitted interlinings are a chest type plate, a ’hymopiece’ or ‘sleeve
of woven or weft-inserted warp knit construction and be of coarse animal hair or man
Findings and trimmings include buttons, hooks, zippers, decorative lace trip and certain elastic strips.
rel provisions in the context of US-Africa trade
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9
Suspended)
poses (the US tariff schedule was amended
(value tolerance) rule and certain
rule allows a qualifying article to contain certain
origin provided that the value of such interlinings3 (and findings and
) does not exceed 25% of the cost of components making up the assembled article.
eferences simply because the
article contains fibres or yarns that were not wholly formed in the US or in one or more AGOA-
eligible countries; this concession applies as long as the weight of the non-originating fibres and
weight of the article (this threshold was increased from 7%
Only a limited number of interlinings are permitted under this provision, and the benefit depends on these not being
are a chest type plate, a ’hymopiece’ or ‘sleeve
of coarse animal hair or man-
ative lace trip and certain elastic strips.
previously). The AGOA legislation was also amended under the AGOA III legislation
collars, cuffs, drawstrings, shoulder pads, waistbands, belts attached to garments, straps with elasti
and elbow patches not produced in an AGOA eligible country (see summary of AGOA Acceleration
Act of 2004 in Annex 1).
Administrative requirements relate to record keeping and the certification process. Exporters are
obliged to keep records relating to the materials used in the production of qualifying exports for at
least two years after the export of such products. These goods must also be accompanied by a
special 'certificate of origin'.
Abundant supply provisions were introduced under the AGOA
Investment Incentive Act of 2006) and sought to declare certain yarns and fabrics, upon application
by any interested party, as being produced in commercial quantities within the (AGOA) region and
thus available to be used in the production of AGOA
require exporters under AGOA to first utilise this available supply
determined as being available – prior to exporting garments made from foreign fabric inputs
the third-country fabric rule. At the time of this legislative amendment, denim fabric was found to be
available in commercial quantities (30 million square meter equivalents annually, as from 1 October
2006), although this denim fabric determinatio
While AGOA does not include textiles
fabrics. Ethnic printed fabrics were added to this provision by the AGOA III legislative amendments.
These provisions are more technically and collectively known as ‘Category 9’ articles (Categories 1
relate to mainstream garments produced through normal commercial means). Category 9 eligibility
is granted on an application basis and requires a country to be compliant
system (or be in the process of implementing one, with formal application on the apparel eligibility
status having been submitted). Currently there are 20 countries that are eligible for Category 9
benefits (out of 27 that qualify under the wearing apparel provisions).
With respect to the (currently) third largest apparel trade category by value
third-country fabric that cannot be supplied in commercial quantities in a timely manner by US
supplier (HTS 9819.11.24), such a determination (on yarn or fabric) is made by the Committee for the
5 An overview of AGOA legislative changes is provided as an annex
6 See Public Law 110-436 of 16 October 2008
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
previously). The AGOA legislation was also amended under the AGOA III legislation
collars, cuffs, drawstrings, shoulder pads, waistbands, belts attached to garments, straps with elasti
and elbow patches not produced in an AGOA eligible country (see summary of AGOA Acceleration
Administrative requirements relate to record keeping and the certification process. Exporters are
ing to the materials used in the production of qualifying exports for at
least two years after the export of such products. These goods must also be accompanied by a
Abundant supply provisions were introduced under the AGOA IV legislation (see the Africa
Investment Incentive Act of 2006) and sought to declare certain yarns and fabrics, upon application
by any interested party, as being produced in commercial quantities within the (AGOA) region and
n the production of AGOA-eligible goods. The legislation would then
require exporters under AGOA to first utilise this available supply – in the quantity previously
prior to exporting garments made from foreign fabric inputs
country fabric rule. At the time of this legislative amendment, denim fabric was found to be
available in commercial quantities (30 million square meter equivalents annually, as from 1 October
2006), although this denim fabric determination was subsequently scrapped in 2008
While AGOA does not include textiles per se, an exception is made for certain folklore and handmade
fabrics. Ethnic printed fabrics were added to this provision by the AGOA III legislative amendments.
are more technically and collectively known as ‘Category 9’ articles (Categories 1
relate to mainstream garments produced through normal commercial means). Category 9 eligibility
is granted on an application basis and requires a country to be compliant with the AGOA apparel visa
system (or be in the process of implementing one, with formal application on the apparel eligibility
status having been submitted). Currently there are 20 countries that are eligible for Category 9
y under the wearing apparel provisions).
With respect to the (currently) third largest apparel trade category by value
country fabric that cannot be supplied in commercial quantities in a timely manner by US
.24), such a determination (on yarn or fabric) is made by the Committee for the
An overview of AGOA legislative changes is provided as an annex
October 2008.
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Eckart Naumann
10
previously). The AGOA legislation was also amended under the AGOA III legislation5 to include
collars, cuffs, drawstrings, shoulder pads, waistbands, belts attached to garments, straps with elastic,
and elbow patches not produced in an AGOA eligible country (see summary of AGOA Acceleration
Administrative requirements relate to record keeping and the certification process. Exporters are
ing to the materials used in the production of qualifying exports for at
least two years after the export of such products. These goods must also be accompanied by a
IV legislation (see the Africa
Investment Incentive Act of 2006) and sought to declare certain yarns and fabrics, upon application
by any interested party, as being produced in commercial quantities within the (AGOA) region and
eligible goods. The legislation would then
in the quantity previously
prior to exporting garments made from foreign fabric inputs under
country fabric rule. At the time of this legislative amendment, denim fabric was found to be
available in commercial quantities (30 million square meter equivalents annually, as from 1 October
n was subsequently scrapped in 20086.
, an exception is made for certain folklore and handmade
fabrics. Ethnic printed fabrics were added to this provision by the AGOA III legislative amendments.
are more technically and collectively known as ‘Category 9’ articles (Categories 1-8
relate to mainstream garments produced through normal commercial means). Category 9 eligibility
with the AGOA apparel visa
system (or be in the process of implementing one, with formal application on the apparel eligibility
status having been submitted). Currently there are 20 countries that are eligible for Category 9
With respect to the (currently) third largest apparel trade category by value – apparel made from
country fabric that cannot be supplied in commercial quantities in a timely manner by US
.24), such a determination (on yarn or fabric) is made by the Committee for the
Implementation of Textile Agreements (CITA). Under the AGOA IV legislation specific benefits or
categories may be withdrawn again where it is later found that the process to re
restrictions (and determine commercial non
Under AGOA, the US President is authorised to proclaim duty
apparel that is both cut (or knit-to
from fabric or yarns not formed in the United States or a beneficiary country, if the president has
determined that such yarns or fabrics cannot be supplied by the domestic industry in commercial
quantities in a timely manner.
1.5 AGOA apparel quotas
While AGOA as a general rule removes quotas on eligible goods (tariff
sensitive agricultural products), the wearing apparel provisions remain subject to a formal quota
regime. This quota is based on the
expressed as a volumetric measure (square meter equivalent
legislation (as amended in 2007) increased this cap to 7% of total US apparel imports, with a
quota of 3.5% placed on articles of apparel that utilise the ‘third
With growing US apparel imports (from all sources) over the years, the AGOA quota has grown
significantly in absolute terms. Some changes to the AGOA leg
threshold. The AGOA quota year runs from October to September of each year and the quota
determination is made based on the previous annual period's US imports. In the October 2001 to
September 2002 period, the AGOA q
did not differentiate between RoO categories in the application of the quota). The AGOA legislation
initially set the cap at 1.5% for the 2000/2001 quota period, to be increased in equal incre
3.5%. As indicated above, later legislative amendments increased the cap to 7%, although the LDC
sub-quota remains at 3.5%. In the 2011/2012 quota period (ending end September 2012) the quota
stood at 1.877 billion SME while the sub
In terms of quota effectiveness, the trade data shows that quota utilisation rates are declining, and
not once did the quota ceiling become an effective barrier to preferential trade under AGOA. In
2004/2005, the period when textile and apparel quotas were phased out under MFA, combined
7 See Public Law 106-200 of May 18, 2000.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Implementation of Textile Agreements (CITA). Under the AGOA IV legislation specific benefits or
categories may be withdrawn again where it is later found that the process to re
restrictions (and determine commercial non-availability) was subject to fraud.
Under AGOA, the US President is authorised to proclaim duty-free and quota
to-shape) and sewn or otherwise assembled in beneficiary countries
from fabric or yarns not formed in the United States or a beneficiary country, if the president has
determined that such yarns or fabrics cannot be supplied by the domestic industry in commercial
While AGOA as a general rule removes quotas on eligible goods (tariff-rate quotas remain for certain
sensitive agricultural products), the wearing apparel provisions remain subject to a formal quota
regime. This quota is based on the aggregate imports into the US of apparel from all sources and is
expressed as a volumetric measure (square meter equivalent – SME) rather than by value. The AGOA
legislation (as amended in 2007) increased this cap to 7% of total US apparel imports, with a
quota of 3.5% placed on articles of apparel that utilise the ‘third-country fabric’ provisions.
With growing US apparel imports (from all sources) over the years, the AGOA quota has grown
significantly in absolute terms. Some changes to the AGOA legislation also increased the percentage
threshold. The AGOA quota year runs from October to September of each year and the quota
determination is made based on the previous annual period's US imports. In the October 2001 to
September 2002 period, the AGOA quota was set at 313 million SME (the original AGOA legislation
did not differentiate between RoO categories in the application of the quota). The AGOA legislation
initially set the cap at 1.5% for the 2000/2001 quota period, to be increased in equal incre
3.5%. As indicated above, later legislative amendments increased the cap to 7%, although the LDC
quota remains at 3.5%. In the 2011/2012 quota period (ending end September 2012) the quota
stood at 1.877 billion SME while the sub-quota for LDCs was set at half that amount.
In terms of quota effectiveness, the trade data shows that quota utilisation rates are declining, and
not once did the quota ceiling become an effective barrier to preferential trade under AGOA. In
extile and apparel quotas were phased out under MFA, combined
May 18, 2000.
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Eckart Naumann
11
Implementation of Textile Agreements (CITA). Under the AGOA IV legislation specific benefits or
categories may be withdrawn again where it is later found that the process to remove the
availability) was subject to fraud.
free and quota-free benefits for
d in beneficiary countries
from fabric or yarns not formed in the United States or a beneficiary country, if the president has
determined that such yarns or fabrics cannot be supplied by the domestic industry in commercial
rate quotas remain for certain
sensitive agricultural products), the wearing apparel provisions remain subject to a formal quota
aggregate imports into the US of apparel from all sources and is
SME) rather than by value. The AGOA
legislation (as amended in 2007) increased this cap to 7% of total US apparel imports, with a sub-
country fabric’ provisions.
With growing US apparel imports (from all sources) over the years, the AGOA quota has grown
islation also increased the percentage
threshold. The AGOA quota year runs from October to September of each year and the quota
determination is made based on the previous annual period's US imports. In the October 2001 to
uota was set at 313 million SME (the original AGOA legislation7
did not differentiate between RoO categories in the application of the quota). The AGOA legislation
initially set the cap at 1.5% for the 2000/2001 quota period, to be increased in equal increments to
3.5%. As indicated above, later legislative amendments increased the cap to 7%, although the LDC
quota remains at 3.5%. In the 2011/2012 quota period (ending end September 2012) the quota
was set at half that amount.
In terms of quota effectiveness, the trade data shows that quota utilisation rates are declining, and
not once did the quota ceiling become an effective barrier to preferential trade under AGOA. In
extile and apparel quotas were phased out under MFA, combined
utilisation reached 37.6% while utilisation of the LDC sub
fabrics) was 68.1%. Since then, quota utilisation declined to 12% for the 2010/2011 period (at t
of writing, full-year data for the 2011/2012 quota year was not yet available). Fig. 1 below shows the
changes in the AGOA apparel quota (and LDC third
share (in nominal and relative terms) of quota utilisat
under the AGOA wearing apparel provisions (third
place in the other RoO categories. With aggregate quota utilisation at the 10
sub-quota utilisation twice that), AGOA's apparel quotas remain
exporters.
Fig. 1 AGOA quota utilisation 2002
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2002 2003 2004 2005
Unit: Square Meter Equivalent (SME) million Source: Office for Textiles and Apparel (2001
Total Quota
Utilisation: General Quota
Quota Utilisation
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
utilisation reached 37.6% while utilisation of the LDC sub-quota (for exports using third
fabrics) was 68.1%. Since then, quota utilisation declined to 12% for the 2010/2011 period (at t
year data for the 2011/2012 quota year was not yet available). Fig. 1 below shows the
changes in the AGOA apparel quota (and LDC third-country fabric sub-quota), and the declining
share (in nominal and relative terms) of quota utilisation. Almost the entire quota utilisation falls
under the AGOA wearing apparel provisions (third-country fabric), with little apparel trade taking
place in the other RoO categories. With aggregate quota utilisation at the 10
isation twice that), AGOA's apparel quotas remain de facto
AGOA quota utilisation 2002-2012
2005 2006 2007 2008 2009 2010
Unit: Square Meter Equivalent (SME) million Source: Office for Textiles and Apparel (2001
LDC Sub-Quota
Utilisation: 3rd Country Fabric Quota
rel provisions in the context of US-Africa trade
Eckart Naumann
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quota (for exports using third-country
fabrics) was 68.1%. Since then, quota utilisation declined to 12% for the 2010/2011 period (at time
year data for the 2011/2012 quota year was not yet available). Fig. 1 below shows the
quota), and the declining
ion. Almost the entire quota utilisation falls
country fabric), with little apparel trade taking
place in the other RoO categories. With aggregate quota utilisation at the 10-12% mark (and LDC
of no consequence to
2011 2012
Unit: Square Meter Equivalent (SME) million Source: Office for Textiles and Apparel (2001-2012)
2. Apparel trade under AGOA and pre
Preferential US market access under AGOA has for many African countries bee
the domestic apparel manufacturing industry. Over the 1996
apparel was exported to the US from AGOA beneficiary countries, of which US$11.5 billion (since
2001) qualified for duty-free AGOA pref
under AGOA preference.
Despite the substantial benefits accruing to traders in the US and Africa when utilising these
preferences, from the US perspective AGOA makes up only a very small share of
imports under preference, let alone its apparel imports from all sources. Total US apparel imports
(based on apparel chapters HTS 61+62) in 1996 were worth US$37.8 billion and more than doubled
to US$76.5 billion in 2011. US imports under
imports), growing almost sixfold to US$13.8 billion in 2011 (or 18% of total imports). The largest
beneficiaries of US apparel preferences (measured in terms of volume of trade under preference)
was the Central America Free Trade Agreement (FTA) (DR
trade, followed by the North American Free Trade Agreement (NAFTA) (5%) and West Bank/Gaza
preferences (1.3%). African countries under AGOA for the year 2011 collec
largest share of apparel preference receipts (1.3%). AGOA's share of total US apparel imports was
0.6% in 2001, and 2.7% of total US apparel preference receipts.
The graph below shows that the share of preferential treatment on
rapidly between 1999 (11% of total) and 2002 (22.5% of total). In the period following expiry of the
MFA quotas (2005 to present), preferential apparel imports as a share of total apparel imports into
the US decreased from 24.9% to 18.1% in 2011. This is mainly due to the rapid rise in imports from
South-East Asian countries, which generally have no preferential access into the US market.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Apparel trade under AGOA and pre-AGOA
Preferential US market access under AGOA has for many African countries bee
the domestic apparel manufacturing industry. Over the 1996-2011 period, US$15.7 billion worth of
apparel was exported to the US from AGOA beneficiary countries, of which US$11.5 billion (since
free AGOA preferences. Since 2001, 88% of all apparel export was shipped
Despite the substantial benefits accruing to traders in the US and Africa when utilising these
preferences, from the US perspective AGOA makes up only a very small share of
imports under preference, let alone its apparel imports from all sources. Total US apparel imports
(based on apparel chapters HTS 61+62) in 1996 were worth US$37.8 billion and more than doubled
to US$76.5 billion in 2011. US imports under preference were US$2.4 billion in 1996 (or 6.3% of total
imports), growing almost sixfold to US$13.8 billion in 2011 (or 18% of total imports). The largest
beneficiaries of US apparel preferences (measured in terms of volume of trade under preference)
the Central America Free Trade Agreement (FTA) (DR-CAFTA) with a 7.8% share of preferential
trade, followed by the North American Free Trade Agreement (NAFTA) (5%) and West Bank/Gaza
preferences (1.3%). African countries under AGOA for the year 2011 collectively make up the fourth
largest share of apparel preference receipts (1.3%). AGOA's share of total US apparel imports was
0.6% in 2001, and 2.7% of total US apparel preference receipts.
The graph below shows that the share of preferential treatment on apparel imports into the US grew
rapidly between 1999 (11% of total) and 2002 (22.5% of total). In the period following expiry of the
MFA quotas (2005 to present), preferential apparel imports as a share of total apparel imports into
24.9% to 18.1% in 2011. This is mainly due to the rapid rise in imports from
East Asian countries, which generally have no preferential access into the US market.
rel provisions in the context of US-Africa trade
Eckart Naumann
13
Preferential US market access under AGOA has for many African countries been the primary driver of
2011 period, US$15.7 billion worth of
apparel was exported to the US from AGOA beneficiary countries, of which US$11.5 billion (since
erences. Since 2001, 88% of all apparel export was shipped
Despite the substantial benefits accruing to traders in the US and Africa when utilising these
preferences, from the US perspective AGOA makes up only a very small share of total US apparel
imports under preference, let alone its apparel imports from all sources. Total US apparel imports
(based on apparel chapters HTS 61+62) in 1996 were worth US$37.8 billion and more than doubled
preference were US$2.4 billion in 1996 (or 6.3% of total
imports), growing almost sixfold to US$13.8 billion in 2011 (or 18% of total imports). The largest
beneficiaries of US apparel preferences (measured in terms of volume of trade under preference)
CAFTA) with a 7.8% share of preferential
trade, followed by the North American Free Trade Agreement (NAFTA) (5%) and West Bank/Gaza
tively make up the fourth
largest share of apparel preference receipts (1.3%). AGOA's share of total US apparel imports was
apparel imports into the US grew
rapidly between 1999 (11% of total) and 2002 (22.5% of total). In the period following expiry of the
MFA quotas (2005 to present), preferential apparel imports as a share of total apparel imports into
24.9% to 18.1% in 2011. This is mainly due to the rapid rise in imports from
East Asian countries, which generally have no preferential access into the US market.
Fig. 2 Global apparel exports (preferential versus non
based on HTS chapters 61+62), with percentages indicating share of exports entering under
a US preference scheme
AGOA has had a significant impact on African apparel exports to the US. A review of these exports
for the period from1996 onwards (AGOA apparel preferences only started in 2001, with the first
countries qualifying under the visa programme) reveals a number of interesting trends. The following
graph provides an overview of apparel exports from AGOA
2011.
Aggregate apparel exports to the US from AGOA countries were valued at US$355 million in 1996.
While the graph uses the ‘AGOA group’ (as appropriate for each year) as the reference point, this
figure very closely resembles apparel exports
period, and which were valued at US$360 million in 1996, growing to US$859 million in 2011. In that
year the only significant non-AGOA SSA exporter of apparel to the US was Madagascar, which lost its
beneficiary status at the end of 2009. Madagascar's exports to the US were worth US$40 million in
2011 (down from US$209 million in 2009).
6.3%
7.3%
7.9%11%
12.9%
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1996 1997 1998 1999 2000
Total US apparel imports No preferences claimed
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Global apparel exports (preferential versus non-preferential) to the US 19
based on HTS chapters 61+62), with percentages indicating share of exports entering under
AGOA has had a significant impact on African apparel exports to the US. A review of these exports
wards (AGOA apparel preferences only started in 2001, with the first
countries qualifying under the visa programme) reveals a number of interesting trends. The following
graph provides an overview of apparel exports from AGOA-eligible countries for the per
Aggregate apparel exports to the US from AGOA countries were valued at US$355 million in 1996.
While the graph uses the ‘AGOA group’ (as appropriate for each year) as the reference point, this
figure very closely resembles apparel exports from the Sub-Saharan Africa group (SSA) over the same
period, and which were valued at US$360 million in 1996, growing to US$859 million in 2011. In that
AGOA SSA exporter of apparel to the US was Madagascar, which lost its
eneficiary status at the end of 2009. Madagascar's exports to the US were worth US$40 million in
2011 (down from US$209 million in 2009).
22.5% 25.3%25.9%
26.4%
24.9%22.7% 20.5%
20.1%
2001 2002 2003 2004 2005 2006 2007 2008
US$ million Source: Office for Textiles and Apparel (2012)
No preferences claimed Preferences claimed AGOA preferences
rel provisions in the context of US-Africa trade
Eckart Naumann
14
preferential) to the US 1996-2011 (data
based on HTS chapters 61+62), with percentages indicating share of exports entering under
AGOA has had a significant impact on African apparel exports to the US. A review of these exports
wards (AGOA apparel preferences only started in 2001, with the first
countries qualifying under the visa programme) reveals a number of interesting trends. The following
eligible countries for the period 1996 -
Aggregate apparel exports to the US from AGOA countries were valued at US$355 million in 1996.
While the graph uses the ‘AGOA group’ (as appropriate for each year) as the reference point, this
Saharan Africa group (SSA) over the same
period, and which were valued at US$360 million in 1996, growing to US$859 million in 2011. In that
AGOA SSA exporter of apparel to the US was Madagascar, which lost its
eneficiary status at the end of 2009. Madagascar's exports to the US were worth US$40 million in
18.8%
17.8%
18.1%
2009 2010 2011
US$ million Source: Office for Textiles and Apparel (2012)
AGOA preferences
Fig. 3 Apparel exports from AGOA beneficiary countries to the US 1996
chapters 61+62)
African countries' growth in apparel exports to the US predates the inception of AGOA and by the
time that the legislation was enacted, trade was already on an upward trajectory. In the year (2000)
prior to AGOA's apparel benefits becoming available to b
SSA countries were valued at US$729 million. During 2001, the first beneficiary countries earned
their duty-free status by meeting the AGOA apparel visa programme requirements and with this
apparel exports under AGOA accounted for US$583 million, with a further US$264 million not
claiming preferences (mostly due to not having qualified for apparel preferences, or not meeting the
apparel RoO). In that year, some leading exporters (for example Lesotho) only met the w
apparel visa conditions in April of that year, or later. Kenya and Mauritius were the first to comply
with the administrative ‘visa system’ formalities on 18 January 2001.
The data shows that the value gap between apparel exports that utilise AGOA'
waiver (applicable to LDCs, Namibia, Botswana and, more recently, also Mauritius) and total apparel
exports from AGOA beneficiaries to the US has declined over the years. In 2002
apparel exports were made from third
8 One year previously, in 2001, only 28% used third
the AGOA apparel visa requirements, 2002 is used as a more useful year for comparative purposes.
0
200
400
600
800
1000
1200
1400
1600
1800
1996 1997 1998 1999 2000
Total AGOA apparel exports
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Apparel exports from AGOA beneficiary countries to the US 1996-2011 (data based on HTS
African countries' growth in apparel exports to the US predates the inception of AGOA and by the
time that the legislation was enacted, trade was already on an upward trajectory. In the year (2000)
prior to AGOA's apparel benefits becoming available to beneficiary countries, apparel exports from
SSA countries were valued at US$729 million. During 2001, the first beneficiary countries earned
free status by meeting the AGOA apparel visa programme requirements and with this
GOA accounted for US$583 million, with a further US$264 million not
claiming preferences (mostly due to not having qualified for apparel preferences, or not meeting the
apparel RoO). In that year, some leading exporters (for example Lesotho) only met the w
apparel visa conditions in April of that year, or later. Kenya and Mauritius were the first to comply
with the administrative ‘visa system’ formalities on 18 January 2001.
The data shows that the value gap between apparel exports that utilise AGOA'
waiver (applicable to LDCs, Namibia, Botswana and, more recently, also Mauritius) and total apparel
exports from AGOA beneficiaries to the US has declined over the years. In 2002
apparel exports were made from third-country fabric while in 2011 this share had increased to 92%.
One year previously, in 2001, only 28% used third-country fabric but given that numerous countries had not yet met
the AGOA apparel visa requirements, 2002 is used as a more useful year for comparative purposes.
2001 2002 2003 2004 2005 2006 2007 2008
US$ million Source: Office for Textiles and Apparel (2012)
AGOA apparel exports No preferences claimed AGOA Apparel using 3rd country fabric
rel provisions in the context of US-Africa trade
Eckart Naumann
15
2011 (data based on HTS
African countries' growth in apparel exports to the US predates the inception of AGOA and by the
time that the legislation was enacted, trade was already on an upward trajectory. In the year (2000)
eneficiary countries, apparel exports from
SSA countries were valued at US$729 million. During 2001, the first beneficiary countries earned
free status by meeting the AGOA apparel visa programme requirements and with this
GOA accounted for US$583 million, with a further US$264 million not
claiming preferences (mostly due to not having qualified for apparel preferences, or not meeting the
apparel RoO). In that year, some leading exporters (for example Lesotho) only met the wearing
apparel visa conditions in April of that year, or later. Kenya and Mauritius were the first to comply
The data shows that the value gap between apparel exports that utilise AGOA's third-country fabric
waiver (applicable to LDCs, Namibia, Botswana and, more recently, also Mauritius) and total apparel
exports from AGOA beneficiaries to the US has declined over the years. In 20028, 55% of AGOA
ntry fabric while in 2011 this share had increased to 92%.
country fabric but given that numerous countries had not yet met
the AGOA apparel visa requirements, 2002 is used as a more useful year for comparative purposes.
2009 2010 2011
US$ million Source: Office for Textiles and Apparel (2012)
AGOA Apparel using 3rd country fabric
This highlights the fact that without flexible sourcing
AGOA group – little US-bound apparel trade takes place. Evidence from the small number of
countries that do not benefit from the third
compelling: US apparel exports decreased by 98% between 1996 and 2011 and are now worth a little
over US$ 1 million per annum. That neighbouring Lesotho and Sw
400 times more apparel to the US last year merely re
Overall, in the period to 2004, African apparel exports to the US under AGOA grew rapidly reaching
US$1 753 million with over 92% of that figure
attributed to developments in the global trading system, where the MFA quota system was due to
be phased out under the provisions of the WTO Agreement on Textiles and Clothing (ATC). The last
and most important tranche of quotas had to be removed by 1 January 2005; this means that the
facto protection provided to competing countries exporting textiles and apparel to the US (including
those situated in Africa, and which were not quota
With respect to AGOA apparel exports by category, the following table provides an overview of the
leading 15 apparel items by value that were exported to the US during 2011. Men's and women's
cotton trousers and men's shirts were the lea
was shipped in that year, or 45% of total AGOA apparel exports in that year (total under AGOA:
US$849 million). The preference margins, as shown in the table, are significant in most categories,
ranging from 14.9% to 32%, giving exporters under AGOA a sizeable competitive advantage.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
This highlights the fact that without flexible sourcing – potential access to fabric made outside of the
bound apparel trade takes place. Evidence from the small number of
untries that do not benefit from the third-country fabric concession – notably South Africa
compelling: US apparel exports decreased by 98% between 1996 and 2011 and are now worth a little
million per annum. That neighbouring Lesotho and Swaziland combined exported almost
400 times more apparel to the US last year merely re-enforces this point.
Overall, in the period to 2004, African apparel exports to the US under AGOA grew rapidly reaching
753 million with over 92% of that figure qualifying under AGOA. Some of the growth can be
attributed to developments in the global trading system, where the MFA quota system was due to
be phased out under the provisions of the WTO Agreement on Textiles and Clothing (ATC). The last
tant tranche of quotas had to be removed by 1 January 2005; this means that the
protection provided to competing countries exporting textiles and apparel to the US (including
those situated in Africa, and which were not quota-constrained) came to the end as well.
With respect to AGOA apparel exports by category, the following table provides an overview of the
leading 15 apparel items by value that were exported to the US during 2011. Men's and women's
cotton trousers and men's shirts were the leading three categories and a combined US$384 million
was shipped in that year, or 45% of total AGOA apparel exports in that year (total under AGOA:
US$849 million). The preference margins, as shown in the table, are significant in most categories,
rom 14.9% to 32%, giving exporters under AGOA a sizeable competitive advantage.
rel provisions in the context of US-Africa trade
Eckart Naumann
16
potential access to fabric made outside of the
bound apparel trade takes place. Evidence from the small number of
notably South Africa – is
compelling: US apparel exports decreased by 98% between 1996 and 2011 and are now worth a little
aziland combined exported almost
Overall, in the period to 2004, African apparel exports to the US under AGOA grew rapidly reaching
qualifying under AGOA. Some of the growth can be
attributed to developments in the global trading system, where the MFA quota system was due to
be phased out under the provisions of the WTO Agreement on Textiles and Clothing (ATC). The last
tant tranche of quotas had to be removed by 1 January 2005; this means that the de
protection provided to competing countries exporting textiles and apparel to the US (including
the end as well.
With respect to AGOA apparel exports by category, the following table provides an overview of the
leading 15 apparel items by value that were exported to the US during 2011. Men's and women's
ding three categories and a combined US$384 million
was shipped in that year, or 45% of total AGOA apparel exports in that year (total under AGOA:
US$849 million). The preference margins, as shown in the table, are significant in most categories,
rom 14.9% to 32%, giving exporters under AGOA a sizeable competitive advantage.
Table 3 The 15 leading apparel products exported to the US under AGOA in 2011
Product tariff
code
Product description
62034240 Men's trousers / shorts, not knitted or crocheted,
of cotton, <15% by weight of down, etc.
62046240 Women's or girls' trousers, breeches and shorts,
not knitted or crocheted, of cotton, nesoi
62052020 Men's shirts, not knitted or crocheted, of
cotton, nesoi
61103030 Sweaters, pullovers and similar articles, knitted
or crocheted, of manmade fibres, nesoi
61102020 Sweaters, knitted or crocheted, of cotton, nes
61046220 Women's trousers/shorts, knitted or crocheted,
of cotton
61046320 Women's trousers, breeches and shorts, knitted
or crocheted, of synthetic fibres, nesoi
61051000 Men's or boys' shirts, knitted or croch
cotton
61052020 Men's shirts, knitted or crocheted, of manmade
fibres, nesoi
61034315 Men's trousers, breeches and shorts, knitted or
crocheted, of synthetic fibres, nesoi
61099010 T-shirts, singlets, tank t
garments, knitted or crocheted, of man
fibres
61091000 T-shirts, singlets, tank tops and similar
garments, knitted or crocheted, of cotton
62046335 Women's trousers, breeches and shorts, not
knitted or crocheted, of synthetic fibres, nesoi
62092030 Babies' trousers, breeches and shorts, except
those imported as parts of sets, not knitted or
crocheted, of cotton
62034340 Men's trousers, breeches & shorts, of synthetic
fibres, <15% weight down etc. < 36% weight
wool
61023020 Women's overcoats, capes, windbreakers and
similar articles, knitted or crocheted, of
manmade fibres, nesoi
Source: US International Trade Commission
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
The 15 leading apparel products exported to the US under AGOA in 2011
Product description MFN
tariff
AGOA
Men's trousers / shorts, not knitted or crocheted,
of cotton, <15% by weight of down, etc.
16.6
%
Y
Women's or girls' trousers, breeches and shorts,
not knitted or crocheted, of cotton, nesoi
16.6
%
Y
Men's shirts, not knitted or crocheted, of 19.7
%
Y
Sweaters, pullovers and similar articles, knitted
or crocheted, of manmade fibres, nesoi
32% Y
Sweaters, knitted or crocheted, of cotton, nesoi 16.5
%
Y
Women's trousers/shorts, knitted or crocheted, 14.9
%
Y
Women's trousers, breeches and shorts, knitted
or crocheted, of synthetic fibres, nesoi
28.2
%
Y
Men's or boys' shirts, knitted or crocheted, of 19.7
%
Y
Men's shirts, knitted or crocheted, of manmade 32% Y
Men's trousers, breeches and shorts, knitted or
crocheted, of synthetic fibres, nesoi
28.2
%
Y
shirts, singlets, tank tops and similar
garments, knitted or crocheted, of man-made
32% Y
shirts, singlets, tank tops and similar
garments, knitted or crocheted, of cotton
16.5
%
Y
Women's trousers, breeches and shorts, not
ed, of synthetic fibres, nesoi
28.6
%
Y
Babies' trousers, breeches and shorts, except
those imported as parts of sets, not knitted or
crocheted, of cotton
14.9
%
Y
Men's trousers, breeches & shorts, of synthetic
ght down etc. < 36% weight
27.9
%
Y
Women's overcoats, capes, windbreakers and
similar articles, knitted or crocheted, of
manmade fibres, nesoi
28.2
%
Y
Source: US International Trade Commission
rel provisions in the context of US-Africa trade
Eckart Naumann
17
The 15 leading apparel products exported to the US under AGOA in 2011
GSP US$ value
(million)
N 141
N 126
N 117
N 73
N 62
N 49
N 41
N 31
N 28
N 26
N 18
N 17
N 15
N 12
N 10
N 9
A further observation relates to the
any significant value to the US, compared to 1996. In 1996, 10 countries exported apparel valued at
more than US$1 million to the US (worth a combined US$357 million) while in 2011, that number
had (only) increased by one to 11
beneficiary). The value of US apparel exports by this group has increased to US$896 million. As
shown in the table below, only one country (Zimbabwe) is no longer in the 1996 group (its apparel
exports to the US having dropped by 99%), while Ethiopia and Ghana are now part of this group with
the former having increased its apparel exports by over 2
98% of its US export market for apparel; the country does n
apparel provisions.
Table 4 Leading apparel exporters to the US (>US$ 1 million) 1996 and 2011
Country 1996 US exports
US$ (actual)
Lesotho 64 856 744
Kenya 27 122 326
Mauritius 164 724 293
Swaziland 11 449 761
Madagascar 11 005 132
Botswana 7 056 785
Malawi 1 272 405
Ethiopia 426 066
Tanzania 4 106 032
Ghana 875 972
South Africa 60 353 761
Zimbabwe 4 874 867
Fields marked in bold >
US$ 1 million
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
A further observation relates to the number of SSA countries in 2011 that were exporting apparel of
any significant value to the US, compared to 1996. In 1996, 10 countries exported apparel valued at
more than US$1 million to the US (worth a combined US$357 million) while in 2011, that number
had (only) increased by one to 11 countries (including Madagascar, which is no longer an AGOA
beneficiary). The value of US apparel exports by this group has increased to US$896 million. As
shown in the table below, only one country (Zimbabwe) is no longer in the 1996 group (its apparel
xports to the US having dropped by 99%), while Ethiopia and Ghana are now part of this group with
the former having increased its apparel exports by over 2 000% over this period. South Africa lost
98% of its US export market for apparel; the country does not benefit from the AGOA third
Leading apparel exporters to the US (>US$ 1 million) 1996 and 2011
1996 US exports Country 2011 US exports
US$ (actual)
Percentage change
1996
Lesotho 315 323 323 + 386 %
Kenya 260 539 092 + 861 %
Mauritius 156 897 340 -5 %
Swaziland 76 835 846 + 571 %
Madagascar* 39 833 585 + 262 %
Botswana 15 475 230 + 119 %
Malawi 13 487 971 + 960 %
Ethiopia 10 013 286 + 2 250 %
Tanzania 5 282 679 + 29 %
Ghana 1 575 748 + 80 %
South Africa 1 069 733 -98 %
Zimbabwe 59 519 -99 %
* Madagascar lost AGOA eligibility at the end of 2009 and
above trade flows took place under normal tariff relations. In
2009, its apparel exports to the US were worth US$209 million.
rel provisions in the context of US-Africa trade
Eckart Naumann
18
at were exporting apparel of
any significant value to the US, compared to 1996. In 1996, 10 countries exported apparel valued at
more than US$1 million to the US (worth a combined US$357 million) while in 2011, that number
countries (including Madagascar, which is no longer an AGOA
beneficiary). The value of US apparel exports by this group has increased to US$896 million. As
shown in the table below, only one country (Zimbabwe) is no longer in the 1996 group (its apparel
xports to the US having dropped by 99%), while Ethiopia and Ghana are now part of this group with
000% over this period. South Africa lost
ot benefit from the AGOA third-country
Leading apparel exporters to the US (>US$ 1 million) 1996 and 2011
Percentage change
1996-2011
+ 386 %
+ 861 %
5 %
+ 571 %
+ 262 %
+ 119 %
+ 960 %
+ 2 250 %
+ 29 %
+ 80 %
98 %
99 %
* Madagascar lost AGOA eligibility at the end of 2009 and
above trade flows took place under normal tariff relations. In
s apparel exports to the US were worth US$209 million.
Apparel exports from AGOA countries peaked in 2004, after which they declined in 2005 and 2006
before stabilising briefly, and then declining further. The sharp drop between 2008 and
attributed at least partly to the global financial crisis, which also resulted in a contraction in overall
US imports. However, this contraction in apparel exports to the US did not take place entirely in
parallel with US imports. Whereas AG
apparel imports grew between 2005 and 2007 as sourcing from previously quota
countries intensified, declined slightly in 2008, and then recorded a sharp drop in 2009. However, in
2010, apparel imports were up to the levels preceding the difficult international business climate and
in 2011 recorded strong growth to reach their highest level on record. AGOA apparel exports also
recovered in 2011, but the decline in the previous period took plac
recovering US imports and strong growth in US apparel imports from Asian countries, China,
Bangladesh, Cambodia and Vietnam. The following graphs provide some context to these trends.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Apparel exports from AGOA countries peaked in 2004, after which they declined in 2005 and 2006
before stabilising briefly, and then declining further. The sharp drop between 2008 and
attributed at least partly to the global financial crisis, which also resulted in a contraction in overall
US imports. However, this contraction in apparel exports to the US did not take place entirely in
parallel with US imports. Whereas AGOA apparel exports declined between 2005 and 2010, US
apparel imports grew between 2005 and 2007 as sourcing from previously quota
countries intensified, declined slightly in 2008, and then recorded a sharp drop in 2009. However, in
el imports were up to the levels preceding the difficult international business climate and
in 2011 recorded strong growth to reach their highest level on record. AGOA apparel exports also
recovered in 2011, but the decline in the previous period took place against the backdrop of
recovering US imports and strong growth in US apparel imports from Asian countries, China,
Bangladesh, Cambodia and Vietnam. The following graphs provide some context to these trends.
rel provisions in the context of US-Africa trade
Eckart Naumann
19
Apparel exports from AGOA countries peaked in 2004, after which they declined in 2005 and 2006
before stabilising briefly, and then declining further. The sharp drop between 2008 and 2012 is often
attributed at least partly to the global financial crisis, which also resulted in a contraction in overall
US imports. However, this contraction in apparel exports to the US did not take place entirely in
OA apparel exports declined between 2005 and 2010, US
apparel imports grew between 2005 and 2007 as sourcing from previously quota-constrained
countries intensified, declined slightly in 2008, and then recorded a sharp drop in 2009. However, in
el imports were up to the levels preceding the difficult international business climate and
in 2011 recorded strong growth to reach their highest level on record. AGOA apparel exports also
e against the backdrop of
recovering US imports and strong growth in US apparel imports from Asian countries, China,
Bangladesh, Cambodia and Vietnam. The following graphs provide some context to these trends.
Fig. 4 Total US apparel imports ve
imports under AGOA (data based on HTS chapters 61+62)
Fig. 5 Index of changes in apparel exports to the US for the 1996
chapters 61+62)
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
1996 1997 1998 1999 2000
Total US apparel imports
0
50
100
150
200
250
300
350
400
450
500
2001 2002 2003 2004
INDEX: US Apparel imports
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Total US apparel imports versus US imports from leading Asian countries versus apparel
imports under AGOA (data based on HTS chapters 61+62)
Index of changes in apparel exports to the US for the 1996-2011 period (data based on HTS
2000 2001 2002 2003 2004 2005 2006 2007 2008
US$ million Source: Office for Textiles and Apparel (2012)
China+Vietnam+Cambodia+Bangladesh AGOA Aggregate
Index: AGOA
Index: US apparel imports
Index: Asican countries (China,
Bangladesh, Vietnam,
Cambodia)
2004 2005 2006 2007 2008 2009
INDEX: 2001=100 Source: Office for Textiles and Apparel (2012), own calculations
INDEX: China/Vietnam/Cambodia/Bangladesh apparel INDEX: AGOA apparel
rel provisions in the context of US-Africa trade
Eckart Naumann
20
rsus US imports from leading Asian countries versus apparel
2011 period (data based on HTS
2009 2010 2011
US$ million Source: Office for Textiles and Apparel (2012)
Index: US apparel imports
Index: Asican countries (China,
Bangladesh, Vietnam,
2010 2011
INDEX: 2001=100 Source: Office for Textiles and Apparel (2012), own calculations
INDEX: AGOA apparel
The indexed data of aggregate US apparel imports against AGOA apparel imports and apparel
imports from leading Asian producers (China, Vietnam, Cambodia and Bangladesh) shows important
trends particularly for the post-2004 (post
increased rapidly since AGOA's inception, peaking in 2004 and declining since (the trend was
reversed in 2011 and early indications are that 2012 AGOA exports will be very similar to 2011
levels), US imports of apparel have been increasing at a ste
period of review, Asian countries have made substantial gains in the US apparel import market, with
indexed export gains being substantial and revealing a more than fourfold increase during this
period.
3. Recent legislative changes
The AGOA legislation is often associated more with apparel exports than with those from other
sectors. Reasons for this include the very substantial preference margins offered to qua
exporters, the ground-breaking paradigm shift that led to flexible RoO, thus enabling producers to tie
in with global value chains prevailing in the sector, the significant number of countries that continue
to benefit from these preferences (their
the uncertainty surrounding the legislation over the years which has kept the issue in the limelight,
so to speak.
AGOA was initially enacted for the eightyear period to 2008, while the apparel pro
granted a waiver from normal RoO and permitted the use of third
expire after four years already. These provisions were intended to be of a provisional nature,
enacted to allow manufacturers in beneficiary count
capacity that would later be able to supply the downstream apparel manufacturing business. This
expectation has not been met and given global developments in the sector
the MFA which was expected to substantially reduce the attractiveness of Africa as a sourcing
destination of apparel for the American market
country fabric provisions to 2007.
As shown earlier, African apparel exports to th
countries rapidly expanded their foothold in that market and became increasingly intense
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
aggregate US apparel imports against AGOA apparel imports and apparel
imports from leading Asian producers (China, Vietnam, Cambodia and Bangladesh) shows important
2004 (post-quota) period. While AGOA countries' apparel
increased rapidly since AGOA's inception, peaking in 2004 and declining since (the trend was
reversed in 2011 and early indications are that 2012 AGOA exports will be very similar to 2011
levels), US imports of apparel have been increasing at a steady rate (apart from 2008
period of review, Asian countries have made substantial gains in the US apparel import market, with
indexed export gains being substantial and revealing a more than fourfold increase during this
t legislative changes – extension of the third-country fabric provisions
The AGOA legislation is often associated more with apparel exports than with those from other
sectors. Reasons for this include the very substantial preference margins offered to qua
breaking paradigm shift that led to flexible RoO, thus enabling producers to tie
in with global value chains prevailing in the sector, the significant number of countries that continue
to benefit from these preferences (their apparel sector is often entirely dependent on AGOA), and
the uncertainty surrounding the legislation over the years which has kept the issue in the limelight,
AGOA was initially enacted for the eightyear period to 2008, while the apparel pro
granted a waiver from normal RoO and permitted the use of third-country fabrics
expire after four years already. These provisions were intended to be of a provisional nature,
enacted to allow manufacturers in beneficiary countries to develop upstream textile manufacturing
capacity that would later be able to supply the downstream apparel manufacturing business. This
expectation has not been met and given global developments in the sector –
was expected to substantially reduce the attractiveness of Africa as a sourcing
destination of apparel for the American market – US lawmakers agreed to extend AGOA's third
country fabric provisions to 2007.
As shown earlier, African apparel exports to the US contracted in the post-MFA period while Asian
countries rapidly expanded their foothold in that market and became increasingly intense
rel provisions in the context of US-Africa trade
Eckart Naumann
21
aggregate US apparel imports against AGOA apparel imports and apparel
imports from leading Asian producers (China, Vietnam, Cambodia and Bangladesh) shows important
quota) period. While AGOA countries' apparel exports
increased rapidly since AGOA's inception, peaking in 2004 and declining since (the trend was
reversed in 2011 and early indications are that 2012 AGOA exports will be very similar to 2011
ady rate (apart from 2008-2009). Over the
period of review, Asian countries have made substantial gains in the US apparel import market, with
indexed export gains being substantial and revealing a more than fourfold increase during this
country fabric provisions
The AGOA legislation is often associated more with apparel exports than with those from other
sectors. Reasons for this include the very substantial preference margins offered to qualifying
breaking paradigm shift that led to flexible RoO, thus enabling producers to tie
in with global value chains prevailing in the sector, the significant number of countries that continue
apparel sector is often entirely dependent on AGOA), and
the uncertainty surrounding the legislation over the years which has kept the issue in the limelight,
AGOA was initially enacted for the eightyear period to 2008, while the apparel provisions – which
country fabrics – were set to
expire after four years already. These provisions were intended to be of a provisional nature,
ries to develop upstream textile manufacturing
capacity that would later be able to supply the downstream apparel manufacturing business. This
– not least the expiry of
was expected to substantially reduce the attractiveness of Africa as a sourcing
US lawmakers agreed to extend AGOA's third-
MFA period while Asian
countries rapidly expanded their foothold in that market and became increasingly intense
competitors to African producers. While the competition had always been there and African exports
were a mere fraction of US imports from other sources, the ability to source from low
locations remained attractive for various reasons
But amid some of the relative preference (quota protection) having been lo
notwithstanding African exporters still having duty
a second time extended the wearing apparel provisions, this time to September 2012. (See summary
of legal changes in Annex 1).
With 92% of AGOA apparel exports entering the US under the third
the provision at the end of September 2012 again threatened to seriously affect Africa's apparel
exports under the programme. This time, however, the economic and politic
The US was emerging from a serious financial crisis (and by some accounts remains economically
distressed) which to some extent had moved US lawmakers towards a more US
that was altogether more hawkish on issues s
preferences to third countries. It also finds itself in a presidential election year, which
respective Republican and Democrat majorities in the House of Representatives and Senate
respectively – typically means that less legislation is passed amid political manoeuvring and the role
that Congressional voting records often play in election
both Chambers of Congress through identical texts (as well as the scru
dealing with this type of trade legislation) before being submitted for signature to the US President;
notwithstanding the bipartisan history that had to date ensured continued passage of the AGOA
legislation, serious challenges were encountered. The delays in extending the legislation meant
growing uncertainty among traders
orders and associated planning are often undertaken many months in advance, also given the
required lead times and logistical considerations. The uncertainty also once again highlighted the
entirely nonreciprocal nature of the legislation which can be extended, amended or terminated
virtually at any time by the US Congress.
9 Classified under HTS 9819.11.12 – 'Apparel from foreign fabric mad
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
competitors to African producers. While the competition had always been there and African exports
on of US imports from other sources, the ability to source from low
locations remained attractive for various reasons – not least for competitive and strategic reasons.
But amid some of the relative preference (quota protection) having been lo
notwithstanding African exporters still having duty-free access to the US market, the US Congress for
a second time extended the wearing apparel provisions, this time to September 2012. (See summary
A apparel exports entering the US under the third-country fabric rule
the provision at the end of September 2012 again threatened to seriously affect Africa's apparel
exports under the programme. This time, however, the economic and political climate was different.
The US was emerging from a serious financial crisis (and by some accounts remains economically
distressed) which to some extent had moved US lawmakers towards a more US
that was altogether more hawkish on issues such as the extension of nonreciprocal trade
preferences to third countries. It also finds itself in a presidential election year, which
respective Republican and Democrat majorities in the House of Representatives and Senate
ically means that less legislation is passed amid political manoeuvring and the role
that Congressional voting records often play in election-year politics. Any US legislation must pass
both Chambers of Congress through identical texts (as well as the scrutiny of respective committees
dealing with this type of trade legislation) before being submitted for signature to the US President;
notwithstanding the bipartisan history that had to date ensured continued passage of the AGOA
es were encountered. The delays in extending the legislation meant
growing uncertainty among traders – both in Africa and the US – particularly within a sector where
orders and associated planning are often undertaken many months in advance, also given the
required lead times and logistical considerations. The uncertainty also once again highlighted the
entirely nonreciprocal nature of the legislation which can be extended, amended or terminated
virtually at any time by the US Congress.
pparel from foreign fabric made in a lesser developed country'.
rel provisions in the context of US-Africa trade
Eckart Naumann
22
competitors to African producers. While the competition had always been there and African exports
on of US imports from other sources, the ability to source from low-cost African
not least for competitive and strategic reasons.
But amid some of the relative preference (quota protection) having been lost in 2005
free access to the US market, the US Congress for
a second time extended the wearing apparel provisions, this time to September 2012. (See summary
country fabric rule9, the expiry of
the provision at the end of September 2012 again threatened to seriously affect Africa's apparel
al climate was different.
The US was emerging from a serious financial crisis (and by some accounts remains economically
distressed) which to some extent had moved US lawmakers towards a more US-focused approach
uch as the extension of nonreciprocal trade
preferences to third countries. It also finds itself in a presidential election year, which – given the
respective Republican and Democrat majorities in the House of Representatives and Senate
ically means that less legislation is passed amid political manoeuvring and the role
year politics. Any US legislation must pass
tiny of respective committees
dealing with this type of trade legislation) before being submitted for signature to the US President;
notwithstanding the bipartisan history that had to date ensured continued passage of the AGOA
es were encountered. The delays in extending the legislation meant
particularly within a sector where
orders and associated planning are often undertaken many months in advance, also given the
required lead times and logistical considerations. The uncertainty also once again highlighted the
entirely nonreciprocal nature of the legislation which can be extended, amended or terminated
e in a lesser developed country'.
With seven weeks to go before the expiry of the third
Senate eventually agreed to and passed identical versions of legislative amendments
apparel benefits from 2012 to 2015 to coincide with the overall expiry of AG
nearly derailed by a last-minute challenge (in the Senate). This action sought to block passage of the
legislation essentially by having the 'cost' associated with the AGOA preferences, estimated at
US$192 million by the Congressional B
funding from various trade-related government agencies. This challenge did not receive the required
majority support within the Senate
then allowed to remain unchanged and to pass the Senate vote by default.
The latest extension of the AGOA third
provided a welcome boost to the apparel manufacturing sector in Africa. Without an
prospects for a continuation of African apparel exports to the US would have been extremely poor.
In some countries – again using the example of Lesotho
dependent on preferential US market access under curre
largest manufacturing sector in the country, and single largest employer.
What happens beyond 2015 when AGOA is set to expire altogether is uncertain. Extensions of the
apparel legislation have, to date, been suppo
that also expires then. Both the US Administration and Congress now have a somewhat different
outlook on trade preferences than was perhaps the case at the inception of the AGOA legislation.
Economic conditions in the US are more challenging today than they were in 2000 and Congress
more generally appears intent on placing a greater emphasis on promoting its own market
opportunities as well as policies that directly promote local manufacturing and job cre
legislative proposals include the ‘Increasing American Jobs Through Greater Exports to Africa Act of
2012‘, which sought to triple American exports to Africa, or initiatives to substitute outsourced jobs
for local ones by offering tax cuts to
Bill, although this was blocked by Congress).
10
Senate Version S.3326 and House of R11
The amendment failed to carry by a vote of 40:
comparably larger number of Republicans voted against it (the sponsor of the amended text is Republican). Indications
are that proponents of the (late) intervention were somewhat appeased through an informal undertaking that issues
around the US cotton and wool trust funds
revisited later.
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
go before the expiry of the third-country fabric provisions, both the House and
Senate eventually agreed to and passed identical versions of legislative amendments
apparel benefits from 2012 to 2015 to coincide with the overall expiry of AG
minute challenge (in the Senate). This action sought to block passage of the
legislation essentially by having the 'cost' associated with the AGOA preferences, estimated at
US$192 million by the Congressional Budget Office, financed through an equivalent withdrawal of
related government agencies. This challenge did not receive the required
majority support within the Senate11 and – based on prior agreement – the original legislation was
then allowed to remain unchanged and to pass the Senate vote by default.
The latest extension of the AGOA third-country fabric provisions by three years to September 2015
provided a welcome boost to the apparel manufacturing sector in Africa. Without an
prospects for a continuation of African apparel exports to the US would have been extremely poor.
again using the example of Lesotho – the sector has become by and large
dependent on preferential US market access under current terms and conditions but is also the
largest manufacturing sector in the country, and single largest employer.
What happens beyond 2015 when AGOA is set to expire altogether is uncertain. Extensions of the
apparel legislation have, to date, been supported to some extent by the overall programme ‘term’
that also expires then. Both the US Administration and Congress now have a somewhat different
outlook on trade preferences than was perhaps the case at the inception of the AGOA legislation.
ditions in the US are more challenging today than they were in 2000 and Congress
more generally appears intent on placing a greater emphasis on promoting its own market
opportunities as well as policies that directly promote local manufacturing and job cre
legislative proposals include the ‘Increasing American Jobs Through Greater Exports to Africa Act of
2012‘, which sought to triple American exports to Africa, or initiatives to substitute outsourced jobs
for local ones by offering tax cuts to qualifying firms (for example the ‘Bring Jobs Back to America’
Bill, although this was blocked by Congress).
ersion S.3326 and House of Representatives Version H.R. 5986.
amendment failed to carry by a vote of 40:58. Some Democrat senators supported the intervention while a
y larger number of Republicans voted against it (the sponsor of the amended text is Republican). Indications
are that proponents of the (late) intervention were somewhat appeased through an informal undertaking that issues
st funds – which support local sourcing given cotton’s dut
rel provisions in the context of US-Africa trade
Eckart Naumann
23
country fabric provisions, both the House and
Senate eventually agreed to and passed identical versions of legislative amendments10 to extend the
apparel benefits from 2012 to 2015 to coincide with the overall expiry of AGOA. The process was
minute challenge (in the Senate). This action sought to block passage of the
legislation essentially by having the 'cost' associated with the AGOA preferences, estimated at
udget Office, financed through an equivalent withdrawal of
related government agencies. This challenge did not receive the required
the original legislation was
country fabric provisions by three years to September 2015
provided a welcome boost to the apparel manufacturing sector in Africa. Without an extension,
prospects for a continuation of African apparel exports to the US would have been extremely poor.
the sector has become by and large
nt terms and conditions but is also the
What happens beyond 2015 when AGOA is set to expire altogether is uncertain. Extensions of the
rted to some extent by the overall programme ‘term’
that also expires then. Both the US Administration and Congress now have a somewhat different
outlook on trade preferences than was perhaps the case at the inception of the AGOA legislation.
ditions in the US are more challenging today than they were in 2000 and Congress
more generally appears intent on placing a greater emphasis on promoting its own market
opportunities as well as policies that directly promote local manufacturing and job creation. Recent
legislative proposals include the ‘Increasing American Jobs Through Greater Exports to Africa Act of
2012‘, which sought to triple American exports to Africa, or initiatives to substitute outsourced jobs
qualifying firms (for example the ‘Bring Jobs Back to America’
. Some Democrat senators supported the intervention while a
y larger number of Republicans voted against it (the sponsor of the amended text is Republican). Indications
are that proponents of the (late) intervention were somewhat appeased through an informal undertaking that issues
which support local sourcing given cotton’s duty- free status – would be
Evidence of an increasing focus on bilateral reciprocal engagement with African countries can also be
noted. The current Obama Administration, li
growing economies globally are in Africa and this is likely to remain so for many years. There has
been an increase in bilateral investment treaties with African countries, while others have been
updated (the Southern African Customs Union
on the sidelines of the AGOA Forum). The Obama Administration also released its 'US Strategy
Towards Sub-Saharan Africa’12 in June 2012 although to a large extent thi
trade policies. The 'Doing Business in Africa’ campaign in harmony along with its ‘National Export
Initiative’ are features of this policy, which also undertakes to work closely with Congress to extend
AGOA beyond 2015.
There remains a reasonably high likelihood that should AGOA be renewed beyond its current term in
2015 the focus will be more on lower
may well be graduated out of the programme; South Africa is cur
of AGOA preferences and by far the most diversified exporter under the act. Its automotive exports
to the US alone, under preference, were valued at US$2.1 billion in 2011 and accounted for more
than one-fifth of the country's combined US exports. South Africa is also a significant net exporter to
the US. Engagement between SACU and the US on a deeper reciprocal treaty has been ongoing for a
number of years, mainly at the technical level. Material differences, however, r
of coverage of any such proposed agreement and it is known that SACU, and South Africa in
particular, favours a more regional integration based strategy for now. South Africa has for some
time (intensifying its efforts in 2012) been lobb
fabric waiver. South Africa based apparel manufacturers to date remain subject to the far stricter
RoO requirements than the rest of the AGOA beneficiary group.
12
'US Strategy towards Sub-Saharan Africa' available at
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Evidence of an increasing focus on bilateral reciprocal engagement with African countries can also be
noted. The current Obama Administration, like others before it, recognises that many of the fastest
growing economies globally are in Africa and this is likely to remain so for many years. There has
been an increase in bilateral investment treaties with African countries, while others have been
ated (the Southern African Customs Union –SACU – updated its agreement with the US in June
on the sidelines of the AGOA Forum). The Obama Administration also released its 'US Strategy
in June 2012 although to a large extent this merely reinforces existing
trade policies. The 'Doing Business in Africa’ campaign in harmony along with its ‘National Export
Initiative’ are features of this policy, which also undertakes to work closely with Congress to extend
remains a reasonably high likelihood that should AGOA be renewed beyond its current term in
2015 the focus will be more on lower-income beneficiaries. Higher income countries like South Africa
may well be graduated out of the programme; South Africa is currently the third largest beneficiary
of AGOA preferences and by far the most diversified exporter under the act. Its automotive exports
to the US alone, under preference, were valued at US$2.1 billion in 2011 and accounted for more
untry's combined US exports. South Africa is also a significant net exporter to
the US. Engagement between SACU and the US on a deeper reciprocal treaty has been ongoing for a
number of years, mainly at the technical level. Material differences, however, r
of coverage of any such proposed agreement and it is known that SACU, and South Africa in
particular, favours a more regional integration based strategy for now. South Africa has for some
time (intensifying its efforts in 2012) been lobbying the US to be included under the third
fabric waiver. South Africa based apparel manufacturers to date remain subject to the far stricter
RoO requirements than the rest of the AGOA beneficiary group.
Saharan Africa' available at http://www.agoa.info/download.php?file=117&viewnow=true
rel provisions in the context of US-Africa trade
Eckart Naumann
24
Evidence of an increasing focus on bilateral reciprocal engagement with African countries can also be
ke others before it, recognises that many of the fastest
growing economies globally are in Africa and this is likely to remain so for many years. There has
been an increase in bilateral investment treaties with African countries, while others have been
updated its agreement with the US in June
on the sidelines of the AGOA Forum). The Obama Administration also released its 'US Strategy
s merely reinforces existing
trade policies. The 'Doing Business in Africa’ campaign in harmony along with its ‘National Export
Initiative’ are features of this policy, which also undertakes to work closely with Congress to extend
remains a reasonably high likelihood that should AGOA be renewed beyond its current term in
income beneficiaries. Higher income countries like South Africa
rently the third largest beneficiary
of AGOA preferences and by far the most diversified exporter under the act. Its automotive exports
to the US alone, under preference, were valued at US$2.1 billion in 2011 and accounted for more
untry's combined US exports. South Africa is also a significant net exporter to
the US. Engagement between SACU and the US on a deeper reciprocal treaty has been ongoing for a
number of years, mainly at the technical level. Material differences, however, remain on the depth
of coverage of any such proposed agreement and it is known that SACU, and South Africa in
particular, favours a more regional integration based strategy for now. South Africa has for some
ying the US to be included under the third-country
fabric waiver. South Africa based apparel manufacturers to date remain subject to the far stricter
http://www.agoa.info/download.php?file=117&viewnow=true
References
AGOA. 2012. AGOA web portal. www.agoa.info
US International Trade Commission. 2012.
United States Department of State. 2012.
Online http://www.agoa.info/download.php?file=117&viewnow=true
United States Congress. 2000. Trade
http://otexa.ita.doc.gov/PDFs/Public_Law_106
United States Congress. 2002. Trade Act of 2002
http://www.gpo.gov/fdsys/pkg/PLAW
United States Congress. 2004.
274).http://www.gpo.gov/fdsys/pkg/PLAW
United States Congress. 2004. Miscellaneous Trade and Technical Correcti
108-429.
http://www.gpo.gov/fdsys/pkg/PLAW
United States Congress. 2006. Title VI Africa Investment Incentive Act of 2006
http://www.gpo.gov/fdsys/pkg/PLAW
United States Congress. 2008. An Act to extend the Andean Trade Preference Act and for other
purposes. Public Law 110-436, October 2008.
http://frwebgate.access.gpo.gov/cgi
bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ436.1
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
www.agoa.info
US International Trade Commission. 2012. www.usitc.gov
United States Department of State. 2012. US strategy towards Sub-Saharan Africa
http://www.agoa.info/download.php?file=117&viewnow=true
Trade and Development Act of 2000. Public Law 106
http://otexa.ita.doc.gov/PDFs/Public_Law_106-200-Trade_and_Development_Act_of_2000.pdf
Trade Act of 2002. Public Law 107-210.
http://www.gpo.gov/fdsys/pkg/PLAW-107publ210/html/PLAW-107publ210.htm
United States Congress. 2004. AGOA Acceleration Act of 2004
http://www.gpo.gov/fdsys/pkg/PLAW-108publ274/html/PLAW-108publ274.htm
Miscellaneous Trade and Technical Corrections Act of 2004
http://www.gpo.gov/fdsys/pkg/PLAW-108publ429/pdf/PLAW-108publ429.pdf
Title VI Africa Investment Incentive Act of 2006. Public Law 109
http://www.gpo.gov/fdsys/pkg/PLAW-109publ432/pdf/PLAW-109publ432.pdf
United States Congress. 2008. An Act to extend the Andean Trade Preference Act and for other
436, October 2008.
http://frwebgate.access.gpo.gov/cgi-
bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ436.110.pdf
rel provisions in the context of US-Africa trade
Eckart Naumann
25
Saharan Africa.
. Public Law 106-200, 18 May.
Trade_and_Development_Act_of_2000.pdf
107publ210.htm
AGOA Acceleration Act of 2004. Public Law 108-
108publ274.htm
ons Act of 2004. Public Law
108publ429.pdf
. Public Law 109-432.
109publ432.pdf
United States Congress. 2008. An Act to extend the Andean Trade Preference Act and for other
United States Congress. 2012. To amend the African Growth and Opportunity Act to extend the
third-country fabric program and for other purposes. Public Law 112
http://www.gpo.gov/fdsys/pkg/BILLS
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
United States Congress. 2012. To amend the African Growth and Opportunity Act to extend the
country fabric program and for other purposes. Public Law 112-163.
http://www.gpo.gov/fdsys/pkg/BILLS-112hr5986enr/pdf/BILLS-112hr5986enr.pdf
rel provisions in the context of US-Africa trade
Eckart Naumann
26
United States Congress. 2012. To amend the African Growth and Opportunity Act to extend the
112hr5986enr.pdf
Annex 1. Overview of all AGOA legislative amendments
Since its inception in October 2000, a number of legislative amendments have been passed by the US
Congress relating to AGOA. A short summary of each is provided below.
▲ The Trade Act of 2002 (Public Law 107
- Legislative amendments include a doubling of the apparel quota to 7%, while keeping the sub
quota for apparel from qualifying countries that unchanged at 3.5%.
- Namibia and Botswana were redesignated as ben
(despite not qualifying under the original per capita GNP criteria)
- Technical adjustments that explicitly extend preferences to ‘knit
apparel cut in a beneficiary country
- Technical adjustment to include merino wool sweaters as eligible
- Makes financial provision for the employment of officials in beneficiary countries to deal with
AGOA enforcement, as well as providing financ
the (required) apparel visa system
▲ AGOA Acceleration Act of 2004 (
- Extension of AGOA third-country fabric provisions from September 2004 to September 2007
- Extension of the overall AGOA legislation from 2008 to 2015
- Reduction of the quota limit for apparel made from third
quota unchanged at 7%
- Technical clarification and adjustment of the wearing apparel provisions (specifically rela
de minimis rules as well as the ethnic printed fabrics)
- Extension of AGOA benefits to apparel made from fabric and yarn considered to be in short supply
in the US
- Provision for an increased agricultural technical assistance to African count
personnel employed in African countries, as well as for deeper customs and transportation
cooperation
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
1. Overview of all AGOA legislative amendments
Since its inception in October 2000, a number of legislative amendments have been passed by the US
Congress relating to AGOA. A short summary of each is provided below.
Public Law 107-210)
Legislative amendments include a doubling of the apparel quota to 7%, while keeping the sub
quota for apparel from qualifying countries that unchanged at 3.5%.
Namibia and Botswana were redesignated as beneficiaries for the third-country fabric provisions
(despite not qualifying under the original per capita GNP criteria)
Technical adjustments that explicitly extend preferences to ‘knit-to-shape’ articles as well as to
apparel cut in a beneficiary country as well as the US (so-called hybrid cutting)
Technical adjustment to include merino wool sweaters as eligible
Makes financial provision for the employment of officials in beneficiary countries to deal with
AGOA enforcement, as well as providing financial assistance to countries in the implementation of
the (required) apparel visa system
AGOA Acceleration Act of 2004 (Public Law 108-274)
country fabric provisions from September 2004 to September 2007
rall AGOA legislation from 2008 to 2015
Reduction of the quota limit for apparel made from third-country fabric, while leaving the overall
Technical clarification and adjustment of the wearing apparel provisions (specifically rela
rules as well as the ethnic printed fabrics)
Extension of AGOA benefits to apparel made from fabric and yarn considered to be in short supply
Provision for an increased agricultural technical assistance to African count
personnel employed in African countries, as well as for deeper customs and transportation
rel provisions in the context of US-Africa trade
Eckart Naumann
27
Since its inception in October 2000, a number of legislative amendments have been passed by the US
Legislative amendments include a doubling of the apparel quota to 7%, while keeping the sub-
country fabric provisions
shape’ articles as well as to
called hybrid cutting)
Makes financial provision for the employment of officials in beneficiary countries to deal with
ial assistance to countries in the implementation of
country fabric provisions from September 2004 to September 2007
country fabric, while leaving the overall
Technical clarification and adjustment of the wearing apparel provisions (specifically relating to the
Extension of AGOA benefits to apparel made from fabric and yarn considered to be in short supply
Provision for an increased agricultural technical assistance to African countries, with at least 10
personnel employed in African countries, as well as for deeper customs and transportation
▲ Miscellaneous Trade and Technical Corrections Act of 2004 (
- Special apparel preferences (third
now had only qualified for standard apparel preferences. A sub
imports under AGOA's third country fabric provisions) is set
▲ Africa Investment Incentive Act o
- AGOA textile and apparel preferences are extended through to September 2015
- AGOA third-country fabric provisions extended through to September 2012
- Revises the quota ceiling pertaining to exports utilising the third
3.5% of total US apparel imports. It thus reverses the earlier reduction made under the AGOA
Acceleration Act of 2004
- Introduces the concept of ‘abundant supply’ to designate certain fabrics as being available
commercially in certain quantities from regional (African) suppliers, to be used first prior to utilising
the third-country fabric provisions in such categories
▲ [this Act has no official short title
and to make South Sudan AGOA eligible] (
- AGOA third-country fabric provisions extended through to September 2015
- Extends AGOA eligibility to the newly formed Republic of South Sudan
Overview of AGOA's apparel provisions in the context of US
tralac Trade Brief | S12TB05/2012 | Author: Eckart Naumann
Miscellaneous Trade and Technical Corrections Act of 2004 (Public Law 108
Special apparel preferences (third-country fabric provision) are extended to Mauritius, which until
now had only qualified for standard apparel preferences. A sub-quota of 5% (based on total eligible
imports under AGOA's third country fabric provisions) is set
Africa Investment Incentive Act of 2006 (Public Law 109-432)
AGOA textile and apparel preferences are extended through to September 2015
country fabric provisions extended through to September 2012
Revises the quota ceiling pertaining to exports utilising the third-country fabric provisions back to
3.5% of total US apparel imports. It thus reverses the earlier reduction made under the AGOA
Introduces the concept of ‘abundant supply’ to designate certain fabrics as being available
certain quantities from regional (African) suppliers, to be used first prior to utilising
country fabric provisions in such categories
this Act has no official short title - Legislation to extend third-country fabric provisions to 2015
nd to make South Sudan AGOA eligible] (Public Law 112-163)
country fabric provisions extended through to September 2015
Extends AGOA eligibility to the newly formed Republic of South Sudan
- - -
rel provisions in the context of US-Africa trade
Eckart Naumann
28
Public Law 108-429)
abric provision) are extended to Mauritius, which until
quota of 5% (based on total eligible
AGOA textile and apparel preferences are extended through to September 2015
ry fabric provisions back to
3.5% of total US apparel imports. It thus reverses the earlier reduction made under the AGOA
Introduces the concept of ‘abundant supply’ to designate certain fabrics as being available
certain quantities from regional (African) suppliers, to be used first prior to utilising
country fabric provisions to 2015