African Growth & Opportunity Act (AGOA)
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Issue Summary
The African Growth & Opportunity Act (AGOA) was enacted in May 2000 to expand U.S. trade with Sub-Saharan Africa and stimulate the economies of the participating countries. Each year, the President of the United States is eligible to determine the countries eligible for AGOA benefits, which include trade preferences that essentially allow goods produced in the eligible countries to enter the United States duty-free. There are currently 40 countries eligible for AGOA benefits. The three most recently eligible countries are Cote d’Ivoire (Ivory Coast), Guinea, and Niger, all of which held democratic elections.
The AGOA program has brought significant benefits to the participating countries, but it is scheduled to expire very soon in September 2015. The third country fabric benefit—one of the most important benefits for the textile and apparel industry—is scheduled to expire on September 30, 2012 (two years before the expiration of the program). The third country fabric benefit allows apparel producers in AGOA-eligible countries to use third-country fabric and still get duty-free treatment in the United States. Many lawmakers, including U.S. Representative Jim McDermott (D-WA), one of the original sponsors of AGOA, have called for the benefit to be extended for as long as AGOA. The U.S. State Department has called for AGOA and the third country fabric benefit to be extended until at least 2025.
USA-ITA Position
USA-ITA supports the extension of the third country fabric benefit for at least as long as the AGOA program remains in effect. Many of the textile and apparel products that Sub-Saharan African countries export require fabric that is not commercially available in AGOA countries. Quick action to extend the third country fabric benefit is important because many retailers and importers have long lead times for sourcing and require stability in prices.
Advocacy
On March 9, 2012, USA-ITA joined a group of apparel and retail associations in sending a letter to the leadership of the U.S. Senate Finance Committee and the U.S. House Ways & Means Committee calling for the renewal of the Third-Country Fabric Provision of the African Growth & Opportunity Act (AGOA). The letter explains that the provision “helps U.S retailers achieve lower costs and diversify their supply chains,” as well as “solidifies a broader strategic partnership with the United States based on development through trade.” The full letter is available here.