overview of agoa's apparel provisions in the context of us ... · 10/10/2012 · 6106.1000...

Overview of AGOA's apparel

provisions in the context of

US-Africa trade

by Eckart Naumann

��

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

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provisions in the context of

Africa trade

Eckart Naumann

tralac

No. S12

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acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of

Working Paper


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



ased Africa policy undertakes to promote an extension of AGOA

beyond its current expiry date in 2015.


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


ealthcare assistance, investment support and financing, as well as security


implement some of the support measures envisaged (and required) by the AGOA legis



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




context with regard to (a) trade flows trends since AGOA's inception, (b) Sub-Saharan African apparel


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



ased Africa policy undertakes to promote an extension of AGOA


rictions, the legislation goes well beyond this

capacity building, general


ealthcare assistance, investment support and financing, as well as security-


implement some of the support measures envisaged (and required) by the AGOA legislation.



able; recent experience and uncertainty

around the extension of AGOA's apparel provisions in as far as they relate to the third-country fabric




Saharan African apparel


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



apparel preferences translate into a sizeable preference margin, with the leading 15


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


third countries. This provision was initially time-bound but has been renewed three times,


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


programme which is an important precondition

rts are subject to a quota system based on volume (rather than



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



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


country fabric provision has increased from 76% to 92% over the same peri


Eckart Naumann

2

apparel preferences translate into a sizeable preference margin, with the leading 15


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


but has been renewed three times,


Apparel categories are generally not Generalised System of Preferences (GSP) eligible,

herefore AGOA's apparel preferences are of even greater significance to beneficiary countries


rts are subject to a quota system based on volume (rather than



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



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


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).



(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


enforced. In its first application this provision related to denim fabric, and in ef



This reversal somewhat reinforces the notion that in order to be – and remain



as well as commercial value chain realities.

While AGOA has led to increased exports (and likely reduced substitution of exports from


US$1 million worth of apparel to the US. While the aggregate number



e significant apparel exporters to the US in 1996 saw a 98% and 99%


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


Multifibre quotas) was clearly a watershed year, with the earlier rise in AGOA apparel exports


countries (China, Bangladesh, Vietnam and Cambodia).


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


enforced. In its first application this provision related to denim fabric, and in effect compelled



and remain – competitive in



While AGOA has led to increased exports (and likely reduced substitution of exports from


US$1 million worth of apparel to the US. While the aggregate number



e significant apparel exporters to the US in 1996 saw a 98% and 99%


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


y a watershed year, with the earlier rise in AGOA apparel exports


• 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.



2015 period remains uncertain with regard to AGOA's continued existence in its



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


country fabric provisions will now only take place in 2015 along with the overall


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.


Eckart Naumann

4

regard to AGOA's continued existence in its



ely to come from Africa for some time still), the US has in recent

reciprocal preferences and is


country fabric provisions will now only take place in 2015 along with the overall


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



The apparel provisions under AGOA

Apparel and certain textile products form part of a group of over 7 000 tariff lines included under th



products, footwear, wine, footwear and watches. Duty-free status under AGOA often translates into


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


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


eliminates the Competitive Needs Limitations (CNLs) that apply to GSP products and affect other



1’ and that have fulfilled obligations relating to an apparel visa

" is the terminology used in the AGOA legislation


Eckart Naumann

5

000 tariff lines included under the



GOA often translates into


ee treatment under AGOA

AGOA GSP

Yes No

Yes No

Yes No

Yes No


-free market access for

800 tariff lines were added over and above


GSP products and affect other



’ 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.




The US GSP on which AGOA builds is subject to periodic renewal by the US Congress a



Trade Act of 1976 but was recently allowed to lapse for much of 2011, until it was re



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


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



have lost eligibility include the Democratic Republic of Congo (DRC), Madagascar and the Central



ountry eligibility list underscore not only the unilateral, and ultimately temporary,


as assessed by the US – include respect for the rule of law and political pluralism, the




Eckart Naumann

6


The US GSP on which AGOA builds is subject to periodic renewal by the US Congress and contains



pse for much of 2011, until it was re-authorised



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


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



c Republic of Congo (DRC), Madagascar and the Central



ountry eligibility list underscore not only the unilateral, and ultimately temporary,


nd political pluralism, the



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.



Eligibility for AGOA's wearing apparel provisions



makes provision for qualifying countries to ship articles of clothing to the US duty


establishment of a product ‘visa system’ that is able to monitor and track the sale and sourcing of



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


Namibia and Botswana are also eligible for the special wearing apparel provisions and



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.


Eckart Naumann

7



s to ship articles of clothing to the US duty-free when certain


the sale and sourcing of



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


le for the special wearing apparel provisions and



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.



Apparel Rules of Origin and other apparel provisions under AGOA

n qualifying African countries to enter the US duty


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


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


Apparel made from fabric or yarn not available in commercial quantities in


AGOA apparel exports. The only other category of any significance is apparel m



Eckart Naumann

8

n qualifying African countries to enter the US duty-free subject to a


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


parel exports from AGOA-eligible

countries entered the US under AGOA, more than 93% were shipped under the ’third-country fabric’


Apparel made from fabric or yarn not available in commercial quantities in


AGOA apparel exports. The only other category of any significance is apparel made from fabric or


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



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.


Eckart Naumann

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



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



ing to the materials used in the production of qualifying exports for at


Abundant supply provisions were introduced under the AGOA IV legislation (see the Africa



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


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


are more technically and collectively known as ‘Category 9’ articles (Categories 1


is granted on an application basis and requires a country to be compliant with the AGOA apparel visa



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.


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,



ing to the materials used in the production of qualifying exports for at


IV legislation (see the Africa



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


n was subsequently scrapped in 20086.

, an exception is made for certain folklore and handmade


are more technically and collectively known as ‘Category 9’ articles (Categories 1-8


with the AGOA apparel visa



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.




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



While AGOA as a general rule removes quotas on eligible goods (tariff-rate quotas remain for certain


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.


significantly in absolute terms. Some changes to the AGOA legislation also increased the percentage



September 2002 period, the AGOA quota was set at 313 million SME (the original AGOA legislation


initially set the cap at 1.5% for the 2000/2001 quota period, to be increased in equal incre


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.



extile and apparel quotas were phased out under MFA, combined

May 18, 2000.


Eckart Naumann

11


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



rate quotas remain for certain


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.


islation also increased the percentage



uota was set at 313 million SME (the original AGOA legislation7


initially set the cap at 1.5% for the 2000/2001 quota period, to be increased in equal increments to


quota remains at 3.5%. In the 2011/2012 quota period (ending end September 2012) the quota

was set at half that amount.



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



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


Eckart Naumann

12

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.



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


free AGOA preferences. Since 2001, 88% of all apparel export was shipped


preferences, from the US perspective AGOA makes up only a very small share of



to US$76.5 billion in 2011. US imports under preference were US$2.4 billion in 1996 (or 6.3% of total



the Central America Free Trade Agreement (FTA) (DR-CAFTA) with a 7.8% share of preferential


preferences (1.3%). African countries under AGOA for the year 2011 collectively make up the fourth


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



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.


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


erences. Since 2001, 88% of all apparel export was shipped


preferences, from the US perspective AGOA makes up only a very small share of total US apparel



preference were US$2.4 billion in 1996 (or 6.3% of total



CAFTA) with a 7.8% share of preferential


tively make up the fourth


apparel imports into the US grew



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



Global apparel exports (preferential versus non-preferential) to the US 19



wards (AGOA apparel preferences only started in 2001, with the first


graph provides an overview of apparel exports from AGOA-eligible countries for the per



figure very closely resembles apparel exports from the Sub-Saharan Africa group (SSA) over the same


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


Eckart Naumann

14

preferential) to the US 1996-2011 (data



wards (AGOA apparel preferences only started in 2001, with the first


eligible countries for the period 1996 -



Saharan Africa group (SSA) over the same


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


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



Apparel exports from AGOA beneficiary countries to the US 1996-2011 (data based on HTS



prior to AGOA's apparel benefits becoming available to beneficiary countries, apparel exports from


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


apparel RoO). In that year, some leading exporters (for example Lesotho) only met the w


with the administrative ‘visa system’ formalities on 18 January 2001.

The data shows that the value gap between apparel exports that utilise AGOA'


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


2001 2002 2003 2004 2005 2006 2007 2008


AGOA apparel exports No preferences claimed AGOA Apparel using 3rd country fabric


Eckart Naumann

15

2011 (data based on HTS



eneficiary countries, apparel exports from


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


apparel RoO). In that year, some leading exporters (for example Lesotho) only met the wearing


The data shows that the value gap between apparel exports that utilise AGOA's third-country fabric


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


2009 2010 2011


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.



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


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.


753 million with over 92% of that figure qualifying under AGOA. Some of the growth can be



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.



cotton trousers and men's shirts were the leading three categories and a combined US$384 million



rom 14.9% to 32%, giving exporters under AGOA a sizeable competitive advantage.


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


aziland combined exported almost


qualifying under AGOA. Some of the growth can be



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.



ding three categories and a combined US$384 million



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



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


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



A further observation relates to the number of SSA countries in 2011 that were exporting apparel of



had (only) increased by one to 11 countries (including Madagascar, which is no longer an AGOA



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.


Eckart Naumann

18

at were exporting apparel of



countries (including Madagascar, which is no longer an AGOA



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.




before stabilising briefly, and then declining further. The sharp drop between 2008 and



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


el imports were up to the levels preceding the difficult international business climate and


recovered in 2011, but the decline in the previous period took place against the backdrop of




Eckart Naumann

19


before stabilising briefly, and then declining further. The sharp drop between 2008 and 2012 is often



OA apparel exports declined between 2005 and 2010, US

apparel imports grew between 2005 and 2007 as sourcing from previously quota-constrained


el imports were up to the levels preceding the difficult international business climate and


e against the backdrop of



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



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


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


Eckart Naumann

20

rsus US imports from leading Asian countries versus apparel

2011 period (data based on HTS

2009 2010 2011


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



aggregate US apparel imports against AGOA apparel imports and apparel


2004 (post-quota) period. While AGOA countries' apparel



levels), US imports of apparel have been increasing at a steady rate (apart from 2008



t legislative changes – extension of the third-country fabric provisions


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


to benefit from these preferences (their apparel sector is often entirely dependent on AGOA), and


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


enacted to allow manufacturers in beneficiary countries to develop upstream textile manufacturing


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



Eckart Naumann

21

aggregate US apparel imports against AGOA apparel imports and apparel


quota) period. While AGOA countries' apparel exports



ady rate (apart from 2008-2009). Over the



country fabric provisions


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


apparel sector is often entirely dependent on AGOA), and


AGOA was initially enacted for the eightyear period to 2008, while the apparel provisions – which

country fabrics – were set to


ries to develop upstream textile manufacturing


– 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


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




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 apparel exports entering the US under the third-country fabric rule


exports under the programme. This time, however, the economic and political climate was different.


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


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



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




virtually at any time by the US Congress.

pparel from foreign fabric made in a lesser developed country'.


Eckart Naumann

22


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


country fabric rule9, the expiry of


al climate was different.


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


ically means that less legislation is passed amid political manoeuvring and the role

year politics. Any US legislation must pass

tiny of respective committees



es were encountered. The delays in extending the legislation meant

particularly within a sector where




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.



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


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


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.


apparel legislation have, to date, been supported to some extent by the overall programme ‘term’



ditions in the US are more challenging today than they were in 2000 and Congress


opportunities as well as policies that directly promote local manufacturing and job cre



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


st funds – which support local sourcing given cotton’s dut


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


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,


the sector has become by and large

nt terms and conditions but is also the


rted to some extent by the overall programme ‘term’



ditions in the US are more challenging today than they were in 2000 and Congress


opportunities as well as policies that directly promote local manufacturing and job creation. Recent



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


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




noted. The current Obama Administration, like others before it, recognises that many of the fastest



ated (the Southern African Customs Union –SACU – updated its agreement with the US in June


in June 2012 although to a large extent this merely reinforces existing



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



untry's combined US exports. South Africa is also a significant net exporter to


number of years, mainly at the technical level. Material differences, however, r



time (intensifying its efforts in 2012) been lobbying the US to be included under the third


RoO requirements than the rest of the AGOA beneficiary group.

Saharan Africa' available at http://www.agoa.info/download.php?file=117&viewnow=true


Eckart Naumann

24


ke others before it, recognises that many of the fastest



updated its agreement with the US in June


s merely reinforces existing



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



untry's combined US exports. South Africa is also a significant net exporter to


number of years, mainly at the technical level. Material differences, however, remain on the depth



ying the US to be included under the third-country


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.


United States Congress. 2006. Title VI Africa Investment Incentive Act of 2006


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



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


436, October 2008.

http://frwebgate.access.gpo.gov/cgi-

bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ436.110.pdf


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. 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




country fabric program and for other purposes. Public Law 112-163.

http://www.gpo.gov/fdsys/pkg/BILLS-112hr5986enr/pdf/BILLS-112hr5986enr.pdf


Eckart Naumann

26


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



1. Overview of all AGOA legislative amendments


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



Eckart Naumann

27


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


▲ 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



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


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

- - -


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


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

overview of agoa's apparel provisions in the context of us ... · 10/10/2012 · 6106.1000...

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