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June 05, 2012

Mauritius Ambassador Seeks Extension of AGOA Provision

by James Butty

The U.S. capital is set next week to host the 11th annual U.S.-sub-Saharan Africa trade forum commonly known as the AGOA Forum.

AGOA, an abbreviation for the African Growth and Opportunity Act, is African Growth and Opportunity Act is designed to strengthen trade between the United States and sub-Saharan Africa by creating a preferential trade and investment relationship.

Since its inception in 2000, about 38 African countries are currently benefiting from AGOA.

The legislation, first passed in 2000, has already had an important impact on increasing exports to the U.S. from sub-Saharan Africa, said Somduth Soborun, Mauritius’ ambassador to the United States.

“I see that many African countries are doing their best to benefit from AGOA,” he said. “There is tremendous progress going on and I think we should give it a chance to make more progress.”

According to the U.S. government, imports from sub-Saharan Africa under AGOA and a related program in 2010 totaled more than $44 billion, or five times higher than in 2001.

Among other perks, AGOA allows eligible apparel articles made in qualifying sub-Saharan African countries to be imported to the United States without duties or quotas. 

But Soburun said the Third-Country Fabric (TCF) provision of AGOA, which allows manufacturers in sub-Saharan Africa using fabric and yarn from other countries to qualify for preferential trade status, is set to expire in September this year.

Soburun said Mauritius and other African apparel-producing countries are concerned the U.S. Congress has so far failed to take action to extend it.

“If you don’t have the Third-Country Fabric provision, either you use the yarn and fabric available in the sub-Saharan African countries, or in the U.S.,” he said. That’s a problem, he explained, because U.S. textiles are too expensive, while African countries currently lack the infrastructure to produce their own textiles efficiently.

Soburun said the uncertainty over the provision’s renewal is already hurting trade.

“The tailors require a lead time of 9 months in most cases to place their order,” he explained. So “it ought to have been extended 9 months before that. Because it has not been renewed, the sub-Saharan African countries are losing many orders from the American retailers.”

The Mauritius ambassador added that at the AGOA forum last year, “There was a commitment both on the part of the sub-Saharan African countries and the U.S. administration, that they will do their best to get the Third-Country Fabric Provision extended.

In a statement last month, the U.S. Trade Representative office said “swift passage of legislation extending AGOA’s TCF provision is necessary to ensure AGOA’s continued success.

The statement noted that Congress has extended the provision twice before with bipartisan support.

This year’s forum, scheduled for June 14-15, in Washington, DC, brings together over 600 participants, including senior U.S. and African officials, as well as U.S. and African members of the private sector and civil society.

Butty Interview with Mauritius Ambassador to the US regarding AGOA