By and and  on August 4, 2009

WASHINGTON — U.S. Trade Representative Ron Kirk plans to encourage sub-Saharan African countries to reduce their dependence on apparel production as an economic growth engine when he kicks off a visit to the continent today.

Kirk is to take part in the eighth annual African Growth & Opportunity Act forum in Nairobi through Thursday, where he is scheduled to confer with trade ministers from 40 African countries, as well as private sector executives, to discuss challenges and strategies for advancing economic development.

He also will visit Addis Ababa, Ethiopia and Dakar, Senegal, over five days beginning Friday.

Retailers and apparel brands such as J.C. Penney, Wal-Mart, Levi Strauss and Gap have production in sub-Saharan Africa under the AGOA trade preference program, which gives duty free preferences to apparel imports from 27 eligible African countries.

Asked to respond to worries about extending U.S. duty free benefits to poor countries such as Bangladesh and Cambodia, Kirk told reporters he will bring a message of “tough love” to the African nations, which have faced challenges with infrastructure, competition and the global economic crisis.

Lawmakers in Congress have introduced bills to eliminate duties for the least developed countries, primarily targeting duties on apparel imports.

“We have heard a little bit of concern among some AGOA countries that extending our preferences, particularly in textiles, to other countries might be to their disadvantage,” said Kirk, adding that the U.S. is “absolutely committed to strengthening our relationship with AGOA, but that in no way should impair our relationship with other [least developed countries]. We feel a responsibility to reach out to and build a relationship with, as well.”

The trade chief said he will urge African producers to continue to diversify their industries and imports beyond oil and, secondarily, textile and apparel production.

“The reality is that textile exports from Africa have dropped dramatically and that makes a pretty compelling case that we will make to a number of our AGOA partners that they should diversify beyond the textile fields,” Kirk said.

Apparel and textile imports from sub-Saharan Africa fell 11.5 percent to 115 million square meter equivalents in the first five months of the year through May, according to the U.S. Commerce Department’s Office of Textiles & Apparel.

Lesotho, the largest AGOA apparel supplier to the U.S., posted a drop of 11 percent in imports to 29.9 million SME in the first five months of the year, while Madagascar, the second largest AGOA apparel supplier to the U.S., had a 13.78 percent drop to 26.2 million SME to the U.S.

Kirk said he also will stress the importance of investing in infrastructure to build better and more efficient roads, warehouses and ports to transfer products.

Cotton subsidies are expected to be a top issue in some of the meetings Kirk has with trade ministers from African cotton exporting countries. The issue of U.S. cotton subsidies contributed to the collapse of the Doha Round of global trade talks last year and have been a sticking point since 2003 when four African cotton-exporting countries walked out of the ministerial meeting when the U.S. refused to commit to reducing its subsidies to cotton farmers.

“We understand their concerns,” Kirk said. “The U.S. position on this is clear. Their concerns regarding cotton, we think, are best going to be resolved through the multilateral forum [of Doha] within the context of the agriculture negotiations.”

Kirk’s remarks had at least one group representing African textile and apparel producers concerned.

“In the context of extending preferences to countries such as Bangladesh and Cambodia, which are already competitive.…It would have a very serious negative impact on apparel industries in Africa,” said Paul Ryberg, president of the Washington-based African Coalition for Trade. “The question is whether it would be the death knell or merely cause a serious contraction, but the best-case scenario is that dozens of companies would be put out of business and hundreds of thousands of people would lose their jobs.”

Julia Hughes, senior vice president of international trade for the U.S. Association of Importers of Textiles & Apparel, said, “Our member companies are very supportive of AGOA and have worked very hard to make a successful program. There continues to be some concerns about AGOA in terms of improvements in delivery times, improvements in the ease of doing business in Africa that companies are still looking for, but that being said, we have recommended an increase in capacity building and also the opportunities to bring together U.S. buyers with their African counterparts to help improve their understanding of doing business in the U.S.”

Kirk’s trip is taking place amid heightened scrutiny on manufacturing conditions in the sub-Saharan region. On Sunday, a report from the Sunday Times of London alleged environmental violations at a factory in Lesotho that manufactured denim jeans for Levi Strauss & Co. and Gap Inc.

Both companies said they had immediately launched their own investigations in Lesotho upon hearing of the allegations. Levi’s confirmed that untreated water from a supplier’s fabric mill was improperly discharged as a result of a broken government pipe. A Levi’s spokeswoman said the mill’s own waste water treatment process had broken, so the mill had sent the waste water through a government pipe that would have treated the water. That pipe was broken, but has since been fixed.

“We also informed all our suppliers in Lesotho to immediately stop sending their solid waste to the municipal landfill until we can meet with local authorities and determine how to address the complex issue of public health, economic livelihood and waste disposal,” said Levi’s in a statement.

Don Henkle, senior vice president of global responsibility for Gap, said, “As soon as we were alerted of these issues, we immediately investigated the situation on the ground in Lesotho, commissioned an independent monitoring organization to conduct its own investigation, and placed one of the factories involved on immediate notice until our investigation is complete and all issues are adequately addressed.”

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