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Ways and Means Chairman Backs Limited AGOA Deal

WASHINGTON — The September 2004 expiration of a U.S. trade provision allowing the poorest sub-Saharan African countries to use textiles from any country in making apparel, given duty-free breaks, should be extended only for a limited time,...

WASHINGTON — The September 2004 expiration of a U.S. trade provision allowing the poorest sub-Saharan African countries to use textiles from any country in making apparel, given duty-free breaks, should be extended only for a limited time, according to Ways and Means Committee Chairman Bill Thomas (R., Calif.).

The benefit, approved in 2000 in the Africa Growth & Opportunity Act and expanded last year by Congress, is designed to jump-start apparel industries in lesser developed African countries. Other countries covered by AGOA are required to use African or U.S. textiles in order to receive the duty-free benefit.

The issue is shaping up to be the latest clash in Congress between the interests of apparel importers, who want a several-year extension, and that of the domestic textile industry, favoring no more time.

Thomas, who recently attended an AGOA forum in Mauritius and toured the sub-continent to assess the legislation’s effectiveness, told reporters Monday that he has reservations about backing a third-country fabric extension beyond September 2004.

Thomas said AGOA is supposed to “bootstrap” weak economies by creating value-added textile industries — a cornerstone of developing economies — to support apparel industries.

However, Thomas, whose committee is where all trade bills originate, said he hasn’t ruled out offering legislation to extend the 2004 deadline on a limited basis.

He declined to offer a time period, but noted a limited extension could help ease competitive pressure on Africa from China when global quotas limiting apparel imports expire on Dec. 31, 2004.

In the original AGOA bill, retailers and other apparel importers, backed by Thomas and other free-traders in Congress, pushed for more liberal third-country fabric allowances. However, lawmakers backing the flagging domestic textile interests concerned about import competition succeeded in curbing third-country fabric use.

“This is going to reopen the whole debate at a time when we are seemingly locked in an economic stagnation in this country, where jobs, jobs, jobs is the issue,” said Jock Nash, the Washington counsel for textile giant Milliken & Co.

Nash said if an extension is to be granted, the U.S. textile industry would press for trade benefits to offset the resulting increase in imports.