Cotton Made in Africa

WASHINGTON — The House passed legislation Wednesday night aimed at easing barriers for companies seeking to do business in Africa and in the U.S. under the African Growth & Opportunity Act.

Lawmakers passed the “AGOA Enhancement Act” on the suspension calendar reserved for noncontroversial bills and requires a two-thirds majority to pass.

Apparel brands and retailers have been exploring more opportunities in Africa with the passage last year of a 10-year extension of AGOA.

The legislation directs the president to establish an AGOA web site to provide information and technical assistance at the U.S. Agency for International Development’s’ regional trade hubs and a link to U.S. embassy websites located in eligible sub-Saharan African countries.

It also instructs the president to implement policies that facilitate trans-boundary trade between eligible sub-Saharan African countries, provide training to businesses in the countries, as well as government officials on ways to access AGOA benefits and other programs and to provide capacity building for African entrepreneurs and trade associations and promote product diversification and value-added processing.

The trade preference program is an important one for the U.S. fashion industry. It contains a stipulation known as the “third-country fabric provision” that helps companies producing in 27 least-developed countries that are part of the pact to use fabrics outside of the region and still receive duty-free benefits when shipping to the U.S.

“A large part of the bill focuses on increased capacity building opportunities and I think that is really important,” said Julia Hughes, president at the U.S. Fashion Industry Association. “We think it’s also really important to enhance policies to encourage more technical assistance, especially for more training for businesses in eligible countries on how to do business with American companies.”

Hughes said one reason the AGOA trade program and benefits appear to be underutilized is because many standards and requirements are in place that can be difficult to navigate.

“The opportunity in the bill to enhance training and share information with African entrepreneurs and associations to help them diversify products and give more value added are incredible benefits and will definitely make a difference,” she said.

Stephen Lamar, executive vice president at the American Apparel & Footwear Association, said the provisions in the bill provide a “one-stop shop” for companies seeking information about how AGOA works and how to use it.

Lamar said when he was in Botswana last year the hot topic among companies was how they could better utilize AGOA’s benefits.

“This legislation’s intent is to bridge the gap between the information that exists and the information that is available,” he said. “It is trying to make AGOA more robust.”

Lamar said Ethiopia has been a “bright spot” in terms of gaining new investment from U.S. brands. Lesotho has been an important manufacturing hub for several years and remains strong, and  Kenya, Madagascar and Tanzania are attracting new attention as well, he added.

Industry officials are hoping the Senate will take up the House-passed bill before the end of the year.