WASHINGTON — Legislation to extend and expand apparel and textile trade breaks for sub-Saharan Africa has been introduced in Congress, but it won’t be until next year before the measure is considered — too late for some 2004 apparel orders.
A key part of the existing law — which allows the region’s poorest countries to use non-African or U.S. textiles in apparel receiving U.S. duty-free breaks — is set to expire Sept. 30, a factor weighed by importers.
“Retailers basically have already made their sourcing decisions for next year” and don’t want to bet on the expiring provision being renewed, said Erik Autor, vice president of international trade with the National Retail Federation.
The Africa Growth & Opportunity Act, with broad trade benefits for the region, was first passed in 2000 and enhanced two years later for the 38-country sub-Saharan region. Of these countries, 19 have qualified for duty-free breaks on apparel, and all but two are allowed to use the third-country fabric and still receive the trade breaks.
However, there was strong bipartisan congressional support for the original AGOA, and importers are confident an extension will eventually be granted.
“AGOA 3 will have broad support,” predicted Julia Hughes, vice president of international trade with the U.S. Association of Importers of Textiles & Apparel.
AGOA has spurred increased apparel and textile production investment in the region. While Africa’s apparel shipments only account for 2 percent of all apparel imports to the U.S., the amount is double the pre-AGOA levels, Hughes noted.
The new AGOA legislation will also land on the agenda of Congress during an election year, and when the Central America Free Trade Agreement, and possibly other free trade pacts, will be voted on by lawmakers. With a decline in manufacturing jobs an issue, trade legislation is often used by opponents to underscore their effect on the U.S. job market.
Jock Nash, Washington counsel for textile giant Milliken & Co., said textile makers still view the original AGOA as harming domestic mills. Nash said, “We are not going to be supportive of anything that will further harm the industry.”