WASHINGTON — President Bush on Tuesday signed into law legislation extending for three years special duty-free apparel benefits to most sub-Saharan African countries, which were to expire in September.
This story first appeared in the July 14, 2004 issue of WWD. Subscribe Today.
Continuing the apparel trade breaks for the region’s least-developed countries has been a matter of urgency for apparel importers who have tapped into the African market originally included in the Africa Growth & Opportunity Act enacted in 2000.
The measure Bush signed also extends AGOA through 2015 instead of the original 2008. Although Africa remains a small apparel supplier, accounting for 2.2 percent of the imported apparel market in the U.S., its shipments have grown during the period by almost 30 percent.
“By reducing barriers to trade, this law has increased exports, created jobs and expanded opportunity for Africans and Americans alike,” Bush said before signing the AGOA Acceleration Act of 2004 in a ceremony in the Old Executive Office Building here.
The legislation was approved last month in both chambers of Congress by unanimous consent, which means the measure carried enough popularity in both parties that no vote was needed.
The Africa bill is one of a few exceptions this election year to trade legislation being put on the back burner because of political differences over the direction of U.S. trade policy and the uneven effects increasing imports have on U.S. manufacturing. Poverty-stricken Africa’s need to be given more time to develop its own textile industry to support hopes for a thriving apparel sector was enough to set aside the trade debate for the Africa Acceleration bill’s passage.
“It’s absolutely the biggest success story on trade policy this year,” said Julia Hughes, vice president of international trade with the U.S. Association of Importers of Textiles & Apparel.
Legislation implementing a U.S.-Australia Free Trade Agreement is the only other major trade measure causing few political tensions, largely because both countries have similar large economies. As early as today, the House is expected to vote on the measure and passage is expected, with consideration and passage to follow later in the Senate. The Australia agreement is the first free-trade pact initiated under the Bush administration to reach Congress.
However, the first free-trade pact negotiated by Bush — covering five Central American countries and the Dominican Republic — remains bogged down in election-year politics. U.S. apparel importers are eager for the apparel-benefit-filled pact to be sent by Bush to Congress for consideration. About 20 percent of all apparel imported into the U.S. comes from the five countries.
On Tuesday, a contingent of trade and labor ministers endeavored to improve the Central American Free Trade Agreement’s political outlook in the U.S. The two dozen officials, in a meeting in Washington at the Inter-American Development Bank, huddled to discuss labor law enforcement in their region and other efforts to quell critics who argue that CAFTA’s labor standards are weak and put U.S. workers at a competitive disadvantage. Outside the bank, about two dozen anti-CAFTA protesters marched, chanting “CAFTA, no, workers rights, yes.”
It’s considered unlikely Bush will send CAFTA to Congress before lawmakers adjourn in early October because of electoral pressure on the issue of trade. If reelected, it’s expected that Bush would call a lame duck session of Congress to vote on the pact. However, if Democratic presidential candidate Sen. John Kerry is elected, he said he would renegotiate CAFTA with an eye on strengthening its labor and environmental rules.
The trade and labor ministers from Central America and the Dominican Republic had varying opinions about what should happen to CAFTA if Kerry wins.
“We obviously would have the hope…to find common ground,” said Milton Ray Guevara, the D.R.’s minister of trade, noting that Kerry, as a senator, voted in the 1980s and 1990s to expand apparel trade breaks in the region.
Meanwhile, the Africa bill also contains another apparel provision, called the collar-and-cuff rule, which directs the U.S. Customs service to grant duty-free status to apparel from the poorest African countries with collars and cuffs from non-African or U.S. suppliers. Duty breaks have been denied because Customs treated the collars and cuffs as components, not textiles.