US fashion companies urged the early renewal of a trade program that allows thousands of African products to enter the world’s biggest economy duty free, saying that a longer-term arrangement would boost investment in the region.
US officials have stated that the African Growth and Opportunity Act, which was first passed in 2000, may be updated or its eligibility requirements revised before it expires in 2025.
In a recent poll, more than 45 per cent of participants warned that the uncertainty surrounding renewal had caused them to restrict their sourcing from AGOA members.
About 60 per cent of respondents said that AGOA’s transient character hindered them “from making long-term investments and sourcing commitments in the region.” The US Fashion Industry Association and Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware, polled 30 chief executives of major US garment companies to get to this conclusion.
In the event that the trade programme is not renewed by June of next year, another 45 per cent anticipate reducing sourcing.
In order to encourage investment throughout the continent, South Africa asked the US administration to take an early extension of the programme into consideration last week.
About 40 per cent of survey participants consider AGOA to be “essential” when selecting whether to purchase from program-eligible nations.
According to a US International Trade Commission (USITC) assessment from April, the top exporters of apparel under the AGOA in 2021 will be Ethiopia, Kenya, Lesotho, Madagascar, and Mauritius. Exports in that year were US $ 1.4 billion, up from US $ 939 million in 2001, according to the report.
Uncertainty about apparel-provision renewals in AGOA slowed growth in apparel trade from benefiting nations, the USITC found.