US Bill Pushes For Special waiver On African Garments

In both the US senate and House of Representatives, a new bill has been introduced seeking to advance the extension of a special waiver aimed at allowing duty-free importation of African garments made using fabric from other countries.

The Bill was tabled last week by a group of senior lawmakers from both houses raising hope for textile exporters including some East African countries where production of cotton remains insufficient.

The rule popularly known as the Third-Country Rule of the preferential African Growth Opportunity Act (AGOA) initiative is scheduled to lapse in September threatening to lock out the bulk of textile imports from eligible African states.

“This is a win-win legislation that builds upon our nation’s goal of strengthening economic relations with Africa, while ensuring that our regional trade agreement with Central America and the Dominican Republic continues to succeed,” Senator Orrin Hatch, an Utah Republican.

The legislation seeks to renew the waiver until September 2015, when the entire AGOA will be up for renewal.

Without the Third-Country Rule, countries that manufacture garments from imported fabric would be locked out of the lucrative US market.

Though the Act originally covered the eight-year period from October 2000 to September 2008, amendments by then US President George Bush in July 2004 extended it to 2015.

“This must-do legislation has strong bipartisan and broad industry support. It will benefit US global competitiveness, aid US employment and global development, and strengthen our ties with 55 US trading partners in Africa and the Western Hemisphere,” House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said in a statement.

Also the US Secretary of State Hillary Clinton says President Barack Obama’s administration favours extension of the trade rule that has helped to improve trade with Africa under the AGOA initiative.

The apparel firms accounted for 80.3% of the 32,251 employees at the Export Processing Zones (EPZ) by end of 2011, the Economic Survey 2012 shows.

For example, to make cotton-based garments, textile firms in Kenya have to obtain 90% of cotton from regional markets such as Tanzania, Uganda, Sudan and Egypt.