TRALAC - Trade Law Centre

AGOA advice for clothing exporters

Thursday, 15 March 2001

Source: Business Report

Durban - South African companies had to become internationally competitive to capitalise on the eligibility granted for local apparel to enter the US under the Africa Growth and Opportunity Act (Agoa), Jack Kipling, the chairman of the Clothing Export Council, said this week.

Duty- and quota-free entry gave South African companies an average 17 percent price advantage over Far Eastern suppliers. Exposure to global markets would speed up the drive to become more internationally competitive, he said.

The order giving the stamp of approval for South African apparel made from regional fabric was signed after South Africa satisfied the US authorities that it would combat fraudulent claims.

"It is also crucial for South Africa to develop a positive reputation for quality and reliability," Kipling said. "Growing within our capabilities will be better for the long-term future than excessively rapid growth that could result in a negative image on performance."

The focus would now have to shift to retaining eligibility by ensuring that other countries did not use South Africa as a transshipment route.

Edwin Smit, a spokesman for Alec Erwin, the trade and industry minister, said granting eligibility to South African apparel had been contingent on the country having measures in place to deal with transshipment fraud.

Measures included penalties and the installation of a confidential line to report irregularities.

Hassim Randeree, the president of the Clothing Federation of South Africa, said Agoa would create immediate opportunities for 60 000 jobs in the clothing sector. Another 200 000 jobs could be created over the next five years.