TRALAC - Trade Law Centre

Mauritius: Talks On Zimbabwe And AGOA With the US

Thursday, 13 May 2004

Source: New Vision (Kampala)

Special presidential assistant on AGOA, Susan Muhwezi is keeping her fingers crossed that the US Congress passes the AGOA III Bill which seeks to extend the overall programme from 2008 to 2015.

The Bill also seeks to extend third country fabric provision for three years, from September 2004 to 2007, including a phase down of benefits in year three. The Congress is expected to approve the Bill within one to two weeks time.

Under the current law, least-developed AGOA beneficiary countries can use third country fabric in qualifying apparel until 2004. This flexibility was included in AGOAI, because few of these countries have fabric-making capacity.

"We had not yet developed our textile industry to produce fabric. We have been outsourcing from third countries. The extension of third country sourcing would help us much to prepare and produce our own fabric," Muhwezi said on Monday.

"That is very crucial for us. It is what we have been asking for because after the 2007 expiry, we would be able to source fabric from fellow African countries," she said.

US officials said the LDCs had expressed a strong desire to extend the third-country fabric provision, because sufficient fabric-making capacity still does not exist in the region, and because the countries are expecting a significant drop in orders with the elimination of world-wide apparel quotas in 2005.

The Bill will modify the AGOA rule of origin to allow use of non-AGOA produced collars and cuffs for all import categories. Sponsors of the legislation have agreed to discuss other items to include in this category to ensure that the rules of origin track commercial realities.

It will allow ethnic fabrics which are made on machines to qualify for AGOA duty-free treatment under AGOA's folklore provision.

It will also provide aid to develop sustainable infrastructure, transportation and telecommunication systems to increase trade capacity. It does this, in part, by encouraging the growth of the ecotourism industry in sub- Saharan Africa which is growing exponentially and is creating jobs and Africa hold a significant comparative advantage in this industry. Infrastructure which supports ecotourism will also support increased trade flows, officials said.

AGOAIII will help African farmers most of whom lack the technical expertise to be sure that their exports meet the strict sanitary/phytosanitary standards of the U.S.

The Bill directs the US President George Bush to assign 20 personnel to sub-Saharan Africa for the purpose of providing assistance to select AGOA countries to assist and advise them, so that their exports can meet U.S standards.

It will facilitate increased coordination between customs services at ports and airports in the United States and sub-Saharan countries to reduce time in transit and increase efficiency and safety procedures.

It will also allow AGOA beneficiary countries the continued use of inputs from countries which have a free trade agreement with the US and were former AGOA beneficiary countries.

It will further direct the administration to implement inter-agency trade advisory committee, including findings and statements of policy about the benefits to Africa of AGOA and supporting various sub-Saharan Africans efforts such as to reduce poverty, promote peace, attract investment and trade, and fight HIV/AIDS. Congressmen who have contended fiercely over economic and foreign policy issues this election year took turns praising the Bill, saying it will help Africans grow their export sectors and lead to increased standards of living on the continent.

An uncommon degree of bipartisanship as well as urgency dominated the House Ways and Means Committee as it held a "markup" amendment hearing on May 5 on The AGOA Acceleration Act.

The committee members voted unanimously to forward the Bill to the full House after approving several technical amendments introduced by Committee chairman Bill Thomas, extending the reach of duty- and quota-free African products into the U.S. market. They all agreed with Thomas that passage of the trade measure, also called AGOA III, was of critical importance to sub-Saharan Africa's continued economic advancement.

Thomas said, "I expect this Bill to move to the [House] floor and frankly become law without much opposition." He said AGOA aimed to liberalise to indeed free Africa.