Relief for textile manufacturers

The US Senate's move allowing African countries to continue exporting garments to the United States duty free until 2015 has given a new lease of life to Southern Africa's textile industry, a senior official told IRIN on Thursday. Last week the Senate extended the provisions of the Africa Growth and Opportunities Act (AGOA) from 2008 to 2015 by endorsing the AGOA Acceleration Act of 2004, also known as AGOA III. AGOA III makes provision for African countries to continue importing "third party" raw materials for a further three years. Most Southern African countries source fabrics mainly from Asia, manufacture garments locally, and export to the US. "Many of our factories faced jeopardy; orders were being cancelled; many garment manufacturers were considering downsizing - the extension is indeed joyous news. It will perhaps encourage more manufacturers to set up plants in Maseru [Lesotho's capital]," said Mosuoe Moteane, Lesotho's ambassador to South Africa. Peter Draper, a political economist with the Johannesburg-based South African Institute of International Affairs, welcomed the extension and said, "The approval of AGOA III will offer more certainty for traders exporting to the US markets." The third-party provision was due to expire in September. Since its enactment in 2000, AGOA has provided duty- and quota-free access to a wide range of products from African countries that meet US political and economic benchmarks. The value of African garment exports to the US rose from about US $600 million in 1999 to $1.5 billion last year. Ambassador Robert Zoellick, the US trade representative, noted at a press briefing in Washington that "timing was very, very important" in the passage of the AGOA III legislation, as some textile companies had already been considering moving out of Africa because the third-party provision was set to expire. According to US officials, AGOA III now awaits President George Bush's signature for its promulgation.