Froman Calls for Long-Term Fabric Exemption in AGOA
The Obama administration would like to see Congress renew the African Growth and Opportunity Act third-country fabric provision for “as long as possible,” as part of a quick renewal of the underlying AGOA program, said U.S. Trade Representative Michael Froman on Feb. 26, during the signing of a U.S. trade pact with the East African Community (here). That bloc includes Burundi, Kenya, Rwanda, Tanzania, and Uganda. AGOA expires on Sept. 30, and the administration has long been tight-lipped about its preferences for changes.
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The fabric provision builds on the yarn-forward rule of origin by allowing least-developed AGOA beneficiaries to source inputs from across the globe, while still getting duty-free access to the U.S. market for apparel products. U.S. apparel and textile traders view this exemption as critical to the overall program (see 14091719). The Brookings Institution says the provision covers roughly 95 percent of AGOA apparel trade. The third-country exemption has only been renewed on short-term bases, and anxiety over a near-expiration in 2012 severely damaged AGOA trade (see 14040402).
Long-term renewal of the exemption will maximize use of AGOA preferences, said Froman in the comments, according to a transcript released by his office. The U.S. and sub-Saharan Africa should also “begin a dialogue” on market access reciprocity. Some lawmakers have encouraged South Africa to slash restrictions to U.S. agricultural exports (see 1412110001).
Meanwhile, the Office of the USTR said the East African Community agreement will strengthen cooperation on trade facilitation, sanitary and phytosanitary issues and some other non-tariff trade barriers (here). The pact will help the EAC implement the World Trade Organization Trade Facilitation Agreement, USTR said in a fact sheet. The agency is hoping to put the TFA in force this year, but more than 100 countries still need to ratify (see 1502240001).
Through the pact, the U.S. will help the EAC to improve food safety in hopes of fueling more agricultural exports to the U.S., said USTR. “Weak standards allow otherwise preventable plant and animal diseases to persist, effecting the health of Africans and preventing affected African agricultural products from being sold to consumers around the world,” said Froman. “Tackling these problems and meeting international standards will help EAC partner states increase food security and expand their exports.” Capacity-building is also an important part of the agreement, said USTR.