With the AGOA’s Favorable Duty Rates, Apparel Importers Can Find
Greater Savings When Sourcing From African Countries
The cost of an imported product can vary tremendously when
the amount of duty to be paid is factored into the equation, and in the case of
apparel, it can run anywhere from an average of $16 to $32 extra for every $100
imported into the US, when made in a foreign country such as China.
The African Growth and Opportunity Act (AGOA) has a provision for imports of apparel when sourced from certain Sub-Saharan African countries, where such clothing originates from either African or US components. It provides for the duty-free treatment of these products which means rather than paying the additional $16-$32 in duties for every $100 of imported apparel, $0 in duties is instead owed.
Within the AGOA is a “Third Country Fabric” provision which allows
fabrics from other countries to be used in the manufacturing process and still
qualify for the benefit of “AGOA treatment,” i.e., duty free treatment, of the
product.
Last Friday, August 10, 2012, President Obama signed the
bill (H.R. 5986) which had been passed on August 2, 2012 by the House and
Senate to amend the African Growth and Opportunity Act’s (AGOA) “Third Country
Fabric Program” as well as to add South Sudan to the list of countries eligible
for designation under the AGOA.
With this passage, apparel importers can now continue to
place orders with African manufacturers with the knowledge that these duty savings
will continue for the next few years, saving them money, and perhaps saving us
consumers some as well.
Questions/comments?
Post below or email me at clark.deanna@gmail.com
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