“Africa is in the spotlight – African designers make bright colored clothes that reflects who Africans are. Designers from the West are noticing that and hopping into the cultural and tribal trends…”
-- Romula Sadiq, Fashion Editor-in-Chief, “HauTe Fashion Africa.com”
I just submitted a paper to a fashion conference about the African Fashion Industry and the African Growth and Opportunity Act (AGOA), which is preferential trade agreement between the United States (US) and multiple Sub-Saharan African countries (SSAs).
Africa’s fashion industry is growing exponentially thanks to the internet, which has not only extended its reach, but has also provided a lens for the outer world to look in to Africa and in particular, Sub-Saharan Africa.
This has become ever-increasingly possible with rise in African “Fashion Weeks” including, “Mali Fashion Week,” “Joburg Fashion Week,” “Capetown Fashion Week,” and “Africa Fashion International,” which, according to Ms. Sadiq, have sparked a curiosity amongst Western designers seeking African inspiration.
AGOA was enacted with the hope that it would not only change the trade relationship between the US and SSAs, but that new opportunities would be created for millions of SSA families to build prosperity. Following three (3) expansions, AGOA has evolved into its current version known as “AGOA IV,” and unless another extension is implemented, it will expire in 2015.
The benefit of AGOA, as it applies to the African fashion industry, relates to a unique section providing for duty-free entry (i.e., a 0% duty rate) of textiles and apparel (TAP) when imported directly into the US from an SSA. (HTSUS, 2011) This means e.g., that for a $100 importation of women’s knit cotton shirts, normally subject to a duty rate of 19.7%, rather than costing a total of $119.70 to import [$100 for the shirts + $19.70 in duties], it costs only $100 thereby making it a less expensive product to bring into the US market and therefore, more attractive to the consumer.
This is not however, simply available to an AGOA member SSA. Rather, the US only makes TAP benefits available to those SSAs who have an enforcement mechanism to prevent the illegal transshipment of merchandise, as well as a “Visa Arrangement,” which is a system in place to ensure compliance with all export requirements under AGOA.
The types of TAP products that qualify for AGOA benefits is not universal either, but rather is limited to nine (9) categories. Generally speaking, AGOA requires that TAP are either sewn or assembled from yarns, thread, fabric and/or knit-to-shape components wholly “originating” from the US or an SSA, meaning that the product in all of its entirety must derive from the growth or manufacture of the US or an SSA.
Flexibility from this origination rule however, is granted to those countries which have Least Developed Country (LDC) status which allows non-African components to be used in the manufacture of TAP and yet still be AGOA eligible.
A helpful resource at the U.S. Department of Commerce,
Office of Textiles and Apparel, is Donald Niewiaroski, who is incredibly knowledgeable about the AGOA and in particular about the TAP provisions. (He may be contacted at Donald.Niewiaroski@trade.gov)
Don informed me that legislation was introduced recently to extend the LDC provisions through September 30, 2015. It also would make the new nation of South Sudan eligible for AGOA, whose President, Salva Kiir Mayardit, is in Washington this week for a special conference to promote development in South Sudan.
Similar legislation (HR 2493) has also been introduced in the House by Ways and Means trade subcommittee. According to Don, ranking Democrat Jim McDermott (Wash) and subcommittee chairman Kevin Brady (R-Texas) are hoping the legislation can be passed by Congress before lawmakers adjourn for the year.
Other senators co-sponsoring the bill are Foreign Relations Chairman John Kerry (D-Mass) and ranking member Richard Lugar (R-Ind) along with Sens. Ron Wyden (D-Ore), Roy Blunt (R-Mo), Dick Durbin (D-Ill), Scott Brown (R-Mass), Ben Cardin (D-Md), Johnny Isakson (R-Ga), Chris Coons (D-Del) and John Thune (R-SD).
Questions/comments? Feel free to post below or email me at clark.deanna@gmail.com
