African Growth and Opportunity Act (AGOA)

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Purpose

 The purpose of this legislation was to assist the economies of

sub-Saharan Africa and to improve economic relations between the
United States and the region

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Eligibility

 The President of the United States have to determine which sub-

Saharan African countries would be eligible for AGOA on an
annual basis
 Currently (August 2009), there are 41 AGOA-eligible countries.
 A 'Visa System' for exporting apparel and certain textile to the US
under the AGOA duty-free
 The majority (45 of 48) of Sub-Saharan African countries are
currently GSP eligible. 41 of these are also AGOA-eligible.

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 The Generalized System of Preferences (GSP) program
 AGOA expanded market access for textile and apparel goods into
the United States for eligible countries.
 However, the dismantling of the Multi Fibre Agreement's world
quota regime for textile and apparel trade in January 2005 reversed
some of the gains made in the African textile industry due to
increased competition from developing nations outside of Africa,
particularly China.

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 AGOA was set to expire in 2008. In 2004, the United States Congress
passed the Act, which extended the legislation to 2015. The Act's
apparel special provision, which permits lesser-developed countries
to use foreign fabric for their garment exports, was to expire in
September 2007. However, legislation passed by Congress in
December 2006 extended it through 2012.

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AGOA Eligible countries

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AGOA apparel Certified countries

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Forum

 The Forum is held in Washington every other year, and in an

AGOA eligible African country in the other years. So far, the Forum
has been held three times in Washington, and once in Mauritius,
Senegal, Ghana and Kenya in 2009.

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 Others claim AGOA encourages fraud by making Chinese and Indian clothing manufacturers label their goods
"Made in Kenya" and transshipping them to the United States through Kenya.
 The balance of trade statistics show that the AGOA act is benefiting countries in Africa. In FY2008, the US
Exported $17,125,389 in goods to the 41 AGOA countries, and the US imported $81,426,951 for a balance of
$64,301,562 in favor of the AGOA countries.

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Wearing Apparel provisions

 Visa System

 As of May 2006, 25 of the 37 AGOA-eligible countries had complied

with this condition and had obtained the necessary visa system,
allowing them to export apparel to the US duty-free under AGOA

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AGOA's 'Wearing Apparel' Rules of Origin

 Apparel and textiles are not included under the General System of
Preferences (GSP) program, on which AGOA is based

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The main features of AGOA's 'wearing apparel'
provisions
 AGOA-eligible Sub-Saharan African countries first be certified as
having complied for the 'Wearing Apparel' provisions-Visa
licensing
 Apparel made in qualifying Sub-Saharan African countries from
U.S. fabric, yarn, and thread is provided with duty-free and quota-
free access to the U.S. market without limitations

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 This market access into the U.S. is subject to a cap of 1.5% of overall U.S.
apparel imports, growing in equal yearly increments to 3.5% of overall
imports by 2008 and now its 6.43675 percent
 lesser-developed countries – 3.5%

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 Preferential treatment-embroidered or subjected to stone-washing, enzyme washing, acid washing, perma-
pressing, oven-baking, bleaching, garment-dyeing, screen printing, or other similar processes also eligible for
duty-free benefits
 simply because the article contains certain interlinings of foreign origin, as long as the value of such interlinings
(and any findings and trim-mings) does not exceed 25 percent of the cost of the components of the assembled
apparel article.

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 De Minimis Rule -the article contains fibers or yarns not wholly formed in the U.S. or in one or
more AGOA-beneficiary SSA countries if the total weight of all such fibers and yarns is not more
than 10 percent of the total weight of the article.

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 For Lesser Developed Countries – their GNP per capita being less than $ 1,500 in 1998 as
measured by the World Bank.

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AGOA IV
 Apparel made of U.S. yarns and fabrics;
 Apparel made of sub-Saharan African (regional) yarns and fabrics, subject to a cap until 2015;
 Apparel made in a designated lesser developed country of third-country yarns and fabrics, subject to a cap until 2012;
 Apparel made of yarns and fabrics not produced in commercial quantities in the United States;
 Certain cashmere and merino wool sweaters;
 Eligible handloomed, handmade, or folklore articles and ethnic printed fabrics; and
 Textiles and textile articles produced entirely in a lesser-developed beneficiary country.

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