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Africa hopes for AGOA renewal

Africa's textile and apparel exports to the United States could quadruple over the next decade through an extended duty-free trade treaty.The trade program known as the African Growth and Opportunities Act (AGOA), currently before American lawmakers, provides eligible sub-Saharan countries duty-free access to the world’s top apparel market, giving Africa a competitive edge over suppliers such as Bangladesh and Vietnam.

AGOA was established in 2000. The program expires on September 30, 2015. About 40 African countries are eligible to take part in it and it could be extended another 10 years. This will mean Africa will be able to quadruple its exports, creating another 5,00,000 new jobs.

Last year, US clothing imports from sub-Saharan countries were up nearly six per cent from 2013, as countries such as Lesotho, Kenya, Ethiopia and Tanzania participated in the program.

Africa has lower labor costs and abundant raw materials, such as top-quality cotton from Uganda, but congested ports, a poor road network, lack of skills and old technology are a hindrance.

Asia may face rising costs but is still way more competitive than Africa, especially on productivity, quality and product range. An extension of AGOA will please Asian firms with factories in Africa.

trade.gov/agoa/

 
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