The US may suspend benefits to Ethiopia under the African Growth and Opportunity Act (Agoa). This would threaten Ethiopia’s aspirations to become a light manufacturing hub and dent hard-won economic gains in a nation once a byword for hunger and poverty. Though Ethiopia is not a large global supplier, suspension of its US trade status would be yet another problem on the list for global fashion brands such as The Children’s Place, Tommy Hilfiger and Calvin Klein as Covid-19 disrupts manufacturing capacity, ports and supply chains.

Agoa gives sub-Saharan African nations duty-free access to the US if they meet criteria including removing barriers to US trade and progress towards political pluralism. Over the past decade, Ethiopia has spent billions constructing a dozen industrial parks and related infrastructure. Some factories produce goods for fashion giant PVH, owner of the Calvin Klein, Speedo and Tommy Hilfiger labels.

Ethiopia exported about $237m worth of goods duty-free to the US under Agoa in 2020, more than 90 per cent of it textiles and apparel. Now the US is pondering suspending Ethiopia’s duty-free market status, citing abuses and a growing famine in the war-ravaged northern Tigray region. An Agoa suspension may hurt US companies trying to diversify production from Asia by relocating or expanding to Ethiopia.