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The AGOA expands the scope of preferential access of Africa’s exports to the United States in key areas such as clothing.
AGOA provides duty-free and quota-free treatment for eligible apparel articles made in qualifying sub-Saharan African countries through 2015. Qualifying articles include: apparel made of U.S. yarns and fabrics; apparel made of sub-Saharan African (regional) yarns and fabrics until 2015, subject to a cap; apparel made in a designated lesser-developed country of third-country yarns and fabrics until 2012, subject to a cap; apparel made of yarns and fabrics not produced in commercial quantities in the United States; textile or textile articles originating entirely in one or more lesser-developed beneficiary sub-Saharan African countries; certain cashmere and merino wool sweaters; and eligible handloomed, handmade, or folklore articles, and ethnic printed fabrics.
Under a Special Rule for lesser-developed beneficiary countries, those countries with a per capita GNP under $1,500 in 1998, will enjoy an additional preference in the form of duty-free/quota-free access for apparel made from fabric originating anywhere in the world. The Special Rule is in effect until September 30, 2012 and is subject to a cap. AGOA IV continues the designation of Botswana and Namibia as lesser-developed beneficiary countries, qualifying both countries for the Special Rule.
AGOA IV provides for special rules for fabrics or yarns produced in commercial quantities (or “abundant supply”) in any designated sub-Saharan African country for use in qualifying apparel articles. Upon receiving a petition from any interested party, the International Trade Commission will determine the quantity of such fabrics or yarns that must be sourced from the region before applying the third country fabric provision. It also provides for 30 million square meter equivalents (SMEs) of denim to be determined to be in abundant supply beginning October 1, 2006. The U.S. International Trade Commission will provide further guidance on how it will implement this provision.
Preferential treatment for apparel took effect on October 1, 2000, but beneficiary countries must first establish effective visa systems to prevent illegal transshipment and use of counterfeit documentation, and that they have instituted required enforcement and verification procedures. Specific requirements of the visa systems and verification procedures were promulgated to African governments via U.S. embassies on September 21, 2000. The Secretary of Commerce is directed to monitor apparel imports on a monthly basis to guard against surges. If increased imports are causing or threatening serious damage to the U.S. apparel industry, the President is to suspend duty-free treatment for the article(s) in question. The U.S. Government is now reviewing applications for approval of the required visa and enforcement mechanisms from AGOA eligible countries.
How does AGOA benefit African countries?
AGOA passed as part of The Trade and Development Act of 2000 provides beneficiary countries in Sub-Saharan Africa with the most liberal access to the U.S. market available to any country or region with which we do not have a Free Trade Agreement. It reinforces African reform efforts, provides improved access to U.S. credit and technical expertise, and establishes a high-level dialogue on trade and investment in the form of a U.S.-Sub-Saharan Africa Trade and Economic Forum.
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