Washington, DC — U.S. apparel and textile imports from Africa have increased significantly in the two years since the Agoa trade provisions took effect. Major exporters to the U.S. include Kenya, Lesotho, Mauritius, South Africa and Swaziland. (Exports from Madagascar dropped by nearly 50 percent as a result of uncertainty about the political situation in that country.) Among the major U.S. companies that are now buying apparel from Africa or investing in apparel production are Levi Strauss, Sara Lee, Victoria's Secret, The Gap and Nordstrom.
But exporting to the U.S. requires more than manufacturing a quality product and meeting customs requirements. Suppliers to the U.S. market must also be able to meet social responsibility requirements and new security requirements.
The American Apparel & Footware Association, a national trade organization that represents the apparel and footware industry, has also been advising its members that key provisions of Agoa are expected to change in the next two years. At the moment, with the exception of South Africa and Mauritius, most African apparel makers use inputs from Asia. There are incentives in the Agoa legislation designed to promote African production of fabrics and yarns, but so far no significant commercial production of these inputs has begun in Africa.
By September 2004 the "rules of origin" in the Agoa law will require that all African apparel suppliers to the U.S. market use fabric and yarns made either in Africa or imported from the United States. That provision could put some African suppliers out of business.
But Congress could change those rules of origin requirements before the September 2004 deadline. Another possibility is that new rules of origin could be developed for the countries that will form part of the new trade agreement that is being negotiated between the U.S. and Southern Africa. As Steve Lamar, senior vice president of the American Apparel & Footware Association, explains, all these factors could decide which countries will be the most effective exporters to the U.S. market. He spoke to Jim Cason.
What are your members hoping to achieve at the Agoa meeting?
There is interest in Africa generated by the Agoa legislation. But also questions about how it will be implemented. We have members who are attending the Agoa meeting, exploring linkages with Africa, business opportunities.
We are hoping that this meeting will provide an opportunity to offer a greater understanding of the requirements to be a successful supplier to U.S. companies. U.S. companies are looking to make sure suppliers are able to get the social responsibility requirements right, the new security requirements right, that companies are also able to meet the customs procedures. And all of these, of course, are requirements in addition to quality and other issues.
What are the security requirements? Are these related to September 11?
In our industry we always pay close attention to the security of cargoes. We want to make sure, for instance, we don't get narcotics introduced into a cargo. Now in the post-9/11 circumstance there is even more focus.
What do you mean by social responsibility?
We are encouraging companies around the world to be responsive to concerns about social responsibility. I know a lot of U.S. companies I have spoken to who will tell me they don't even consider a factory if they don't meet the social requirement.
So for instance we have on our web site information about the Worldwide Responsible Apparel Production, or Wrap program. [An independent program that offers factories the opportunity to be certified as complying with basic standards of labor practices, factory conditions and environmental protections.]
Both South Africa and Mauritius have signed up for that program. If a company is looking at a supplier, say for example in Senegal. They have to ask themselves, are the factories in Senegal putting into place procedures to allow them to meet the certification requirements, the inspection requirements of a social responsibility program?
When you say there are questions about how AGOA will be implemented, what do you mean?
One question is what future is there for Agoa? We are alerting our members that over the next 18 months we could see the rules of origin for some countries changing.
Are you referring to the September 2004 deadline in the Agoa legislation after which all African apparel exports to the U.S. will have to use yarns or fabrics made in either Africa or the U.S., to be eligible for the Agoa benefit?
Right now, South Africa and Mauritius have different rules than other countries. For instance, if you are making a garment in Namibia or Botswana, you can use anybody's fabrics. If you are in South Africa or Mauritius you can only use U.S. or African fabric.
There are companies in South Africa making apparel with U.S. fabric? Is that common?
I'm aware of specific examples of companies in South Africa and in Mauritius. I would say that one of the things we are focusing on is being able to produce in Africa. Many of our members might produce there, use U.S. products and sell products to third countries such as India.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
But all the countries will have to source their fabric from either Africa or the U.S. after September 2004?
Right. Not only is there the September 2004 deadline for third country sourcing, but also it is very likely the U.S. will negotiate a free trade agreement with Botswana, Lesotho, Namibia, South Africa and Swaziland. Congress could extend or modify the September 2004 date. Or when the free trade agreement enters into effect for countries in Southern Africa that could change the rules of origin for those countries. For those countries it could be the case that they don't have to worry about the origins of the fabrics.
What we are doing is alerting our members that in a little less than two years we are going to see changes in the rules of origin.
With all of these changes, will Agoa still be relevant in two years?
It will still be relevant for those countries not in any other trade preference area. For Kenya or Uganda it is relevant. Certainly Mauritius is not in any other trade preference area.
What do your members think about these rules of origin requirements?
Many of our members feel that complicated, difficult rules of origin drive people out of trade areas, rather than driving them into them.
