User login

Apparel and footwear trade group urges Congress to extend AGOA now

June 11, 2020

The American Apparel and Footwear Association this week urged Congress to extend the African Growth and Opportunity Act for 10 years.

In a June 10 letter to the leaders of the House Ways & Means and Senate Finance committees, AAFA said extending AGOA -- set to expire in 2025 -- now would give companies “the necessary certainty and timeframe they need to grow a vertical, responsible, and competitive industry in Africa up to and past 2025.”

“Even though the AGOA expiration date is five years away, U.S. investment in the region already faces mounting uncertainty,” the letter states. “Companies are poised to diversify out of China, and Africa is a logical place for many of them. The on-again, off-again nature of the program before the ten-year renewal was extremely disruptive and meant the industry was not able to take full advantage of the first 15 years of the program.”

As more companies take advantage of AGOA and its “third country fabric provision,” AAFA states, “the quota fill rate will be significantly increasing in the coming years. Therefore, we also suggest raising the existing 3.5% limit to at least 4.5%, with a growth provision, so that it not be a constraint going forward.”

AAFA says it views AGOA as a “bridge” to free trade agreements “such as the U.S.-Kenya trade agreement,” which the Trump administration has said it hopes to serve as a model for free trade deals with other African countries.

“With the coronavirus crisis and the upcoming trade negotiations between the U.S. and Kenya, continued certainty in this region is critical now more than ever,” the letter states.

AAFA says it represents “more than 1,000 world famous name brands” in the apparel, footwear and “other sewn products” industries.

Not a subscriber? You can request 30 days free access to exclusive, behind-the-scenes reporting on trade policy in the Biden era.