Whenconsidering Africa/US trade relations it's important to note that there are 49independent countries in Sub-Saharan Africa, 39 of which meet eligibilityrequirements for the US African Growth and Opportunity Act (AGOA) enacted in2000. AGOA provides duty free access to US markets for most products comingfrom countries qualifying, including textiles, apparel and home fabrics. AGOAgives the US an advantage over the EU and other developed regions of the worldrequiring best practices in research, product development, manufacturing,logistics, environmental stewardship, workplace safety and reduced corruption.These practices combined with duty-free access make AGOA-certified countriescompetitive in world markets and attractive to US buyers.
Therewas a favourable balance of trade for sub-Saharan countries in 2013. Africanexports to the US were $39 billion down 20.8% over 2012 but up 53% since 2003.Shipments from the US totalled $24 billion up 6.9% over 2012 and a whopping250% over 2003. The future of textile, apparel and home fabric trade betweenthe US and sub-Saharan Africa depends on a number of factors, some definableothers illusive.
AGOAhas had an overriding influence on trade and business relations between the USand sub-Saharan African countries. This mutually advantageous trade agreementhas done more for the competitiveness and economic development of thesecountries than has years of foreign aid. Trade agreements like AGOA encouragecompetition driving product development, efficient manufacturing and betterbusiness practices. As we move into the 21st century, the digitalage is driving B2B and B2C marketing platforms and making old ways of doingbusiness obsolete.
TheInternet is a game changer challenging everything we thought we knew aboutoutsourcing and international trade. The power of this new paradigm isundeniable. The AGOA certified countries of Africa will be on the front edge ofthese changes, begging the question, is this a plus or minus for Africantextiles and apparel? I suggest the former. Consumers drive the economies ofthe world in ways we only imagined a few years ago.
Forexample, Amazon, arguably the world's most successful on-line retailer, hasmined the largest customer database in the world delineating consumerdemographics and purchase preferences, giving them a decided edge over theircompetitors. This research prompted Amazon to announce the location of theirfirst brick & mortar store in the US. The store will serve as adistribution centre for on-line customers and a touch & feel outlet fortactile sensitive textile and apparel products.
Whyis the Amazon story important for African companies, because it highlights thesurging importance of digital outsourcing and marketing? India and China haveexperienced exponential growth in on-line trading both business2business andbusiness2consumer. AGOA will be renewed next year in a form reflecting thischanging paradigm. The trend line for US/African trade in textiles and apparelwill remain positive with temporary spikes and dips reflecting economic andpolitical events. This renewal will compliment Trade Africa, the recenttrade initiative announced by President O'Bama.
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A Dublin based women's sportswear company took an initiative to improve the early links in the cotton supply chain. They educated farmers on the logistics, processing and the pricing mechanisms employed by industrialized nations, established marketing cooperatives to initiate best practices in cultivating, harvesting, ginning and logistics, also enhanced links in the fibre to retail supply chain and adopted AGOA business standards to make East Africa more competitive. AGOA closes the textile fibre loop from farm or spinneret to retail by training sub-Saharan countries to be efficient producers utilizing a full toolbox of best practices and providing trade advantaged markets in the US.
Then there's the fashion and design side, African designers have come into their own in recent years. The international organizer of Africa Fashion Week to New York last month highlighting African designers and manufacturers with world-class runway shows, an event being repeated in fashion capitals of the world.
"In 2009, Adiree founded the concept of hosting international Africa Fashion Weeks (in fashion capitals), to place structure around Africa's fashion industry and promote international economic partnerships while promoting brands from Africa on a global scale. In 2009, began with the birth of Africa Fashion Week in New York (AFWNY) , the premier capital for Fashion, Entertainment, and Lifestyle brands with plans of Africa Fashion Week | Miami | LA | London | Paris |Milan | Berlin| Tokyo" (AFW website)
Africa has the opportunity to "brand" itself as the competitive alternative to India or China. They're geographically closer to the US presenting one-stop shopping for goods produced under AGOA certified terms and conditions. This is unique and salient for textiles and even more so for apparel production which, in recent years, has been tainted by lapses in worker safety, child labour and environmental stewardship. The notion of national branding for African textiles and apparel is timely. Think of New Zealand Wool, Thai Silk, US Cotton, Mongolian Cashmere, Peruvian Alpaca et al and one begins to appreciate the power of branding supported by a strong quality control program. Africa has AGOA, no other country in the world has a regional QC program of this scope, an idea whose time has come.
In the US we have successfully "branded" a commodity textile fibre. The program adds value for farmers, spinners, knitters/weavers, apparel makers and home textile producers all of whom are required to adhere to QC standards in order to use the logo or slogan on their products. In Africa, I can imagine a collectively funded Buy African program that would with a trademark standing for AGOA enforce business practices and product quality control.
With all that is positive about the future of African textiles and apparel and their growing partnership with the US, there is a cautionary development threatening this outlook. The exponential spreading of the deadly Ebola virus in West Africa is problematic. The World Health Organization (WHO) is suggesting that the virus has the potential of spreading throughout the continent resulting in tens if not hundreds of thousands of fatalities including workforce personnel confined to limited workspace.
The mention of a world health issue in an article about African and American textile trade would normally be out of bounds but the Ebola issue is breaking those boundaries, an article about Africa can't avoid the subject. It becomes one more issue along with workplace safety, environmental stewardship, child labour and violent weather. An epidemic of these proportions would have an enormous impact on the economies of the affected countries. We're seeing this already in West African countries of Liberia, Sierra Leone and Guinea with introductory cases in Senegal. The US and other developed countries are not immune they are mobilizing their resources to contain the virus and shut it down.
Fibre agriculture, textiles and apparel continue to support the economies of many developing countries but none have the advantage of functioning within a single continent with collective controls mandated by an AGOA trade agreement. The challenge now is for sub-Saharan Africa to organize under AGOA and present a strong, competitive and unified front to global markets.
About the author:
Nick Hahn is responsible for branding US Cotton Fibre, "Cotton, The Fabric Of Our Lives" when serving as President & CEO of Cotton Incorporated, New York, NY-USA. Honoured as one of the top 25 textile executives of the quarter century by Textile World magazine in 1998, he went on to found HAHN INTERNATIONAL, Ltd, a consulting group focused on natural fibre markets of the developing world.
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