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Apparel makers seek AGOA fabric rule extension
Apr '12
Apparel manufacturers in Africa are unhappy over the apathetic attitude of their Governments in obtaining the nod of the US Congress for extension of the third country fabric rule under the African Growth and Opportunity Act (AGOA) till 2015.

The AGOA act of 2000 allows several sub-Saharan African nations to duty-and-quota free export around 6,500 product lines, including apparels, to the US.

Apparel manufacturers argue that the lapse of the third country fabric provision under the AGOA would adversely impact the apparel industry of African countries.

The rule, which is set to expire in September this year, allows apparel firms in African nations to duty-free export garments made using inputs imported from other parts of the world, to the US.

If the provision lapses, African nations would not be able to use fabrics and raw materials imported from other countries for manufacturing apparels meant for duty-free export to the US. This would severely affect the large-scale apparel exports from these countries to the US.

In view of the same, the African Cotton and Textile Industries Federation (ACTIF) has urged the Governments of African countries to lobby for waiver of the rule of origin for raw materials post August 2012.

Kenya is a key beneficiary of the AGOA provision and as per the Export Processing Zone Authority (EPZA) data, apparel exports to the US grew by 26.5 percent to Sh 16.1 billion in 2010 from exports worth Sh 12.7 billion in 2009.

According to the Kenya Apparel Manufacturers Exporters Association, failing to secure extension of the third country fabric provision would result in closure of 15 apparel firms, resulting in a loss of 40,000 jobs and Sh 18.5 billion in revenues.

ACTIF said the extension of third country fabric rule is one of the priority bills pending before the US Congress. It expressed optimism that the US Congress would extend the provision.

Fibre2fashion News Desk - India

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