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President Obama reinstates AGOA benefits for Madagascar

June 30, 2014 (Madagascar)

The US President Barack Obama has reinstated Madagascar’s eligibility for African Growth and Opportunity Act (AGOA) benefits, effective immediately, according to a press release from the Office of the U.S. Trade Representative.
 
Following a 2009 coup d’état, the African island nation of Madagascar was removed from the list of countries eligible to get AGOA benefits, on January 1, 2010. Subsequently, successful elections in late 2013 led to the formation of Madagascar’s first democratic government since the 2009 coup. 
 
Since then, the United States has taken steps to normalize relations with Madagascar, lifted all coup-related restrictions on direct assistance to the Malagasy Government, and invited President Rajaonarimampianina to attend the U.S.-Africa Leaders Summit in Washington in August.
 
The decision to reinstate Madagascar’s AGOA eligibility recognizes the nation’s return to democratic rule, as well as President Rajaonarimampianina’s commitment to promote transparency, combat corruption, and begin rebuilding Madagascar’s economy, the statement said.
 
“We are pleased that Madagascar has returned to the family of AGOA nations. We are hopeful that Madagascar will take advantage of AGOA’s potential to create employment, expand bilateral trade, and contribute to the economic well-being, security, and health of its people,” said U.S. Trade Representative Michael Froman.
 
AGOA is a US preferential trade program established in May 2000 that provides duty-free access to the US$3 trillion American market for thousands of products from eligible sub-Saharan African countries.
 
One of the objectives of the AGOA is to support sub-Saharan African economic development through trade and investment. The program offers tangible incentives to sub-Saharan African countries for undertaking difficult political and economic reforms that promote long-term growth and development.
 
Until 2009, garment and textile factories in Madagascar had a turnover of US$ 600 million. Of this, the industry exported around $275 million worth of duty free goods to the US under the AGOA.
 
The clothing and textile industry in Madagascar provided direct employment to over 50,000 workers and indirect employment to over 100,000 people. However, some companies collapsed after the suspension of AGOA benefits to the country.
 

Fibre2fashion News Desk - India

 
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