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US may expand duty-free facility, AGOA countries jittery
Aug '10
41 countries in the sub-Saharan African continent are beneficiaries of the Africa Growth and Opportunity Act (AGOA), under which, a host of good, which includes textiles and clothing can be exported duty-free to the US, which is the biggest economy in the world.

But now, the US government is contemplating extending the duty-free facility to low-cost producers in the Asian countries like Bangladesh, Nepal and Cambodia. This competition will prove to be hard to withstand for the textile and clothing sector in Kenya.

Textile and apparel exports from Kenya to the US have been going only one way; downhill. They have plunged from a high of Sh21.7 billion (US $272 million) in 2003 to a low of Sh14 billion last year.

African experts aver that even without the duty-free benefits, the Asian countries have squeezed out the countries tied together by the AGOA agreement and now extending this facility to these Asian countries will sound the death-knell for the African textile sector.

AGOA was initiated with the express purpose to help develop these African countries, but for various reasons the scheme was never exploited by the beneficiary countries. The US has opened nearly 6,400 lines of products under the scheme.

While apparel exports from Asian countries have skyrocketed, those from African countries have nosedived. In the period between 2004 and 2009, clothing exports from Bangladesh grew by 71 percent and Vietnam 98 percent, that from Africa dropped by 48 percent.

Fibre2fashion News Desk - India

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