US hints at renewing AGOA fabric provision

21 Jun '12

2 min read

US President Barack Obama has given positive signals for renewal of the Third Country Fabric provision under the African Growth and Opportunities Act (AGOA), which is being eagerly awaited by Africa’s ailing textile industry.

The scheduled expiry of the provision in September this year has led to a considerable fall in apparel orders to African suppliers, as buyers in the US do not wish to associate with producers facing supply irregularities.

The provision allows garment producers in the AGOA member nations to procure fabric from Asia for producing garments for exports, thus helping them to benefit from the cost and quality efficiencies of the Asian textile industry.

In an effort to handle the pressure of looming expiry of the provision, some African firms are cutting their workforce to reduce costs, while some others are struggling to sustain their operations.

Last week, around 600 delegates and representatives from AGOA member nations assembled in Washington for a meeting to discuss the third country fabric provision and its future.

During a State Department media briefing in Washington ahead of the meeting, US Deputy Trade Representative, Ambassador Demetrios Marantis, said the Obama administration is very much in favour of renewing the provision, and it is on the priority list of the administration.

He said they have been trying hard to persuade the US Congress to clear the bill for renewal of the provision and would continue their efforts to get it renewed at the earliest, so as to earn clarity and certainty for the buyers willing to import garments from Africa.

Mr. Marantis said the US President is set to sign the renewal agreement as soon as it is placed before him, after being passed by the Congress. The Trade representative said he believes the issue would be as important for their African counterparts as they depend on third-country fabrics for production, which greatly drives growth and opportunities in Africa.

Fibre2fashion News Desk - India

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