AGOA suspension has chilling effect on T&G sector

02 Mar '10

1 min read

Unemployment levels in the textile and clothing sector in the African island nation of Madagascar is reaching unprecedented levels since the US government suspended Madagascar country from a preferential trade agreement with the US.

Textile and garment factories which had a turnover of US $600 million, half of which was derived from exports to the US, provided direct employment to over 50,000 workers and indirect employment to over 100,000 people.

The US administration suspended the country from drawing incentives in exports to that country under the African Growth and Opportunities Act (AGOA), which permitted zero-duty shipments to the biggest economy in the world.

With each passing day, textile and apparel factories are laying-off workers as lead times of orders taken before the suspension came in to effect, draw to a close. The US administration drew the line, after an illegitimate government seized power in the country.

This suspension will have a direct bearing on economies of other neighbouring countries like Mauritius, Swaziland and Lesotho, since many of the raw materials to manufacture textiles and clothing were imported from these countries.

Fibre2fashion News Desk - India