African countries badly need US congressional action this year to allow them to continue exporting clothing to United States under a duty-free program, a top Kenyan official said.
The six-year-old African Growth and Opportunity Act, or AGOA, allows 37 sub-Saharan African countries to ship virtually all their goods to the United States without paying duties.
Two-way trade has increased 115% since the program began, driven largely by US oil imports from Nigeria, Angola and other AGOA producers. But many countries such as Kenya have seen their clothing shipments to the United States boom.
AGOA is on the books through 2015. But a key provision allowing African countries to ship clothing made with fabric and yarn from third countries expires in September 2007.
That has raised concern of additional African job losses on top of those in 2005 when the expiration of a global textile quota system allowed China and India to capture a bigger share of the US market, Kenyan Trade and Industry Minister Mukhisa Kituyi told Reuters.
African countries have not been able to produce their own fabric and yarn, he said.
African trade ministers in town for an annual trade forum with the United States lobbied members of Congress for an extension of the third-country provision, he said.
“The sooner it’s done the better,” Kituyi said, noting that clients will quickly turn to other suppliers if they perceive African clothing will no longer be competitive.
Kituyi, who chairs the African Union trade ministers group, also said preparations for the annual AGOA meeting should be revamped to give African countries more of a voice in the topics discussed.
“It’s a good thing when you give us new shoes, but listen to us about the shape of the shoes we need,” Kituyi said, referring to US offers of help.
Meanwhile, the United States and Rwanda signed an agreement on June 7 to deepen trade and investment ties.
“Rwanda in many ways is a model for what a developing country needs to do to harness trade to advance economic growth and development,” said Deputy US Trade Representative Karan Bhatia in a statement.
The World Bank’s “Doing Business 2006” report cited Rwanda as the top economic reformer in sub-Saharan Africa, USTR said. (Reuters)