Following a US hearing on renewing and revitalising trade preference programmes such as the African Growth and Opportunity Act, Just Style finds out why the apparel industry is eager for it to be renewed before its 2025 expiration date and ideally with a ten-year-plus extension period.
United States Fashion Industry Association president Julie Hughes tells Just Style the recent US hearing on AGOA was “really important” for the wider apparel sector and adds the testimony supplied by manufacturer SanMar Corporation’s general counsel and corporate secretary Melissa Nelson was “really compelling”.
Nelson told the hearing that AGOA’s 32 countries have “so much potential” but the US won’t invest when the benefits of the trade agreement could expire before a return on investment. ...
Why AGOA should be renewed for at least ten years
Hughes shares the USFIA “absolutely supports” the renewal of AGOA for at least ten years and “as soon as possible”, plus she’d like to see the retroactive renewal of Generalized System Preferences (GSP).
She highlights that it is slated to expire at the end of September 2025, stating: “This may seem like a long time from now, but companies make investment decisions many months in advance.
A possible expiration of AGOA would cause great harm to the region, as evidenced by USFIA’s benchmarking survey,” Hughes told Just Style.
“Indeed, one need only look at the job loss in Africa as a result of the last minute renewal in 2012 of the third country fabric provision, to see that further delay in a renewal of AGOA will discourage continued sourcing and new investment, resulting in a loss of trade and jobs in both Africa and the United States. ...
AGOA’s success to date
The USFIA boasts more than two decades of partnership between its members and key suppliers in the AGOA region with Hughes sharing that fashion brands and retailers very much want to maintain partnerships on the continent, and to engage in new ones.
She says:
AGOA has been an undoubted success, providing US brands with a viable alternative sourcing option and providing tens of thousands of workers in Sub-Saharan Africa with a real economic opportunity. We believe the future is bright for even stronger business partnerships and look forward to being a part of that future.
However, she points out that for her member companies to continue with the partnerships they have already established and to create new ones, they need a “prompt and long-term renewal of AGOA’s third-country fabric provisions”.