Agoa votes to double SA's duty free apparel quota

Alan Peat
A HOUSE of Representatives vote is set to double the quota of duty-free imports of apparel allowed into the US under the African Growth & Opportunities Act (AGOA), provided the senate votes the proposed amendment into law.
Not that the previous quota cap - to 1.5% of the total apparel imports to the US - was a restriction for SA clothing exporters, according to Jack Kipling, chairman of the Export Council for the Clothing Industry.
"The qualified member states in the entire sub-Saharan region ended up using only 17% of the cap available in the first year of AGOA exports," he told FTW, "so it's no restricting influence."
The overwhelming majority vote in favour of AGOA 2 - as the amended act is named - is also not unexpected, Kipling added.
"The US authorities have always said that the cap was not there to restrict trade. They added that they would increase the caps when they felt the time was right."
And that time seems to have come, as AGOA went through its first annual review. Kipling expects the revised AGOA 2 to become applicable in the early part of next year.
The show of hands in the house was a vote of confidence in the success of the new act, he said. "It was a statement that they were happy with how AGOA was working."
The act has also extended the number of countries in sub-Saharan Africa which are now qualified for duty-free exports to the US. While SA, Kenya and Mauritius were the first three off-their-marks, 10 states are now on the approved list.
And, from SA's point-of-view, AGOA has been a useful booster for clothing exports to the US.
According to figures released to FTW by the Export Council, SA exports in total were up 35% in the past year. "But exports to the US went up by 63%, and that country now takes 65% of SA's total exports of clothing.
"Historically, this figure has always been about 40%."