Alan Peat
NOW THAT the African Growth & Opportunity Act (AGOA) has joined the 17-year-old Generalised System of Preferences (GSP) trade agreement, SA can export 6 487 products to the US duty-free - 4 650 under GSP and an additional 1 837 under AGOA.
This, according to Riaan de Lange of Deloitte & Touche international trade solutions, covers virtually everything on the SA potential export list.
The additional products, he said, were previously excluded under GSP because they are the most import sensitive - including electronic and steel products; glass products; footwear; leather goods; apparel; watches; and electronic goods.
But they're now there - and AGOA puts the GSP benefits in place until September, 2008.
Although AGOA dramatically expands duty-free access to the US for a wide range of goods, said De Lange, one of its key focuses is on apparel.
This because the industry is important as a driver of export growth and was excluded under the previous GSP programme.
Under AGOA, duty- and quota-free treatment is available for all apparel made in the 35 sub-Saharan countries eligible under the act - provided it complies with certain conditions.
It must be made from either:
l US fabric, yarn and thread;
l Fabric produced in an AGOA-eligible country - up to a cap based on a set percentage of overall imports to the US. (The cap starts at 1.5% of US apparel imports in the first year, De Lange told FTW, and rises to 3.5% at the end of the programme.);
l Fabric not produced in the US. (So-called short-supply fabrics - such as silk, said De Lange).
The least developed countries - with an annual per capita gross national product of US$1 500 or less in 1998 - may use fabrics from anywhere for the first four years of the act. This, De Lange added, also subject to the cap mentioned above.
For apparel shipments, there are very strict requirements intended to combat customs fraud and illegal transhipment. Exporters failing to comply with transhipment provisions, for example, said De Lange, could be denied further participation in the programme.
However, funding and technical assistance is available from US customs to assist eligible countries in their efforts to comply with the regulations.
Copyright Now Media (Pty) Ltd
No article may be reproduced without the written permission of the editor
To respond to this article send your email to joyo@nowmedia.co.za
