Congress advances AGOA, CAFTA-DR changes
The U.S. Congress on Thursday agreed to advance legislation making updates and improvements to the African Growth and Opportunity Act (AGOA), America’s trade preference program for sub-Saharan Africa, and a U.S. free trade agreement with a handful of Central America countries and the Dominican Republic (CAFTA-DR).
“If our trade partnerships with Africa and Central America are going to provide the economic boost they’re meant to provide to these developing regions, and benefit American businesses and consumers as well, these critical fixes to AGOA and CAFTA-DR need to pass,” said U.S. Trade Representative Ron Kirk, in a statement.
“We look forward to working with Congress in any way we can to ensure the renewal of AGOA’s third-country fabric provision and the implementation of technical changes to CAFTA-DR’s textiles and apparel provisions as soon as possible,” he said.
The extension of AGOA’s third-country fabric provision was a critical issue raised by trade ministers during the recent AGOA Forum in Washington. U.S. orders for shipment of African exports after the slated expiration date of September 2012 are down 35 percent; African textile exports have already dropped by 27 percent in the last year, the Office of the U.S. Trade Representative said.
USTR said AGOA’s third-country fabric (TCF) provision is “crucial to the continued survival of Africa’s textile and apparel industry – it has generated hundreds of thousands of jobs in sub-Saharan Africa, especially in least developed countries, and has helped American retailers reduce their costs, diversify their supply chains, and provide greater low-cost apparel options for U.S. consumers.” Congress has extended the TCF provision twice with bipartisan support.
Legislation is also needed to implement technical corrections and modifications to the product-specific rules of origin for textile products covered under the CAFTA-DR. The countries included in the FTA are Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
The CAFTA-DR modifications that, among other things, provide certainty of duty-free treatment for women’s and girls’ woven pajama bottoms and clarity as to how certain items will be treated on the textiles “short supply” list of the FTA, which will promote use of the free trade agreement.
“The CAFTA-DR provisions will promote U.S. exports to the region and help support jobs and production in America. The correction on sewing thread alone will help support an estimated 1,000 jobs in the United States, Central America, and the Dominican Republic, with U.S. production located in North Carolina, Florida, South Carolina, and Alabama,” USTR said. “These changes to CAFTA-DR FTA have the strong support of the domestic textile industry as well as U.S. importers and retailers who source from the region.”
U.S. exports of textiles and apparel to the CAFTA-DR region were $3.8 billion in the 12-month period ending February 2012, and increased 15 percent over the prior 12-month period. U.S. imports of textiles and apparel from the CAFTA-DR region were $8 billion in March 2011 through February 2012, 10 percent higher than the previous 12-month period. About 73 percent of those imports were made from either U.S. or regional yarns and fabrics.
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