US gives last-minute extension to African textiles

The US Congress on Thursday renewed duty-free access for textiles made in sub-Saharan Africa, giving a last-minute extension to rules estimated to have created hundreds of thousands of jobs.

The Senate and House of Representatives voted separately to maintain zero tariffs on African-made clothing even if the fabric comes from outside, as is the case for most name-brand apparel produced on the continent.

Congress extended the provision until 2015. It had been due to expire at the end of September, leading some African nations and Western manufacturers to fear that factories would be shuttered across the continent.

Lawmakers also voted to expand the benefits to South Sudan, Africa's newest nation which is sorely lacking in revenue. The duty-free access first took effect in 2000 under the African Growth and Opportunity Act, or AGOA.

"The African apparel industry, which has been hammered in the last few months with uncertainty about extension of the AGOA provisions, can breathe a sigh of relief," said Representative Charlie Rangel of New York, a senior lawmaker in President Barack Obama's Democratic Party.

The long-awaited votes in Congress came as Secretary of State Hillary Clinton pursues an 11-day tour of Africa that includes a stop in South Sudan. Her trip is aimed partly at spurring economic growth on the continent.

The market-based "trade-not-aid" approach to Africa enjoys wide support in Congress, but the extension was held up as a conservative Republican senator said that the legislation did not adequately account for spending.

Senator Tom Coburn of Oklahoma offered an amendment that would offset $192 million in costs by eliminating or consolidating other federal agencies related to trade.

Coburn's amendment failed but senators then went ahead and approved the overall legislation, which was part of a package that included an extension of economic sanctions on Myanmar.

Senator Chris Coons, a Democrat from Delaware who championed the renewal, said the legislation was "helping to build a strong middle class in Africa, lessening dependency on US foreign aid and opening important new markets to American companies."

Senator Johnny Isakson, a Republican from Georgia who worked with Coons on the bill, said that the duty-free access "reinforces our relationship with the people of Africa by strengthening the continent's democratic institutions and promoting economic freedom."

US Trade Representative Ron Kirk said Obama would sign the bill promptly. The Obama administration pressed for renewal, with Kirk recently touring a factory in Ghana where 500 women are employed making medical scrubs sold at US mega-retailer Walmart.

Exports by sub-Saharan nations to the United States under AGOA hit $70.6 billion last year, more than five times than in 2001 after the legislation took effect, according to the US Trade Representative's office.

A recent study by the Brookings Institution quoted Rosa Whitaker, a former US trade official, as estimating that the legislation has created 300,000 jobs.

The African Coalition on Trade, which advocates commercial relations between the continent and the United States, said that AGOA indirectly created as many as 1.3 million jobs.

The Brookings Institution study urged Congress to extend duty-free access for a longer period, such as 10 years, to provide greater certainty to businesses.

It also called for the United States to encourage investment by ending taxes on repatriated earnings by US companies in AGOA nations.

Lawmakers in both houses have proposed a separate bill that would work to step up US investment in Africa, which has lagged behind trade in the other direction.

AGOA covers most of sub-Saharan Africa but the United States excludes several countries such as Sudan and Zimbabwe seen as not meeting criteria on allowing political pluralism and market economies.

Source: http://news.yahoo.com/us-gives-last-minute-extension-african-textiles-200009602.html

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