Thousands of people
interested in developing trade relationships between the United States and
the countries of Africa met for a four-day summit in Washington, D.C. last
week. The conference workshops focused on issues impacting the African economy
- - from AIDS to the African Growth and Opportunity Act (AGOA).
AGOA I and II provide duty and tariff-free access to the United States
for almost 6,000 products from 48 countries south of the Sahara Desert.
The trade agreement expires in 2008. Backers are already seeking its extension
while urging the U.S. Congress to pass AGOA III.
The trade agreement helps make the production costs of the 6,000 products
cheaper by erasing all U.S. duty or tariffs on the goods when manufactures
import them to the United States. With the products being cheaper, they can
better compete for the American consumers' dollar. In turn, this encourages
manufactures to invest in Africa.
With easing of trade restrictions, U.S. apparel imports
from Africa have risen by more than 47% since 2000. Total U.S. apparel
imports have decreased by .5 percent, .7 percent from Caribbean countries. However, Sub-Saharan African apparel imports still represent
less than 2% of all apparel imports.
The U.S. currently has heavy duty taxes on apparel items. "Five percent
of the U.S. imports by value are apparel items, but the industry pays 35%
of the duty tax the U.S. collects," says Steve Lamar, Senior Vice President
of the American Apparel and Footwear Association.
Augie Tantillo of SRG & Associates warned that upcoming
World Trade Organization (WTO) rules could wipe out Africa's temporary trade
advantage. The new rules will wipe out duty tax on all apparel items and
erase the quota on the amount of apparel that each country can export to
The U.S. continues to lose jobs in the apparel industry says Lloyd Wood
III of the American Manufacturing Trade Action Coalition. According to Wood,
since 1994, when Mexico, Canada, and the U.S. enacted NAFTA - - a trade agreement
among the three countries - - the U.S. lost about 50% of its apparel jobs.
However, Wilson Hunt, President of Champro Sports, explained that for
every 100,000 dozen of pants his company manufactures overseas, Americans
lose only 1 to 2 jobs while less developed countries gain 200 to 201 jobs.
The difference in job lose and gain is due to America's apparel industry
being technologically advanced and needing less labor.
A new problem hampering African-U.S. trade is the Container Security Initiative
commented Thomas G. Travis, an Attorney with Sandler, Travis, and Rosenberg.
The U.S designed the initiative to lessen the chance that terrorist will
ship dangerous materials to the U.S. along with other imports. However,
the U.S. is investing most of its resources in large export ports, which
do not include any African ports.
Sandler, Travis, and Rosenberg sponsored the forum on AGOA. The company
offers textile and apparel clients a range of services including advice on
U.S. Customs requirements.
During Tuesday's GALA dinner, the conference awarded Senegal President
Abdoulaye Wade for his leadership role in the New Economic Partnership for Africa's Development.
President Wade is a committed Pan-Africanist. U.S. President George Busch
spoke during the Thursday luncheon.