Ethiopia, AAFA, Children's Place Ask for Ethiopian Restoration to AGOA
Ethiopia was exporting more than $100 million annually of apparel and textiles to the U.S. before it was ousted from the African Growth and Opportunity Act program over civil strife, and a prominent apparel firm and apparel trade group are asking that it be restored.
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Beth Hughes, writing for the American Apparel and Footwear Association, said the 10-year period for AGOA (which ends in 2025) allowed apparel companies to rely on the benefit and expand in Africa.
"As more companies are beginning to utilize AGOA, and specifically the third country fabric provision, the quota fill rate will be significantly increasing in the coming years. Therefore, we also suggest raising the existing 3.5% limit to at least 4.5%, with a growth provision, so that it not be a constraint going forward," she wrote in comments responding to an annual eligibility review by the Office of the U.S. Trade Representative (see 2205100030). She called the rules of origin in AGOA "state-of-the-art."
"Companies are poised to diversify out of China, and Africa is a logical place for many of them. The on-again, off-again nature of the program before the ten-year renewal was extremely disruptive and meant the industry was not able to take full advantage of the first 15 years of the program," she wrote.
Hughes said she is hopeful that the Ethiopian government can meet the benchmarks USTR laid out to get restored to AGOA "as soon as possible." The comments were posted June 24 at Regulations.gov.
Squire Patton Boggs, on behalf of the Ethiopian government, argued that the amount of humanitarian aid reaching the Tigray region has improved significantly since the government announced a unilateral ceasefire, and that the government is working on getting electricity and other services restored there. The firm also said the government is cooperating with investigations into human rights violations during the conflict.
"Ethiopia’s textile and apparel industry became a dominating industry, accounting for over $100 million worth of AGOA imports in to the United States each year from 2018 to 2020," the firm wrote. It said that The Children's Place, one of the largest clothing manufacturers in the country, is paying $15 million a year more in tariffs since the loss of AGOA.
The Children's Place also wrote. "While The Children’s Place absolutely condemns the human rights abuses that have taken place in Northern Ethiopia, the Company is very concerned that the continued suspension of AGOA benefits is counterproductive and destructive to development and livelihoods in the region, disproportionately harming the most vulnerable segments of the Ethiopian population, including women and children," it said in comments.
The company said tens of thousands of garment workers are in Ethiopia, the vast majority of them women.
Ethiopia's developing textile sector "has also allowed The Children’s Place to progressively reduce sourcing from China from approximately 40% in 2011 down to approximately 9% in 2021. In fact, the Company’s source volume from Ethiopia is now almost two times greater than its source volume from China."