Nathan-MSI Group - Foodnet

There are several requirements which African countries must meet in order to qualify for AGOA.
Countries with economic and political policies in place that promote open markets and political
systems, implement policies to reduce poverty, make efforts to fight corruption, protect human
rights and the rights of workers, and eliminate child labor practices are eligible for AGOA
benefits. Uganda has already qualified for such eligibility, given its strong reform record. The
second requirement is implementation of a certificate of origin customs visa subject to approval
by the U.S. Government, necessary to prevent illegal transshipment from non-AGOA sources. 2
Finally, countries must agree to make their industries open and available to U.S. Customs
Service inspection teams, while individual firms must maintain records of raw materials,
employment, production equipment, and sales for five years after export for review by the U.S.
Customs officials.
Once a country meets these conditions, AGOA offers duty-free access to the U.S. market for
African apparel items made of fabric and yarns originating either in the U.S. or in eligible sub-
Saharan African countries. In addition, for the continent’s poorest members, including Uganda,
third-country raw material sources are allowable until September 30, 2004. This latter provision
is important, for it allows Uganda to “jump-start” its garment make-up sector into exports, using
fabric which can be imported from leading suppliers around the world. At the same time, it sets a
deadline by which time African fiber, yarn, and fabric (or U.S.-sourced raw materials) must be
used in the garment industries in order to continue to benefit through the life of the treaty, which
expires on September 30, 2008.
AGOA does not offer duty-free access for non-apparel textile products. Non-clothing textile
products presently produced in Uganda, such as blankets, bed linens, handbags and carrying
cases, cloth art, and religious accessories, would be taxed upon importation into the U.S.
according to the rates specified in the U.S. Harmonized Tariff System (HTS). Current rates and
rates expected in 2004 at the expiry of the Agreement on Textiles and Clothing for some of these
products are presented in Table 1.
Some early experiences with AGOA have been frustrating. In a potential upset to Mauritian
exports to the U.S. and to South African suppliers of yarns into Mauritius, a sample order of
lamb’s wool sweaters were subject in February 2001 to duty by the Customs Service upon arrival
in the U.S. The Customs Service argued that the knit-to-shape panels from which the sweaters
were assembled are not “fabric,” and thus not eligible for duty-free consideration into the U.S.
market. The interpretation was sharply rebuked by the originators of the Act in the U.S. House of
Representatives Ways and Means Committee and by the National Retail Federation in the U.S. 3
2 Uganda is still in the process of revising its proposed visa form in conjunction with feedback received on an earlier
draft from the Office of the U.S. Trade Representative. Approval is likely still a month or two away.
3 “African clothes not duty-free in U.S.,” Business Day. Also, House Committee On Ways And Means press release,
March 6, 2001, http://waysandmeans.house.gov/press/press3-6-01.htm.
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