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Cape Town - For the first time all stakeholders in Africa's apparel value chain agree that a level playing field is needed in respect of duty free market access to the US under its African Growth and Opportunity Act (Agoa).
"The current dispensation, whereby South African clothing manufacturers are required to use domestic textile fabrics, has effectively served to chain our members to the starting blocks of the export race," Johann Baard, executive director of the Apparel Manufacturers of South Africa (Amsa) told Fin24 on Monday.
"This is simply due to the reality that US customers require fabrics for their garment ranges, which are not domestically available in South Africa.”
He said for SA the provision of access to third country fabric is absolutely essential.
"Failing this access to third country fabric the market access is virtually non-existent, unless our domestic textile producers provide fabrics of interest to the American consumers," said Baard.
"The prospect of job creation in SA is significant if we are able to use third country fabric."
He said this is due to the added value proposition of the fair labour practice regime in SA to many retailers in the US.
"There is a growing awareness among consumers about the social and moral considerations, which recent events in Bangladesh, where hundreds of clothing workers burnt to death in a factory, highlighted," said Baard.
"Social awareness is definitely gaining ground among consumers in developed first world markets."
He does not foresee SA being excluded from any future extension of Agoa and is not aware of any lobby to that effect.
Need to extend Agoa soon
The more than 300 000 direct jobs created in Africa because of Agoa will be threatened if it is not soon extended beyond September 2015.
This was urged in a joint statement by a number of organisations representing the apparel manufacturing, brand and retail industries in Africa and the United States on Monday.
“The joint statement is significant in that it is the first time that all apparel value chain stakeholders across national boundaries have reached consensus on the need for all qualifying countries to enjoy a level playing field in respect of duty free market access to the US under the Agoa," said Baard.
According to the joing statement Agoa plays a vital role in the development and support of a competitive US-African textile and apparel trade partnership, a critical step to developing a broader reciprocal commercial relationship with Agoa countries.
"Agoa has created more than 300 000 direct jobs in Africa and Agoa imports are important for the millions of American workers in apparel retailing, manufacturing and importing companies," according to the joint statement.
Originally enacted in 2000, Agoa has enjoyed widespread bipartisan support and has been modified and extended several times. It is currently authorised through September 2015.
The organisations which issued the joint statement are the African Cotton and Textile Industries Federation (Actif), the American Apparel & Footwear Association (Aafa), the National Retail Federation (NRF), the Outdoor Industry Association (OIA), the The Retail Industry Leaders Association (Rila) and The United States Association of Importers of Textiles and Apparel (USA-ITA).
Timeline
In the statement they urge that Agoa must be renewed as soon as possible, ideally during 2013, but in no event later than 2014.
"Because sourcing decisions are made many months in advance, renewal needs to occur soon for it to be truly seamless," said the statement.
"Any delay into 2015, especially in the light of last year's last-minute renewal of the third country fabric provision, will discourage continued sourcing and new investment, resulting in the loss of trade and jobs in both Africa and the US."
The organisations are urging that Agoa should be renewed for a long enough period - at least 15 years - to ensure the predictability necessary to support trade and investment decisions.
"Shorter term renewals will not provide enough certainty to enable the industry to make capital intensive investment decisions necessary to attract textile investments or affect long term sourcing partnership decisions."
The organisations are also asking that the third country fabric provision should be renewed for the full duration of the Agoa renewal.
"This provision has become central to Agoa. Renewing it for a shorter duration than the full program would be tantamount to renewing the entire program for that shorter duration," said the statement.
"Moreover, further vertical integration into upstream textile production requires maintenance of a healthy downstream apparel sector, which in turn is dependent upon the third country fabric provision."
All Agoa beneficiary countries should be able to use third country fabric provisions, the organisations demand.
"Unequal application of this provision lessens the positive impact of Agoa and retards regional integration efforts," said the statement.
- Fin24
"The current dispensation, whereby South African clothing manufacturers are required to use domestic textile fabrics, has effectively served to chain our members to the starting blocks of the export race," Johann Baard, executive director of the Apparel Manufacturers of South Africa (Amsa) told Fin24 on Monday.
"This is simply due to the reality that US customers require fabrics for their garment ranges, which are not domestically available in South Africa.”
He said for SA the provision of access to third country fabric is absolutely essential.
"Failing this access to third country fabric the market access is virtually non-existent, unless our domestic textile producers provide fabrics of interest to the American consumers," said Baard.
"The prospect of job creation in SA is significant if we are able to use third country fabric."
He said this is due to the added value proposition of the fair labour practice regime in SA to many retailers in the US.
"There is a growing awareness among consumers about the social and moral considerations, which recent events in Bangladesh, where hundreds of clothing workers burnt to death in a factory, highlighted," said Baard.
"Social awareness is definitely gaining ground among consumers in developed first world markets."
He does not foresee SA being excluded from any future extension of Agoa and is not aware of any lobby to that effect.
Need to extend Agoa soon
The more than 300 000 direct jobs created in Africa because of Agoa will be threatened if it is not soon extended beyond September 2015.
This was urged in a joint statement by a number of organisations representing the apparel manufacturing, brand and retail industries in Africa and the United States on Monday.
“The joint statement is significant in that it is the first time that all apparel value chain stakeholders across national boundaries have reached consensus on the need for all qualifying countries to enjoy a level playing field in respect of duty free market access to the US under the Agoa," said Baard.
According to the joing statement Agoa plays a vital role in the development and support of a competitive US-African textile and apparel trade partnership, a critical step to developing a broader reciprocal commercial relationship with Agoa countries.
"Agoa has created more than 300 000 direct jobs in Africa and Agoa imports are important for the millions of American workers in apparel retailing, manufacturing and importing companies," according to the joint statement.
Originally enacted in 2000, Agoa has enjoyed widespread bipartisan support and has been modified and extended several times. It is currently authorised through September 2015.
The organisations which issued the joint statement are the African Cotton and Textile Industries Federation (Actif), the American Apparel & Footwear Association (Aafa), the National Retail Federation (NRF), the Outdoor Industry Association (OIA), the The Retail Industry Leaders Association (Rila) and The United States Association of Importers of Textiles and Apparel (USA-ITA).
Timeline
In the statement they urge that Agoa must be renewed as soon as possible, ideally during 2013, but in no event later than 2014.
"Because sourcing decisions are made many months in advance, renewal needs to occur soon for it to be truly seamless," said the statement.
"Any delay into 2015, especially in the light of last year's last-minute renewal of the third country fabric provision, will discourage continued sourcing and new investment, resulting in the loss of trade and jobs in both Africa and the US."
The organisations are urging that Agoa should be renewed for a long enough period - at least 15 years - to ensure the predictability necessary to support trade and investment decisions.
"Shorter term renewals will not provide enough certainty to enable the industry to make capital intensive investment decisions necessary to attract textile investments or affect long term sourcing partnership decisions."
The organisations are also asking that the third country fabric provision should be renewed for the full duration of the Agoa renewal.
"This provision has become central to Agoa. Renewing it for a shorter duration than the full program would be tantamount to renewing the entire program for that shorter duration," said the statement.
"Moreover, further vertical integration into upstream textile production requires maintenance of a healthy downstream apparel sector, which in turn is dependent upon the third country fabric provision."
All Agoa beneficiary countries should be able to use third country fabric provisions, the organisations demand.
"Unequal application of this provision lessens the positive impact of Agoa and retards regional integration efforts," said the statement.
- Fin24
