Obama signs off AGOA re­newal

Lesotho Times - - Business -

UNITED States Pres­i­dent Barack Obama ( pic­tured) on Mon­day signed into law the Trade Pref­er­ence Ex­ten­sion Act of 2015, to en­act a 10-year re­newal of the African Growth and Op­por­tu­nity Act (AGOA).

AGOA is a non­re­cip­ro­cal trade pref­er­ence pro­gramme that pro­vides duty-free treat­ment to United States im­ports of cer­tain prod­ucts from el­i­gi­ble sub-sa­ha­ran African coun­tries of which Le­sotho is a ma­jor ben­e­fi­ciary. The pro­gramme, which was set to ex­pire in Septem­ber this year.

AGOA has played a big role in sus­tain­ing Le­sotho’s textile in­dus­try, which is the sin­gle big­gest pri­vate sec­tor em­ployer.

United Na­tions fig­ures show that since AGOA’S in­tro­duc­tion, Le­sotho’s gar­ment in­dus­try has grown to con­trib­ute 20 per­cent of gross do­mes­tic prod­uct –– with 80 per­cent of the man­u­fac­tur­ing for US mega-brands like Gap, Levi’s, and Wal­mart.

Around 44 000 Ba­sotho earn their liv­ing as a re­sult of AGOA.

Le­sotho is among the 37 na­tions ben­e­fit­ting from AGOA through its textile prod­ucts and the un­cer­tainty sur­round­ing the US’S de­ci­sion on the leg­is­la­tion had cast a dark shadow over the in­dus­try.

Some lo­cal textile firms had started ra­tio­nal­is­ing oper­a­tions and re­trench­ing work­ers.

How­ever, the new ex­ten­sion gives the US the abil­ity to with­draw, sus­pend, or limit ben­e­fits if des­ig­nated AGOA coun­tries do not com­ply with its el­i­gi­bil­ity cri­te­ria.

It pro­vides greater flex­i­bil­ity to the White House to with­draw, sus­pend, or limit ben­e­fits un­der the scheme if it de­ter­mines that such ac­tion would be more ef­fec­tive than ter­mi­na­tion.

For ex­am­ple, the bill re­quires the pres­i­dent to no­tify and ex­plain to Congress his in­ten­tion to ter­mi­nate a coun­try’s des­ig­na­tion as a ben­e­fi­ciary at least 60 days be­fore the de­ci­sion takes ef­fect.

The bill pro­vides for a pe­ti­tion process al­low­ing in­ter­ested par­ties to file pe­ti­tions at any time with the Of­fice of the US Trade Rep­re­sen­ta­tive re­gard­ing com­pli­ance of a ben­e­fi­ciary coun­try. Re­gard­ing public hear­ings, the in­clu­sion of public com­ments will be re­quired dur­ing re­views of a coun­try’s AGOA el­i­gi­bil­ity.

The new AGOA will also al­low the US pres­i­dent to con­duct out-of-cy­cle re­views of any ben­e­fi­ciary coun­try to de­ter­mine whether it is mak­ing con­tin­ued progress to­wards meet­ing the scheme’s el­i­gi­bil­ity cri­te­ria.

Since AGOA was put in place, 13 coun­tries have lost their el­i­gi­bil­ity, although ough seven even­tu­ally had it re­stored.

Six coun­tries – Cen­tral Africann Re­pub­lic, Demo­cratic Re­pub­lic of Congo, Eritrea, The Gam­bia, South Su­dan, andd Swaziland – lost their el­i­gi­bil­ity pri­mar­il­yarily due to po­lit­i­cal rea­sons and have not re­gained it to date.

The gen­eral rule of ori­gin un­derer the new AGOA re­tains a value-added re­quire­ment of 35 per­cent. This pro­vi­sion­i­sion en­tails that prod­ucts may in­te­grat­er­ate ma­te­ri­als sourced from out­side cou­noun­tries – in other words, NON-AGOAGOAben­e­fi­cia­ries – pro­vided that the “di­rect costs of pro­cess­ing” un­der­tak­enken in one or more des­ig­nated AGOAAben­e­fi­ciary coun­tries equal at t least 35 per­cent of the prod­uct'ss ap­praised value.

Un­der the new text, ben­e­fi­ciary coun­tries will be ex­pected to de­velop bi­en­nial AGOA util­i­sa­tion strate­gies in or­der to “more ef­fec­tively and strate­gi­cally utilise ben­e­fits avail­able un­der AGOA,” the bill says, which ad­di­tion­ally cites the pos­si­bil­ity for Re­gional Eco­nomic Com­mu­ni­ties to be in­volved in this ex­er­cise. Such strate­gies would mainly re­view op­por­tu­ni­ties and chal­lenges around ex­ports un­der AGOA, ob­sta­cles to re­gional in­te­gra­tion, and es­tab­lish a plan to in­crease the util­i­sa­tion of ben­e­fits un­der the Act. –– Staff Writer

US Pres­i­dent Barack Obama

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