Aug 31, 2006

US Bill Supporting African Growth Up for Renewal

by Laura Starita

The recent Commitment to Development Index (CDI), published by Foreign Policy magazine, gave the United States high marks for its open trade policies and low tariffs relative to other countries. Legislation such as the African Growth and Opportunity Act lends the U.S. its high trade score: Since 2000, the AGOA has allowed products from sub-Saharan Africa to be sold duty-free in the US market.

Now the portion of the AGOA dealing with textiles is up for renewal, and there is some question as to whether tax-free status will be retained for all African textile goods - including those that are only assembled in Africa. Congressman Charles Rangel is pushing for a provision that limits tax-free status to those goods for which the African value-add is 20 percent or higher, a limitation that could kill the sub-Saharan African assembly industry. If the provision goes through, sub-Saharan Africa could lose more than 100,000 jobs. This is a chance for the U.S. to renew the bill without provisions, and show the strength behind its commitment to development.

Wall Street Journal: Threading Africa’s Needle