- The Washington Times - Sunday, May 16, 2004

Sunil Toilocu fears that his factory and others like it in Africa are running out of time.

The personnel manager for Grove Industries sees clothing manufacturers in the small island nation of Mauritius shutting down — and workers losing jobs — as exports to the United States start to dry up.

Grove has been exporting men’s pants and women’s skirts, sold to companies like the Gap, under the African Growth and Opportunity Act (AGOA). Congress passed the legislation in 2000 and two years later extended it through the end of 2008.

The measure has been a boon to African exporters and has supported as many as 150,000 jobs. But it is not clear when, or if, Congress will extend an expiring provision that allows the African nations to import inexpensive Asian-made fabric, sew it into clothes and export it to the United States.

Without the provision, clothes manufacturing will not be economically feasible. And the uncertainty is causing American importers to look elsewhere for shirts, pants and other apparel, and those jobs to disappear.

“In Mauritius, for the last few months, there are many factories which are closed down. Many people are jobless. It is not easy for us to survive,” Mr. Toilocu said from his company’s factory in southern Mauritius, where about 1,700 workers sew garments for export to America.

The portion of the act that allows the use of foreign-made fabric in exports to the United States is set to expire in September.

Normally, U.S. trade agreements require nations to use their own or American fabric to receive trade preferences. While the African nations are trying to build up domestic textile shops, they have not yet. Cost and long shipping times rule out the use of U.S. fabric, leaving Asia as the best source.

AGOA applies to 37 nations; 23 of the poorest, mostly in sub-Saharan Africa, qualify to use foreign fabric.

Petroleum products are the top import from Africa; clothing is No. 2.Sub-Saharan Africa exported more than $1.2 billion in apparel under AGOA in 2003, an almost 50 percent jump from 2002, but still less than 2 percent of U.S. imports.

Lesotho, a small, landlocked nation in southern Africa, sees the program as a symbol of U.S. commitment to the continent and as the most successful poverty alleviation in the nation’s history.

Exports, more than 90 percent of which are clothing, rose to nearly $400 million last year from $140 million in 2000, and apparel employment has risen to 50,000 jobs from 20,000, said Tumelo Raboletsi, the second-highest official at the Lesotho Embassy in Washington.

“Unless [Congress] act now, all that has been said about the U.S. helping the poorest nations will … be rolled back. The repercussions will be terrible,” Mr. Raboletsi said.

Already some $40 million in orders have been canceled or placed on hold in Lesotho because of uncertainty, he said.

U.S. companies are contemplating worst-case scenarios.

“If [AGOA] doesn’t move ahead … by the end of the summer, we’re going to be forced to pull out,” said Jeff Streader, vice president of global sourcing for VF Corp.

VF sells clothes under Nautica, the North Face, Wrangler and other brands. The company imports clothing worth about$50 million in retail sales under AGOA. That is less than 1 percent of VF’s imports, but helps support roughly 20 African factories, Mr. Streader said.

Those imports are not economically feasible without AGOA, and VF cannot effectively run worldwide sourcing operations simply hoping the legislation will pass, he said.

President Bush wants AGOA’s fabric provisions and the overall act extended so that businesses can make long-term commitments to the region.

The House Ways and Means Committee on May 5 passed a new AGOA bill by a voice vote with strong support from the panel’s chairman, Rep. Bill Thomas, California Republican, and the ranking Democrat, Rep. Charles B. Rangel of New York — politicians often onopposite sides of the same issue. The House measure would extend AGOA to 2015 and resolve fabric provisions that are threatening clothing exports.

“I expect to bring this bipartisan bill to the House floor quickly and expect it to become law without much opposition,” Mr. Thomas said then.

But the picture is different in the Senate, where AGOA is popular but attempts at economy-related legislation have turned into partisan fights on wider policy issues.

“I’m afraid that any attempt to move a broad AGOA bill … will also be bogged down with unrelated issues and objections,” said Sen. Charles E. Grassley, Iowa Republican and chairman of the Finance Committee, which has jurisdiction over trade.

Mr. Grassley last week said he strongly supports a new AGOA bill, but time may be too short. He would at least like to see Congress resolve the fabric provisions of the current program with a procedural move known as unanimous consent.

A single senator can block such a vote, making any outcome uncertain.

“It will be very difficult for the legislation to go through Congress this year, but we remain hopeful,” Mr. Raboletsi said.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide