The House and Senate approved legislation (H.R. 5986, S. 3326) extending the third-country fabric provisions of the Africa Growth and Opportunity Act (AGOA) and sanctions on Burma. The legislation also includes technical modifications to the US-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR).
The bill will extend the third-country fabric provision in AGOA through September 2015. It also adds the “Republic of South Sudan (South Sudan)” to the list of AGOA-eligible beneficiary countries.
AGOA establishes trade and investment preferences for sub-Saharan African countries and has been amended several times. In 2006, the provisions concerning textile and apparel imports were extended to 2012. One of the provisions allows preferential access to the United States for apparel assembled in 27 eligible sub-Saharan African countries using yarns and fabrics sourced from countries other than sub Saharan Africa or the United States (the yarns and fabrics may come from any country), subject to a limit. That provision would have expired on Sept. 30, 2012.
Sen. Isakson (R-Ga.) stressed the “critical” importance of adding the new country of South Sudan to the list of AGOA-eligible countries.
Senate Finance Committee Chairman Baucus (D-Mont.) and ranking member Orrin Hatch (R-Utah) noted in a statement after the vote that because almost 95 percent of apparel imported from AGOA nations is made with third-country fabric, allowing the provision to expire would have seriously undermined AGOA's development goals.
The bill also makes technical corrections and modifications to the rules of origin for certain textile and apparel products under CAFTA-DR that were agreed to by trade ministers in Feb. 2011.
The Senate Finance Committee leaders said that the legislation improves the agreement's textile rules of origin, and these changes encourage greater use of U.S. inputs in the CAFTA-DR countries.
Acting U.S. Commerce Secretary Rebecca Blank said the technical changes to the textile and apparel provisions of CAFTA-DR will support the U.S. textile industry in North Carolina and South Carolina, and is expected to save 2,000 U.S. jobs.