Senate panel okays renewal of Africa clothing trade benefit

Reuters News
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Posted: Jul 18, 2012 12:03 PM
Senate panel okays renewal of Africa clothing trade benefit

WASHINGTON (Reuters) - The Senate Finance Committee voted on Wednesday to renew an expiring trade benefit that has helped create hundreds of thousands of jobs in the African clothing industry over the past decade.

"A timely extension of this provision will help stem the tide of job losses in Africa and it will ensure that U.S. retailers will have the certainty they need to help their businesses succeed and grow," Committee Chairman Max Baucus, a Montana Democrat, said.

The African Growth and Opportunity Act (AGOA), first passed by Congress in 2000, allows eligible countries in sub-Saharan Africa to ship thousands of goods to the United States without paying import duties.

A provision that expires September 30 waives duties on clothing from most AGOA countries, even if the yarn or fabric is made in a "third country" such as China, South Korea or Vietnam.

"It is critical for workers and businesses in the U.S. and Africa that we extend this key provision before it is due to expire in September," U.S. Trade Representative Ron Kirk said in a statement after the vote.

"Just last week, I visited a textile factory in Ghana that will likely have to close its doors and lay off nearly 500 employees if Third-Country Fabric expires - and that is just one example," Kirk said.

President Barack Obama's administration had hoped to win renewal of the provision ahead of an annual forum with AGOA beneficiary countries in June.

The bill, which is coupled with legislation to extend sanctions on Myanmar for three years, has broad bipartisan support and is expected to pass easily if it gets to the floor in the Senate and the House of Representatives for votes.

(Reporting By Doug Palmer; Editing by Paul Simao and Vicki Allen)