African Growth and Opportunity Act (AGOA)

In both Africa and the United States, there is growing consensus that open trade and increased international investment are critical to spurring economic development and reducing poverty in Africa.

The African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000 as Title 1 of The Trade and Development Act of 2000. The Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.  It significantly enhances market access to the US for qualifying Sub-Saharan African (SSA) countries. Qualification for AGOA preferences is based on a set of conditions contained in the AGOA legislation. In order to qualify and remain eligible for AGOA, each country must be working to improve its rule of law, human rights, and respect for core labor standards.

President Obama, before his recent visit to Kenya and Ethiopia, said, "AGOA will be central to our efforts to boost the trade and investment that supports hundreds of thousands of jobs both in Africa and the United States, creating opportunities for all of us."

Apparel Eligibility

Country Eligibility

Product Eligibility

Office of the United States Trade Representative

https://agoa.info/about-agoa/country-eligibility.html

The International Trade Administration (ITA) strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the rigorous enforcement of our trade laws and agreements.  ITA works to improve the global business environment and helps U.S. organizations compete at home and abroad.  ITA supports President Obama's recovery agenda and the National Export Initiative to sustain economic growth and support American jobs.

Learn more about AGOA at the government website.

You may also find interest in visiting the Office of African Affairs website.

The following information was on the AGOA website as of August 31, 2015.  Please visit the official government website for the most recent information.  Below is for historical reference regarding how AGOA pertains to the apparel industry.

Qualifying Textile and Apparel Articles

The Africa Investment Incentive Act of 2006 (signed by President Bush on December 20, 2006) amends the textile and apparel portions of the African Growth and Opportunity Act (AGOA) and is referred to as "AGOA IV".

AGOA IV provides duty-free and quota-free treatment for eligible apparel articles made in qualifying sub-Saharan African countries through 2015. Qualifying articles include:

·  Apparel made of U.S. yarns and fabrics;

·  Apparel made of sub-Saharan African (regional) yarns and fabrics, subject to a cap until 2015;

·  Apparel made in a designated lesser developed country of third-country yarns and fabrics, subject to a cap until 2012;

Apparel made of yarns and fabrics not produced in commercial quantities in the United States;

Certain cashmere and merino wool sweaters;

Eligible handloomed, handmade, or folklore articles and ethnic printed fabrics; and

extiles and textile articles produced entirely in a lesser-developed beneficiary country.

Special Rule for Apparel Applying to Lesser Developed AGOA Countries

Until September 30, 2012, lesser-developed beneficiary sub-Saharan African countries may use non-U.S. fabric and yarn in apparel wholly assembled in their countries and still qualify for duty- and quota-free treatment. Exports under the Special Rule are subject to a cap (see below for details on the cap). Lesser-developed countries are those with a per capita gross national product of less than $1500 a year in 1998 as measured by the World Bank. AGOA IV continues to grant lesser-developed beneficiary country status to Botswana and Namibia, qualifying both countries for the Special Rule.

Other Textile and Apparel Provisions

The Committee for the Implementation of Textile Agreements (CITA), an interagency group chaired by the Commerce Department's Deputy Assistant Secretary for Textiles and Apparel, has the authority to implement certain provisions of AGOA's textile and apparel benefits. These provisions include:

·  Determination of the annual cap on imports of apparel that is assembled in beneficiary countries from fabric formed in beneficiary countries from yarn originating either in the United States or in beneficiary countries. Through September 30, 2012, the statute permits lesser-developed beneficiary countries to obtain preferential treatment for apparel assembled in beneficiary countries regardless of the origin of the fabric;

·   Determination that yarn or fabric cannot be supplied by the U.S. industry in commercial quantities in a timely manner, and to extend preferential treatment to eligible apparel from such yarn or fabric (commercial availability);

Determination of eligible handloomed, handmade, or folklore articles and ethnic printed fabrics;

A "tariff snapback" in the event that a surge in imports of eligible articles causes serious damage or threat thereof to domestic industry;

Determination of whether U.S. manufacturers produce interlinings in the United States in commercial quantities, thereby rendering articles containing foreign interlinings ineligible for benefits under AGOA; and

Determination of whether exporters have engaged in illegal transshipment and denial of benefits to such exporters for a period of five years.

Regional Cap

AGOA limits imports of apparel made with regional or third country fabric to a fixed percentage of the aggregate square meter equivalents (SME) of all apparel articles imported into the United States. For the year beginning October 1, 2006, the aggregate quantity of imports eligible for preferential treatment under these provisions is an amount not to exceed 6.43675 percent of all apparel articles imported into the United States. Of this overall amount, apparel imported under the Special Rule for lesser-developed countries is limited to an amount not to exceed 3.5 percent of apparel imported into the United States in the preceding 12-month period. Apparel articles entered in excess of these quantities will be subject to otherwise applicable tariffs. The duty- free cap is not allocated among countries. It is filled on a "first-come, first-served" basis.

For the most current data on aggregate imports under the cap, please visit http://otexa.ita.doc.gov and click on "AGOA".

Abundant Supply

AGOA IV provides for special rules for fabrics or yarns produced in commercial quantities (or "abundant supply") in any designated sub-Saharan African country for use in qualifying apparel articles. Upon receiving a petition from any interested party, the International Trade Commission will determine the quantity of such fabrics or yarns that must be sourced from the region before applying the third country fabric provision. It also provides for 30 million square meter equivalents (SMEs) of denim to be determined to be in abundant supply beginning October 1, 2006. The U.S. International Trade Commission will provide further guidance on how it will implement this provision.

Commercial Availability

Under AGOA, the President is authorized to proclaim duty-free and quota-free benefits for apparel that is both cut (or knit-to-shape) and sewn or otherwise assembled in beneficiary countries from fabric or yarns not formed in the United States or a beneficiary country, if the President has determined that such yarns or fabrics cannot be supplied by the domestic industry in commercial quantities in a timely manner. In Executive Order 13191, the President delegated to the Committee for the Implementation of Textile Agreements (CITA) authority to determine whether yarn or fabric cannot be supplied by the domestic industry in commercial quantities in a timely manner and to extend preferential treatment to apparel articles from such yarn or fabric.

For details on products that receive duty- free treatment under the AGOA, please visit http://otexa.ita.doc.gov and click on "Commercial Availability".

AGOA IV provides for a process to remove designated fabrics or yarns that were determined not to be available in commercial quantities in the United States on the basis of fraud.

Handloomed/handmade/folklore Articles/ethnic Printed fabrics

AGOA provides duty- and quota-free benefits for handloomed, handmade, folklore articles, or ethnic printed fabrics, made in beneficiary sub-Saharan African countries. This provision is known as "Category 9". In Executive Order 13191, the President authorized CITA, after consultation with the Commissioner of Customs and Border Protection, to consult with beneficiary sub-Saharan African countries and to determine which, if any, particular textile and apparel goods shall be treated as being handloomed, handmade, folklore articles or ethnic printed fabrics.

As of August 2009, Botswana, Burkina Faso, Ethiopia, Ghana, Kenya, Lesotho, Madagascar, Malawi, Mali, Mozambique, Namibia, Niger, Nigeria, Senegal, Sierra Leone, South Africa, Swaziland, Tanzania and Zambia have been approved under the hand-loomed and the handmade provisions of Category 9.

Instructions for Beneficiary Country Governments to Apply for Approval of Handloomed/handmade/folklore Articles Under Category 9

Findings and Trimmings

An apparel article is eligible for benefits even if the article contains findings or trimmings of foreign origin, if the value of such findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article. Examples of findings and trimmings include sewing thread, hooks and eyes, snaps, buttons, "bow buds," decorative lace trim, elastic strips, and zippers. Elastic strips are considered findings or trimmings only if they are each less than 1 inch in width and used in the production of brassieres.

Certain Interlinings

Articles containing certain interlinings of foreign origin are eligible for benefits if the value of the interlinings (and any findings and trimmings) does not exceed 25 percent of the cost of the components of the assempled article. The interlinings permitted include only a chest type plate, a "hymo" piece, or "sleeve header," made of woven or weft-inserted warp knit construction and of coarse animal hair or man-made filaments. This benefit will terminate if the President determines such interlinings are made in the United States in commercial quantities.

Certain Components

AGOA III expanded product eligibility to allow non-AGOA produced collars, cuffs, drawstrings, padding/shoulder pads, waistbands, belts attached to garments, straps with elastic, and elbow patches for all import categories to be eligible. This treatment continues under AGOA IV.

De Minimis Rule

Apparel products assembled in sub-Saharan Africa which would otherwise be considered eligible for AGOA benefits but for the presence of some fibers or yarns not wholly formed in the United States or the beneficiary sub-Saharan African country will still be eligible for benefits as long as the total weight of all such fibers and yarns is not more than 10 percent of the total weight of the article. AGOA III increased this percentage from seven percent.

Below is link to the U.S. International Trade Commission's (USITC) U.S. Tariff and Import Database for tariff and import data. The ITC has the most current tariff information for specific products. By following the steps below, you will be able to determine the import duty for your product and whether it qualifies for AGOA or other preferential treatment. Please note that for guidelines on apparel product eligibility go to the Apparel Eligibility page.

1. Type the Harmonized Tariff Schedule (HTS) number in the SEARCH box on the USITC page linked below. The Harmonized System Classification is a standardized numerical method of classifying traded products. This identifying number is assigned to each product and used by customs officials around the world to determine the duties, taxes and regulations that apply to the product.

Note you do NOT need to know the precise HTS category number. Enter either the first part of an HTS category number up to 8 digits--e.g., "8501" or "850110"--, or any part of a product description--e.g., "bovine", or "articho"--(without the "quotes"!) The search is not case-sensitive, so the results for "Bovine" will be the same as for "BoVinE"    

2. Once you enter this information, the results will likely provide several product options. Select the specific product and click the "Detail" button.
3. View the U.S. ITC Tariff and most recent U.S. import information.
4. Click on "imports by source country" to view competitor countries exporting the product to the United States.
5. Scroll down to "preferential" (duty-free or reduced rate) tariff program applicability to this HTS item, which describes tariff preferences for the product.
6. Scroll down to the bottom of the page and click the "begin" button to start a new search.

The following codes displayed on the ITC Tariff and Import Database are relevant for AGOA-eligible products. Each code indicates the product may enter the United States duty-free. If a product is eligible under the Generalized System of Preferences (GSP) or Normal Trade Relations (NTR), known formerly as Most Favored Nations (MFN), it can enter the United States duty-free. See below for a description of relevant codes for products:

·         Code A, indicating GSP preference

·         Code A+, indicating Lesser Developed Beneficiary Country (LBDC) GSP preference

·         Code D, indicating AGOA GSP eligibility

Note that many items that are indicated as "not eligible" for AGOA are still exempt from import duty if they are indicated as "eligible" under GSP, or their statutory import duty is zero.

Further inquiries about the AGOA eligibility of a specific product can be directed to your nearest U.S. Customs Representative. U.S. Customs determines AGOA-eligibility and provides importer requirements for products imported into the United States.

Instructions as to how AGOA countries may file for AGOA tariff preferences on the Harmonized Tariff Schedule of the United States.

GSP Product Eligibility

AGOA authorizes the President to provide duty-free treatment under GSP for any article, after the U.S. Trade Representative (USTR) and the U.S. International Trade Commission (USITC) have determined that the article is not import sensitive when imported from African countries. On December 21, 2000, the President extended dutyfree treatment under GSP to AGOA eligible countries for more than 1,800 tariff line items in addition to the standard GSP list of approximately 4,600 items available to non-AGOA GSP beneficiary countries. The additional GSP line items which include such previously excluded items as footwear, luggage, handbags, watches, and flatware were implemented after an extensive process of public comment and review.

AGOA extends GSP for eligible Sub-Saharan African beneficiaries until September 30, 2015. Sub-Saharan African beneficiary countries are also exempted from competitive need limitations which cap the GSP benefits available to beneficiaries in other regions.

Learn more about apparel industry customs issues.