First quarter apparel imports from Sub-Saharan Africa to the United States has fallen over 20 per cent in volume. Much of the loss came in larger categories where China is now restricted by quotas despite AGOA-member countries being granted preferential treatment on the US market. Washington says it will now act to give AGOA an improved chance of success.
US imports from Sub-Sahara Africa have again decreased in the first quarter of 2006 after volumes had fallen in 2005.
Cotton apparel imports from the countries forming the African Growth and Opportunity Act (AGOA) which gets duty-free treatment in the US, fell 22 per cent in volume terms.
Man-made fibre (MMF) categories have also fallen 24 per cent in the first quarter compared with the same period one year ago.
Not taking advantage of China quotas
In volume terms, most of the bulk of exports to the US were concentrated in those sensitive categories where China has since been limited by quotas.
These consist of: 338/9 (cotton knit shirts), 347/8 (cotton trousers), 638/9 (MMF knit shirts) and 647/8 (MMF trousers).
But even in these categories, producers in the AGOA countries have not been able to benefit from the quotas as volumes have decreased.
For example, category 338 was 27.5 per cent lower compared with one year ago while category 647 was 28.7 per cent down.
Kenya, Madagascar and Lesotho main exporters
Most of the production in AGOA is concentrated in just a few countries including Kenya, Mauritius, Madagascar, Swaziland and Lesotho.
All five of these countries have imported less into the US during the first quarter although Kenya, Madagascar and Lesotho are putting up a fight.
The value of imports from Lesotho came to US$81.7 million compared with $99.8 million in the first quarter of 2005 while Kenya's apparel was worth $65.5 million compared to US$78.1 million.
Madagascar was only slightly lower at $52.6 million from $59.3 million last year and has succeeded in attracting apparel producers towards its Export Processing Zones (EPZs) although many, mainly Chinese producers, have since left.
Third-country fabric provision
US imports from Mauritius fell at the same time. Mauritius from 30 September 2005 is no longer entitled to benefit from AGOA's third-country fabric provision which is in place for lesser-developed countries.
This provision allows AGOA countries to use inputs from outside of the region until 30 September 2007 but critics of the deal say that this has led local industries tro become too reliant on, mainly Asian, foreign fabrics.
Duty-Free imports under AGOA are limited to a fixed 5.8 per cent of the amount of square metre equivalents (SMEs) of all apparel that is imported into the US.
The total preference level for the year October 2005 - September 2006, is set at just over 1.3 billion SMEs of which just 13.55 per cent has been filled by AGOA exporters.
The limit for lesser-developed countries using third-country fabric, is set at a lower 670.65 million SMEs with a fill rate of just 25 per cent.
US 'worried' over AGOA decline
Clearly, the limits will not be used up before the end of September at the current low levels of importation.
This weakness has fuelled speculation that the US is to tackle the matter and consider changes to policy in order to give Sub-Saharan countries a more competitive edge.
According to the US Trade Representative (USTR), the US is seeking to address "inefficient and costly transport and other supply-side constraints affecting trade competitiveness".
The US Agency for International Development (USAID) is reportedly planning to spend $200 million over the next five years to increase Africa's trade competitiveness.
