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GAO
United States Government Accountability Office
Report to Congressional Committees
U.S.-AFRICA TRADEOptions forCongressionalConsideration toImprove Textile and Apparel SectorCompetitivenessunder the AfricanGrowth andOpportunity Act
 August 2009GAO-09-916
 
What GAO Found
United States Government Accountability Office
Why GAO Did This Study
H
ighlights
Accountability Integrity Reliability
Au
g
u
s
t 2009
 
U.S.-AFRICA TRADE
Option
s
for Con
g
re
ss
ional Con
s
ideration to ImproveTextile and Apparel
S
ector Competitivene
ss
underthe African Growth and Opportunity Act
Highlights ofGAO-09-916, a report tocongressional committees
 According to U.S. governmentofficials, sub-Saharan Africa’s(SSA) textile and apparel industryhas not achieved the growthanticipated under the AfricanGrowth and Opportunity Act(AGOA). Despite the tariff reductions under AGOA, after aninitial surge, U.S. imports of these products from beneficiarycountries have declined in recent years (see figure). In view of thisoutcome, the 2008 Andean TradePreference Extension legislationrequired GAO to prepare a reportidentifying changes to U.S. trade preference programs “to provideincentives to increase investmentand other measures necessary toimprove the competitiveness of [SSA] beneficiary countries in the production of yarns, fabric, andother textile and apparel inputs.”This report is intended to provideCongress a range of options putforward by experts for (1) possiblechanges to AGOA or other U.S.trade preference programs and (2)other measures the U.S.government could take to helpincrease investment in and improvecompetitiveness of SSA textile andapparel inputs production.To address these objectives, GAOconsidered the findings of a study prepared by the U.S. InternationalTrade Commission that identified products that could be producedcompetitively in AGOA beneficiarycountries. GAO also convened a panel of experts and keyinformants to discuss their viewsand prioritize the options that GAOidentified.
Many of the options discussed by the panel of experts GAO convened addressthe need to consider the trade-offs inherent in trade preference programs.Furthermore, experts emphasized that the link between trade policy andeconomic development complicates potential policy responses. While AGOAhas generous benefits for textile and apparel, many SSA countries faceinfrastructure and development challenges that must be addressed beforethey can fully take advantage of these benefits.Recognizing this interplay, GAO’s panel of experts and key informants gavegreatest priority to options they believed provide long-term investors with predictability of benefits and encourage regional commitments relative toother developing countries. Such options included:
•
 
Extending the duration of the third-country fabric provision for leastdeveloped AGOA countries beyond 2012, and
•
 
Extending the duration of overall AGOA benefits beyond 2015.The panel similarly gave greatest priority to the options for other developmentmeasures that focused on supporting investment through trade capacitybuilding. Many experts considered trade capacity building to be a keycomponent of improving the competitiveness of African textile and apparelinputs production, and in developing the physical and market infrastructureneeded for a vibrant export sector. Such options included:
•
 
Funding regional trade hubs and focusing on market promotion andbusiness linkages, and
•
 
 Aligning U.S. trade capacity building and development assistance with AGOA objectives.
U.
S
. Import
s
of Textile and Apparel from
SS
A, 1998 throu
g
h 2009
00.20.40.60.
8
1.01.21.41.61.
8
2.02009200
8
200720062005200420032002200120001999199
8
Dollars in billions
S
ource: GAO
a
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ly
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i
s
of offici
a
l U.
S
. tr
a
de
s
t
a
ti
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tic
s
.
Year
AGOAimplemented
View GAO-09-916 or key components. For more information, contact Loren Yager at(202) 512-4347 oryagerl@gao.gov.
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