Clinton eases Africa's trade terms
Regional, Economics, 10/3/2000

The US administration has eased its terms for granting duty-free US market access to African-assembled clothing under the African Growth and Opportunity Act, after complaints that it was trying to hold would-be beneficiaries to standards higher than the law provisions.

Panafrican news agency "PANA" reports that US embassies in the continent were instructed at the end of last week to present a revised customs agreement to governments, which must sign it to qualify for the act's textile and clothing benefits. Those benefits are only available to African countries declared by the president to have met the act's broader political and economic conditions.

Under the amended version, African governments must state that they are taking steps consistent with the World Trade Organization (WTO) agreement on clothing and textiles, to discourage the transhipment of nonbeneficiary goods through their territory by third-country exporters seeking fraudulently to claim duty-free treatment for their products.

Each benefit-claiming shipment of apparel from a qualifying African country must be accompanied by a government-issued visa essentially a rubber stamp on a commercial invoice attesting to its contents, quantity and provenance.

Governments must subsequently provide details of the exports they have certified so that US customs can match that data against visa-bearing goods that have actually been landed to check for counterfeit visas.

Those requirements, contained in the law and the first agreement version, remain essentially unchanged. Toned down and clarified is language that appeared to oblige countries to surrender sovereignty to US customs if it wished to investigate and punish possible fraud.

In particular, the original agreement demanded that governments deny visas to, and impose civil penalties on, any domestic producer of fabric or clothing who failed to provide "sufficient records" to satisfy US customs when it suspected visa fraud. Those records had to be kept for five years, rather than two stipulated in the act.

This language has been dropped, and the two-year record-keeping requirement restored, although, ultimately, companies will still have to keep five-year records, because that is the North American Free Trade Agreement standard for rule of origin compliance towards which would-be-beneficiaries have at least to be seen "making progress."

Governments are now being asked to undertake that they have adopted WTO-consistent legislation, regulations or "similar administrative procedures" to prohibit transhipment and visa counterfeiting, to impose penalties "sufficient to effectively deter violations," to co-operate with the US "to prevent circumvention as provided in Article 5" of the WTO textiles agreement, and to allow US customs to "investigate thoroughly allegations of transshipment."

The revisions follow media disclosure of the terms of the original US demand, complaints from US importers and several African governments.

Democrat congressmen William Jefferson of the Congressional Black Caucus, and the bill's original author, James McDermott, wrote to President Bill Clinton that: "Decisions related to administrative implementation (of the act) must not restrict trade between Africa and the US. We urge you not to be side-tracked by the same opponents who fought us each way in the legislative process."

Previous Stories:
  US erects trade hurdles for Africa   (9/29/2000)
  Emerging markets fair in Geneva   (9/20/2000)
  Italian sources: Italy cancels debts on 41 poor countries   (9/16/2000)

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