An Opportunity for Greater Opportunity Around the World—Through Smart Trade
For the past decade in particular, U.S. apparel and footwear companies have been intensely focused on sourcing diversification. As U.S.-China and related geopolitical tensions increase, the momentum is even stronger.
Now (and yesterday) is the time for companies to make investments beyond their traditional trading partners.
In fact, recent industry surveys indicate that countries in the Western Hemisphere are of interest for more investment. Africa and the U.S. provide investment opportunities too.
Trade offers so many benefits at home and around the world, from economic and security improvements to quality of life and access to critical resources. That’s why Congress needs to recognize that the same top-tier concerns in the areas of immigration and national security can be addressed significantly by trade around the world.
That’s where you come in: a) U.S. residents (in California or wherever you may be reading from) and b) industry voices. YOUR members of Congress need to hear YOUR voices on smart trade. You are their constituents. You employ workers in their district or state. Pick your passion, and speak up with us:
Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB)
• The 34-month expiration of the GSP and MTB programs has left companies uncertain of their current and future investments.
• GSP promotes economic and sustainable development in developing countries by eliminating duties on thousands of products imported from 119 designated beneficiary countries, including travel goods.
• The MTB allows American companies the ability to eliminate or reduce duties on nearly 2,500 inputs and finished goods not available or manufactured in the United States.
• Further, the expiration of these programs that traditionally have bipartisan support only add doubt to the renewal of other soon-to-expire trade programs, like Haiti and the African Growth and Opportunity Act (AGOA).
• Haiti is going through one of its worst crises ever. We have an incredible opportunity right now to take advantage of the sourcing diversification that is going on in the industry to encourage some of that trade and investment to Haiti.
• However, if Haiti HOPE/HELP are not renewed well prior to the September 2025 expiration, companies will begin to shift their sourcing as soon as next year.
African Growth and Opportunities Act
• The African continent should be a huge magnet for our industry, but many companies are bypassing it because they don’t know if Congress will reauthorize AGOA before it expires in September 2025. Washington inaction speaks volumes, and it is currently telling these companies—go elsewhere.
• Sourcing decisions are already being made for goods that will be shipped after AGOA’s current expiration in September 2025. As we approach the expiration date, trade will drop off further as sourcing is shifted away from African countries to more-predictable trade partners.
• We want to see AGOA renewal for ten years or more, and it needs to be by year-end for investments to flourish as sourcing decision-makers make their decisions in the hours and days ahead.
AAFA is laser focused on making sure these measures get addressed in an end-of-year trade package in December and is starting to see momentum from this work, especially with White House energy behind AGOA.
Failure by Congress to act quickly will adversely affect more than just the U.S. textile and apparel industry. If Congress lets AGOA renewal be delayed, it sends a powerful message that the U.S. is not willing to prioritize a strong U.S.-Africa relationship. At a time when the U.S. is still working to reinforce partnerships globally–and we need those partnerships now more than ever–we simply cannot afford to overlook an entire continent.
If you want to make a trip to Washington, D.C. (in person, virtually or even just on paper) to push progress on these policies, we can help.
About the author: Beth Hughes is vice president, trade and customs policy, at the American Apparel & Footwear Association, where she oversees AAFA’s Trade Policy Committee and AAFA’s Customs Group. She is also chief spokesperson for the Coalition for Economic Partnership in the Americas (CEPA) launched in November 2021. Follow on LinkedIn and X@BeffRae