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Weekly Trade Spotlight: The Third-Country Fabric Provision of the African Growth and Opportunity Act

The renewal of the third-country fabric (TCF) provision of the African Growth and Opportunity Act (AGOA) – passed by Congress last week – is welcome news for apparel workers in Africa and will contribute to a strong foreign policy foundation in the Sub-Saharan Africa region.

In many Sub-Saharan African countries, manufacturers use fabric from international sources to produce apparel because the regional fabric supply is limited. These same apparel manufacturers then export their finished products to the United States. Normally, these products would be subject to U.S. import duties, but the TCF provision lifts those duties and helps to support jobs and the manufacturing industry in certain lesser-developed Sub-Saharan African countries. The benefits of the TCF provision also extend to American apparel retailers; it helps them reduce their costs, diversify their supply chains, and create more apparel options for American consumers. The TCF provision was scheduled to expire in September of this year, but on August 2nd, Congress acted to renew it, safeguarding thousands of jobs for textile workers throughout Sub-Saharan Africa.

lucky mills
U.S. Trade Representative Ron Kirk visiting the Lucky 1888 Mills in Tema, Ghana

In addition to supporting jobs, the renewal of the TCF provision will help the U.S. achieve many of its regional foreign policy objectives. President Obama’s new “U.S. Strategy for Sub-Saharan Africa” describes “sustainable, inclusive economic growth” as a “key ingredient to security, political stability, and development” in the region. The TCF provision, which helps to support stable employment for textile workers, many of whom are women, is making a strong contribution toward that goal.

U.S. Trade Representative Ron Kirk recently traveled to Ghana to highlight the Obama Administration’s new Sub-Saharan African Strategy, and to demonstrate the benefits of the TCF provision. In the course of his visit, Ambassador Kirk toured the Lucky 1888 Mills in Tema, Ghana, and met with workers. Lucky 1888 Mills, which uses the TCF provision to export to the United States, employs approximately 500 women in quality jobs with competitive wages.