Federal Register Notice

This notice announces the initiation of the annual review of the eligibility of the sub-Saharan African countries to receive the benefits of the African Growth and Opportunity Act (AGOA). The AGOA Implementation Subcommittee of the Trade Policy Staff Committee is developing recommendations for the President on AGOA country eligibility for calendar year 2018.

The Subcommittee is requesting written public comments for this review and will conduct a public hearing on this matter. The Subcommittee will consider the written comments, written testimony, and oral testimony in developing recommendations for the President. Comments received related to the child labor criteria may also be considered by the Secretary of Labor in the preparation of the Department of Labor’s report on child labor as required under section 504 of the Trade Act of 1974. This notice identifies the eligibility criteria under AGOA that must be considered under AGOA, and lists those sub-Saharan African countries that are currently eligible for the benefits of AGOA and those that were ineligible for such benefits in 2017.

Dates

August 4, 2017: Deadline for filing requests to appear at the August 23, 2017 public hearing, and for filing pre-hearing briefs, statements, or comments on sub-Saharan African countries’ AGOA eligibility.

August 23, 2017: AGOA Implementation Subcommittee of the TPSC will convene a public hearing on AGOA country eligibility.

August 30, 2017: Deadline for filing post-hearing briefs, statements, or comments on this matter.

---

Background

AGOA (Title I of the Trade and Development Act of 2000, Pub. L. 106-200) (19 U.S.C. 2466a et seq.), as amended, authorizes the President to designate sub-Saharan African countries as beneficiaries eligible for duty-free treatment for certain additional products not included for duty-free treatment under the Generalized System of Preferences (GSP) (Title V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.) (1974 Act), as well as for the preferential treatment for certain textile and apparel articles.

The President may designate a country as a beneficiary sub-Saharan African country eligible for these benefits of AGOA if he determines that the country meets the eligibility criteria set forth in Section 104 of AGOA (19 U.S.C. 3703) section 502 of the 1974 Act (19 U.S.C. 2462).

Section 104 of AGOA includes requirements that the country has established or is making continual progress toward establishing, inter alia: A market-based economy; the rule of law, political pluralism, and the right to due process; the elimination of barriers to U.S. trade and investment; economic policies to reduce poverty; a system to combat corruption and bribery; and the protection of internationally recognized worker rights. In addition, the country may not engage in activities that undermine U.S. national security or foreign policy interests or engage in gross violations of internationally recognized human rights. Please see section 104 of the AGOA and section 502 of the 1874 Act for a complete list of the AGOA eligibility criteria.

Section 502 of the 1974 Act provides for country eligibility criteria under GSP, which is generally reviewed as a result of a petition process. For more information on the GSP criteria and review process, see section 502 of the 1974 Act and the annual Federal Register notice initiating the GSP product and country practices review.

Section 506A of the 1974 Act provides that the President shall monitor and review annually the progress of each sub-Saharan African country in meeting the foregoing eligibility criteria in order to determine whether each beneficiary sub-Saharan African country should continue to be eligible, and whether each sub-Saharan African country that is currently not a beneficiary, should be designated as such a country. If the President determines that a beneficiary sub-Saharan African country is not making continual progress in meeting the eligibility requirements, he must terminate the designation of the country as a beneficiary sub-Saharan African country. The President may also withdraw, suspend, or limit the application of duty-free treatment with respect to specific articles from a country if he determines that it would be more effective in promoting compliance with AGOA-eligibility requirements than terminating the designation of the country as a beneficiary sub-Saharan African country.

For 2017, 38 countries were designated as beneficiary sub-Saharan African countries. These countries, as well as the countries currently designated as ineligible, are listed below. The Subcommittee is seeking public comments in connection with the annual review of sub-Saharan African countries’ eligibility for AGOA’s benefits. The Subcommittee will consider any such comments in developing recommendations to the President related to this review. Comments related to the child labor criteria may also be considered by the Secretary of Labor in making the findings required under section 504 of the 1974 Act.

The following sub-Saharan African countries were designated as beneficiary sub-Saharan African countries in 2017:

Republic of Zambia

The following sub-Saharan African countries were not designated as beneficiary sub-Saharan African countries in 2017:

Republic of Zimbabwe

A selection of documents submitted ahead of the 23 August 2017 hearing are available below.

---

Joint submission from the National Association of Automobile Manufacturers of South Africa (NAAMSA) and National Association of Automotive Component and Allied Manufacturers (NAACAM)

As a general statement, we would point out that in many respects South Africa complies and, in some cases, exceeds internationally accepted norms and standards in respect of most of the requirements and criteria which forms part of the Review.

Comment on the specific focus of the Review, namely, whether the AGOA beneficiary country, in this case South Africa, has established or is making continual progress towards establishing / implementing a number of socio-political-economic performance criteria is summarised hereunder.

The elimination of barriers to US Trade and Investment

Other than certain regulatory technical, safety and health provisions, NAAMSA and NAACAM are unaware of any significant barriers to US Trade and Investment.

Automotive trade between the United States and South Africa has shown consistent growth with imports into South Africa from the USA growing at a substantially faster rate, in many years, than South African automotive exports to the United States.

Where there are legitimate concerns on the part of US interests regarding barriers to trade and investment – these can and should be addressed between the respective governments / administrations. It is our understanding that the South African government remains open and willing to consider issues in this regard.

NAAMSA and NAACAM are aware of the concern by the US administration and various US businesses about the unfair advantage enjoyed by European companies as a result of the South Africa-European Union Free Trade Agreement. Moreover, the United States has indicated a desire to move to more permanent trade and investment relations with South Africa.

NAAMSA and NAACAM herewith reiterate preparedness to participate in discussions with the United States administration, via the South African government, on the possibility of a future bilateral trade agreement between the two countries. The South African government is aware of this.

---

Public Comments of Secondary Materials and Recycled Textiles Association

SMART welcomes the opportunity to provide input in this review because SMART has grave concerns regarding the ban on imports of secondhand clothing (also referred to as “used clothing”) which these countries have recently begun to phase in. The Committee will recall that SMART filed a petition for an Out of Cycle review of eligibility benefits of these same countries earlier this year and was granted a hearing on July 13, 2017. At that hearing we presented compelling testimony to the committee supporting our recommended suspension of duty-free access to the United States under AGOA for all currently eligible apparel imports from Tanzania, Rwanda, and Uganda until such time as those countries roll back all increased import duties on used clothing and commit not to implement their proposed ban on imports of used clothing.

Our position on this has not changed since the hearing because this ban on imports would directly and negatively affect the exports of SMART’s member companies to the East African Community (“EAC”). As detailed below, the initial stages of the implementation of this ban are already having an impact on exports of secondhand clothing from the United States to Kenya, Rwanda, Tanzania, and Uganda. Implementation of the ban would expressly violate one of the key obligations of AGOA beneficiaries – to work toward elimination of barriers to U.S. trade and investment. It would also create severe economic hardships for the secondhand clothing industry in the United States, cost jobs in the United States as well as in Kenya, Tanzania, Rwanda, and Uganda, and result in other negative consequences in the United States and EAC.

---

American Federation of Labor & Congress of Industrial Organizations (AFL-CIO): Request to testify and pre-hearing brief on the petition to remove Swaziland from the list of AGOA beneficiary countries

The Government of Swaziland has not established or made continual progress towards establishing internationally recognized worker rights, as required under 19 USC § 3703(1)(F). The country should remain ineligible for benefits under the African Growth and Opportunity Act (AGOA).

The Government of Swaziland continues to restrict internationally recognized worker rights in both law and practice, including the right to freedom of association and the right to organize and bargain collectively. Efforts at reform have been slow and only partially address the legal barriers that prevent workers for exercising their rights. Labor activists are targeted for repression and violence. As detailed in our initial petition, the country has been under formal review by the International Labor Organization (ILO) at least 14 times, and has been the subject of two High Level Missions, a process reserved for the most serious breaches. Despite enhanced scrutiny from both the ILO and the removal of AGOA benefits, the Government has not taken meaningful action. This does not represent the establishment of or continual progress towards establishing internationally recognized worker rights.