By Jim Fisher-Thompson
Washington File Staff Writer

Washington -- A number of sub-Saharan African countries should be able to take advantage of favorable export provisions in the African Growth and Opportunity Act (AGOA) to spur their textile industries, says trade specialist Steve Lande. But Mozambique and Tanzania, in particular, are poised to benefit from the new law because of their low per capita (per person) incomes and nearness to Asia.

Lande, who is president of the consulting firm Manchester Trade, said in a February 27 interview that Mozambique and Tanzania "both have good ports; both have good potential export-processing zones and an available labor force -- they are both sitting there with this very nice potential for investment and they could be the sleepers of the program [have surprising success]."

He said, "One of the concerns that many of us have is that more developed African nations [so far 35 African countries have been deemed eligible for the duty-free, quota-free entry of certain textile and clothing products into the U.S. market under AGOA] will appropriate most of the benefits of the act because they are more advanced and, frankly, they don't need it."

However, for wealthier nations there is a downside in the law because it requires that their duty-free clothing exports be made from fabric and yarn imported from America. On the other hand, a section of the trade law called "Special Rule for Lesser Developed Countries" allows the duty-free export of clothing made from fabric and yarn "regardless of the country of origin" by countries that "had a per capita gross national product of less than $1,500 a year in 1998, as measured by the World Bank."

This is where both Mozambique and Tanzania may have an opportunity to take real advantage of the act, Lande pointed out, because "it means both could use Far Eastern fabric and yarn for their clothing production [which is less costly than the American variety] until cheaper sources of African yarn and fabric become available." The income provision excludes South Africa and Mauritius, with their robust textile sectors, which means the poorer nations' textile industries will have a competitive edge in the U.S. market and a chance to grow. "So Mozambique and Tanzania might both be sleepers of the act, especially in East Africa," he repeated.

Lande said another benefit for Mozambique and Tanzania under AGOA is the ability "to ship unlimited amounts of folkloric items, which could be a big growth item because there is a lot of folkloric fabric in Africa or items that have been shown to be in short supply, particularly cashmere products."

Before setting up Manchester Trade, Lande served in the State Department as an economics officer at U.S. embassies in Luxembourg and Greece. He later became an assistant U.S. trade representative (USTR).

The trade expert visited both Mozambique and Tanzania and spoke on AGOA implementation last fall in a tour sponsored by the State Department's Speakers Program. Passed by Congress last May, AGOA aims to spur economic development on the continent by "offering the countries of sub-Saharan Africa enhanced trade preferences [in order to] encourage both higher levels of trade and direct investment in support of the positive economic and political developments under way throughout the region."

The 35 sub-Saharan African countries that have thus far been designated eligible for AGOA's trade benefits are Benin, Botswana, Cape Verde, Cameroon, Central African Republic, Chad, Republic of Congo, Djibouti, Eritrea, Ethiopia, Gabon, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania, Uganda and Zambia.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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