NAIROBI, Kenya (AP) \u2014 Workers and industry are bracing for the end of a longstanding U.S. trade agreement that gave African exporters preferential treatment and now leaves businesses vulnerable to new competitive pressures and tariffs.<\/p>\n
The African Growth and Opportunity Act (AGOA) will terminate as scheduled on Tuesday amid uncertainty over renegotiations and the looming impact of new tariffs announced by the White House in April.<\/p>\n
AGOA is a multilateral trade agreement that has given thousands of products from qualifying African nations duty-free access to U.S. markets since 2000.<\/p>\n
A key example of the deal\u2019s impact can be found in Kenya, where it has allowed the country\u2019s textile and apparel sector \u2014 makers of jeans, for instance \u2014 to effectively compete with Asian exporters such as in Bangladesh and Vietnam.<\/p>\n
\u201cIf AGOA goes away we have zero chance to compete with the Asian countries,\u201d said Pankaj Bedi, owner of United Aryan, an apparel manufacturer in Nairobi that exports Levi\u2019s and Wrangler jeans to the U.S.<\/p>\n
Textile and apparel exports from Kenya to the U.S. have grown from around $50 million when AGOA was first introduced to around $500 million today.<\/p>\n
\u201cI will be asking (Trump) for the U.S. to consider seriously renewing and extending AGOA for at least a minimum of five years,\u201d Kenyan president William Ruto said last week at the UN General Assembly in New York. \u201cIt is a platform that connects Africa and the U.S. in a very fundamental way.\u201d<\/p>\n
AGOA had also given African countries hope that major elements of their export economies would be exempt from blanket tariffs of 10% \u2014 and in some cases much higher \u2014 announced by the U.S. earlier this year.<\/p>\n
Kenya is already paying 10% on non-AGOA exports, which are not many. Kenyan manufacturers will struggle to compete with rivals in Asia, even though some Asian countries may face a higher U.S. tariff, because of the limited domestic supply chain in Kenya where most of the raw materials are imported, as well as higher energy costs, lending rates, and operating expenses.<\/p>\n
Ruto and other African leaders are pushing for a last-minute renegotiation of AGOA while also scrambling to sign new bilateral agreements with the U.S. They are doing so amid a period of seismic change in global trade dynamics and with a White House that shows a mixed commitment to Africa.<\/p>\n
\u201cAfrican countries including Kenya must be alive to the possibility that AGOA won\u2019t be extended, AGOA won\u2019t be remodified, and \u2026 America won\u2019t be interested in having a trade pact,\u201d said Raphael Obonyo, a public policy expert at UN Habitat.<\/p>\n
Ruto said last week that Kenya and the U.S had made \u201cgood progress\u201d toward a bilateral agreement that could be signed by the end of this year.<\/p>\n
AGOA has mostly benefitted African economies in both big and small industries. The agreement has helped both the continent\u2019s largest exporters\u2014Nigerian and Angolan oil, South African autos, and Kenyan clothing\u2014as well as some of its smallest economies where exports are highly concentrated, such as Lesotho and Eswatini.<\/p>\n
Some African economies, like Nigeria and Lesotho, are likely to face \u201cnotable adverse effects\u201d from the end of AGOA and new U.S. tariffs, researchers at the German Institute of Development and Sustainability wrote in a brief.<\/p>\n
While there may be limited macroeconomic effects across Africa as a whole from changes to U.S. trade, these assumptions \u201clikely understate the full impact of new Trump-era tariffs and do not capture the indirect effects like reduced foreign investment, weakened supply chains, rising poverty, or the loss of capacity-building,\u201d the researchers added.<\/p>\n
AGOA-dependent industries likely employ some 1.3 million people whose jobs are now at risk \u2014 in countries where many people have few if any other options in the case of sudden unemployment.<\/p>\n
In Kenya, more than 66,000 people, many of them women, were employed through now-vulnerable textile and apparel exporters to the U.S. In the garment districts of Kenya\u2019s bustling capital, job cuts and fears over livelihoods have already begun.<\/p>\n
United Aryan said this week that it will shed some 1,000 jobs or 10% of its workforce amid trade uncertainty.<\/p>\n
\u201cThere is no way we can survive,\u201d added Bedi, who is also the apparel export sub-chair at the Kenya Association of Manufacturers.<\/p>\n
For Julia Shigadi, a machinist at United Aryan, the end of AGOA is an existential threat.<\/p>\n
\u201cThis has been my bread and butter,\u201d said Shigadi. \u201cI only depend on this job\u2014so if it is gone, it means my life is gone too.\u201d<\/p>\n
___<\/p>\n
For more on Africa and development: https:\/\/apnews.com\/hub\/africa-pulse<\/a><\/p>\n ___<\/p>\n The Associated Press receives financial support for global health and development coverage in Africa from the Gates Foundation. The AP is solely responsible for all content. Find AP\u2019s standards<\/a> for working with philanthropies, a list of supporters and funded coverage areas at AP.org<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"NAIROBI, Kenya (AP) \u2014 Workers and industry are bracing for the end of a longstanding U.S. trade agreement…\n","protected":false},"author":3,"featured_media":267297,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[7779,64,12042,79,57,86,13790,139305,2244,139308,139307,139306,16618,67,132,68,133563,107],"class_list":{"0":"post-267296","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-africa","9":"tag-business","10":"tag-economic-policy","11":"tag-economy","12":"tag-general-news","13":"tag-government-policy","14":"tag-international-trade","15":"tag-julia-shigadi","16":"tag-kenya","17":"tag-kenya-government","18":"tag-pankaj-bedi","19":"tag-raphael-obonyo","20":"tag-tariffs-and-global-trade","21":"tag-united-states","22":"tag-unitedstates","23":"tag-us","24":"tag-william-ruto","25":"tag-world-news"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115294997629283201","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/267296","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=267296"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/267296\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/267297"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=267296"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=267296"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=267296"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}