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Origin Africa 2015 Seminar Highlight - Opportunities & Challenges to AGOA Extension – The Next 10 Years.

Published on October 28, 2015

Trade shows are invaluable for creating networking opportunities and business linkages that lead to increased investment and sales. Good trade shows also offer educational opportunities. The Hub helped kick off the Origin Africa 2015 trade show seminar series by joining a panel of representatives from the private sector to discuss Opportunities & Challenges to AGOA Extension – The Next 10 Years.

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Panelist Roy Ashurt, Phillips Van Heusen (PVH) Africa and the Middle East Hub Leader, addresses seminar attendees

An Overview

The AGOA effect – "Since AGOA introduction (2000), trade between Africa and the U.S. has grown by 300 percent," said panel moderator Lilowtee Rajmun, from the Mauritius Export Association. She emphasized that this is two-way trade, the U.S. to Africa and Africa to the U.S.

First takeway - AGOA is promoting trade, but, until now, not necessarily investment

The game changer - In June 2015, the U.S. Government renewed AGOA for an unprecedented 10 years. Furthermore, they tied the third country fabric provision to the renewal. The end result: investor confidence.

“The recent 10-year AGOA extension provides greater certainty for African producers and U.S. buyers about access to the U.S. market and creates a stable environment that encourages increased investment in sub-Saharan Africa,” said U.S. Ambassador to Ethiopia Patricia Haslach during the Origin Africa 2015 official opening.

Panelist Roy Ashurt, Phillips Van Heusen (PVH) Africa and the Middle East Hub Leader, couldn’t agree more.

"Africa has it all, people, resources (with the cheapest electricity in the world in Ethiopia*), and tremendous support from governments. "The ten-year extension opens up the potential for a sustainable apparel and textile industry – to be compliant and competitive,” said Ashurst.

*Electricity per kilowatt hour in Ethiopia is just $0.05. China’s can be as much as double.

The question mark – TPP, the Trans-Pacific Partnership, a proposed trade agreement among twelve Pacific Rim countries.

All the panelists highlighted the unknown aspects of TPP, specifically details, timing and likelihood.  Panelist Bob Berg, Senior Sales Manager for Sourcing at Magic (the premier apparel trade show in the U.S.) presented a slide of what we know about TPP. The slide was blank.

Second takeaway – Despite the unknown nature of TPP, all panelists agreed that now is the time for Africa to secure its supply chains, with greater vertical integration, and reduce its lead times.

Mr. Ashurst addressed the seminar attendees,

"Encourage your suppliers to invest in Africa – Africa can become a world leader not only in cost, but in lead time and also sustainability and compliance."