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African manufacturers welcome US trade deal, call to finalise it / Photo: SIMON MAINA - AFP
NYSE - LSE
African manufacturers welcome US trade deal, call to finalise it
African manufacturers on Wednesday welcomed US lawmakers' approval for renewing their duty-free access but called for urgency in finalising the deal.
The African Growth and Opportunity Act (AGOA) has been a cornerstone of trade relations for 25 years, allowing the United States to buy billions of dollars of duty-free cars, clothes and other items from select African countries each year.
But the deal, which operates in 32 African nations, expired last September, putting thousands of jobs at risk and forcing exporters to absorb high tariff duties.
On Tuesday, the US Congress passed a bill to revive AGOA for at least three years, but it must still be approved by the Senate.
The Congress vote was "a very positive sign", said Pankaj Bedi, CEO of United Aryan factory, which exports Wrangler and Levi's jeans under the deal and employs around 10,000 Kenyans.
"But we need to keep the pressure up," he told AFP. "It is our desperate need as the sector continues to slow down and suffer due to cash flows and many other external challenges."
Bedi said his company has been absorbing the increased import duties -- which went up by 33 percent for Kenya after AGOA expired -- so as not to lose customers, but said this is not "sustainable".
Kenya's trade minister Lee Kinyanjui welcomed the approval by the US House of Representatives, calling it a "critical milestone" in US-Africa trade relations.
"The uncertainty that had previously engulfed the sector will now give way to renewed confidence and expansion," Kinyanjui said in a statement.
South Africa, which has been at loggerheads with the US in recent months, also hailed the approval.
Its trade minister Parks Tau said the country "values its longstanding trade and investment relationship with the US".
US President Donald Trump has criticised free-trade deals, and slapped swingeing tariffs on many countries.
South Africa was the primary beneficiary of the preferential agreement before it expired. The automotive sector accounted for 64 percent of trade under AGOA, totalling $1.6 billion in 2024, and is the sector most affected by Trump's measures.
(E.Taylor--TAG)
