U.S.-Africa Trade:

U.S. Textile and Apparel Importers' Reactions to Trade Preference Options

NSIAD-98-217: Published: Jul 17, 1998. Publicly Released: Jul 17, 1998.

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Pursuant to a congressional request, GAO provided information on the possible reactions of major U.S. textile and apparel importers to different approaches for granting trade preferences to sub-Saharan African countries, focusing on the: (1) expected reactions of major U.S. textile and apparel importers to alternative approaches to that taken in H.R. 1432, the African Growth and Opportunity Act; and (2) factors that would likely influence U.S. importers' decisions on whether to begin or increase importing textiles and apparel from sub-Saharan Africa.

GAO noted that: (1) its interviews with major U.S. importers of textile and apparel revealed that the companies' interest in initiating or increasing imports from sub-Saharan Africa varies widely, depending on the various trade liberalizing approaches; (2) only a limited number of the companies GAO interviewed, 7 out of the 65, reported that they might begin or increase importing these products from the region over the next 5 years if the most restrictive product eligibility requirements for sub-Saharan African trade benefits are implemented; (3) this approach would provide duty-free, quota-free treatment only to products assembled in sub-Saharan Africa from U.S.-made thread and fabric that must also be cut in the United States; (4) of the 65 companies, 15 reported that they might begin or increase importing from the region if eligibility were restricted to products made from U.S. fabric but not requiring that the fabric be cut in the United States; (5) this contrasts with 54 out of the 65 companies that reported that they might begin or increase imports under the House bill, which would provide eligibility for products assembled in sub-Saharan Africa without specifying where the fabric is made or cut; (6) there were no major distinctions or systematic patterns distinguishing the types of companies that might import textiles and apparel from sub-Saharan Africa under any of the three approaches; (7) most of the importers GAO interviewed indicated that increases in the time and costs of shipping associated with transporting U.S. fabric to sub-Saharan Africa were important factors that would discourage them from importing from the region under either of the more restrictive approaches; and (8) conversely, the single most important factor influencing companies' interest in importing from sub-Saharan Africa under the House bill was the increased flexibility to choose the source of the fabric.

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