On 19 July 2012 the United States of America's Senate Finance Committee approved the extension of the Africa Growth and Opportunity Act's (AGOA) third-country fabric provision.

The third-county fabric provision was set to expire on 30 September 2012 and would have had dire economic consequences for textile businesses in sub-Saharan Africa.

Under AGOA qualifying sub-Saharan countries may export an eligible list of apparel products to the United States duty-free and quota-free until 2015. Typically the apparel products will be eligible for such duty-free and quota-free treatment if they are made from yarn and fabric originating from the United States or sub-Saharan Africa. The third-country fabric provision attempts to assist lesser developed countries in sub-Saharan Africa by allowing them to use fabric and yarn which originates anywhere in the world as long as the apparel products are wholly assembled in these lesser developed sub-Saharan African countries. This third-country fabric provision has now been extended to 30 September 2015 when the overall AGOA programme is set to expire. The extension is welcomed as it will greatly assist these lesser developed countries apparel and textile industries.

On 10 August 2012 President Obama signed the law that officially renews the third-country fabric provision until September 2015.

Rian Geldenhuys
© Trade Law Chambers 2012