This bill covers almost all aspects of investment and trade between the US and SSA. This case will focus mainly on the area of textiles and apparel industry. This was one the most contentious issues debated as parts of AGOA. Many people in the textiles industry in the US were very concerned that the importation of cheaper textiles goods from SSA will not be good for US producers.

With the lack of competitiveness of SSA in the global market, especially in the manufacturing sector, there is a very limited threat to the market and jobs in the US The SSA textilse industry exports to the US represent less than 1% of all textiles and apparel goods,exported to the U.S1. The textiles industry in SSA is expected to grow at a very moderate rate between 1999 and 2003. This moderate rate will not reach a point that will threaten the US market any time soon. To protect American cotton farmers from an overflow of textiles from SSA, the President, must submit a report to Congress each year showing any growth of textiles and apparel goods exported to the US from SSA to protect consumers, workers and textiless manufactures from "economic injury on account of no quota policy" between US and SSA.

3. Related Cases:

EC Fur Ban

Costume Trade and Halloween

The Harp Seals

Reptile Trade From Mexico

Hudson's Bay Company Fur Trading in 1800's

Pakistani Leather Industry

Nutria Case Study

Scotland and China and Cashmere Trade

Saipan Case Study

Globalization of Cashmere Industry in Mongolia

Other Textiles and Apparel Goods Related Sites:

Textile and Apparel-Nafta

Textileworld.com

U. S. Department of Commerce-Office of Textiles and Apparel-OTEXA

4. Author and Date: Gabriel Laizer Jr. May 9th, 2001

II. Legal Clusters

5. Discourse and Status: Agreement and Complete

Textiles and agriculture has been one of the most difficult issues to resolve in the WTO as it was also in the former GATT system. This is about to change under the new 10-year agreement reached during the Uruguay Round. The import quotas system that has dominated these industries for so long is being phased out which might prevent further disputes within members of the WTO. Other disputes have arisen at times, because of unilateral actions taken by one country without consultation and agreement by its trading partner. Dumping and trans-boundry issues have resulted in disputes in the WTO that needs to be resolved immediately. The WTO's Dispute Settlement Body (DSB) and the Textiles Monitory Body (TMB) are two options that member countries have to settle disputes. AGOA provides its own legal structure to deal with problems such as trans-shipments of textiles through SSA by countries such as China. The treaty proposes several methods, such a a visa system, random inspections by US official or suspected textile smugglers ships as well as two year ban on duty-free to export textilse or apparel goods to the US for falsification of documents showing the country of origin.

6. Forum and Scope: USA and Multilateral

Until the Uruguay Round took effect, trade in textiles was governed by the Multifibre Arrangement (MFA), which was based on unilateral and bilateral agreements establishing quota limitations between two countries . This was put in place to help countries, which where facing serious economic damage from rapid increasing imports. In the case where dispute will arise between two trading partners, the Textiles Monitoring Body (TMB) will be the first option in trying to mediate the dispute. This body has authority also on any agreements and implementations reached on Textiles and Clothing within the WTO members. This is a quasi-judicial body consisting of a chairman and ten members who take all decisions by consensus. The members of this group are appointed by the WTO's member governments according to an agreed grouping of WTO members into constituencies. If this body does not resolve any dispute, the next option is left to the WTO's regular Dispute Settlement Body (DSB).

7. Decision Breadth: 42 Sub-Saharan African Countries Affected

All 42 Sub-Saharan African countries are members to this treaty. Certain conditions must be met, for members to qualify under the yearly review done by the President of the US and his Secretary of State. Such conditions are prevention of human rights abuse, improve labor conditions, prohibition of the use of forced labor, etc. At the same time, this treaty has received a lot of criticisms from even those who call themselves "Friends of Africa." Some have gone as far as calling this treaty "Africa Decolonization Act" as well as suggesting that this bill is another form of slavery. To find the middle ground for everyone to be satisfied by this treaty will be difficult. Opponents and supporters will always come up with different ways to argue for their side, but only time will tell on the success or failure of this treaty.

8. Legal Standing: Treaty

The textiles portion of Africa Growth and Opportunity Act (AGOA) will probably results in disputes in the future due to the imminent development of the textiles industry in Africa. For example, Kenya and Mauritius has been required by the US in order to qualify under this act, to prove that these two governments are in control of the textiles industry and the market to avoid illegal exportation of textile. Although at the moment most of African countries cannot present a threat to the textile market in the West due to the production capacity, this might change in the future. Thus there is a need to have clear "rules of engagement" in the textiles industry to avoid long and costly disputes in the future. In the possibility that a dispute might occur on the textiles agreement between the US and SSA under the AGOA, all disputes will be handled between Africa and the USA and not through the WTO. The WTO's role in this partnership is to make sure that this agreement does not hurt non-African textile producing countries.

Currently, there are almost no disputes pending in the WTO's Dispute Body between SSA and US specifically on the issues of textiles. The United States has filed complaints against both Argentina and India in the WTO dispute body specifically on the imposition of import quotas and specific duties on various textiles, footwear and apparel goods.. The US has argued that "certain measures maintained by Argentina are affecting imports of textiles, apparel or footwear, and in particular the imposition of duties on various textile products" is unfair resulting in higher cost to consumers.2 In the case of India, the US is complaining about "the problem of quantitative restrictions imposed by India on imports of agriculture, textiles and industrial products."3 Both of these cases are still pending in the WTO Dispute Body and its outcome could have big ramifications for all other textiles trading countries.

III. Geographic Clusters

9. Geographic Locations

1. Geographic-Domain-Africa

2. Geographic-Site-USA

3. Geographic-Impact-Africa

10. Sub-National Factors: None

11. Type of Habitat: Many

IV. Trade Clusters

12. Type of Measures: Quotas, Tariff

The international trade for textiless and clothing is going through major changes under the new 10-year plan initiated by the World Trade Organization. Before the beginning of this agreement quotas controlled a large section of trade in this industry. By agreeing to this plan, members are committing themselves to remove quotas and to "integrate the sector" completely into GATT by January 1st, 2005.4

Textile has been one of the most contentious issues in the GATT and the WTO. Ending quotas on textiles was one of the reason that developing countries agreed to negotiate issues such as intellectual property, services and investment in the Uruguay Round. Textiles and clothing account for 9.1% of world's manufactured goods exports or 6.5% of all merchandise goods.5 GATT Secretariat in 1994 proposed that the removal of quotas and the reduction in tariffs, will add up the value of textiles by almost 18% in 2005.6

The WTO Agreement on Textile and Clothing 1995-2005

Four steps will need to be taken to make sure that the textile sector is integrated into GATT 1994 (See Table 1 Below). Several safeguard mechanisms will be put in place to make sure that all members abide to their quota limitations so that their increase in production does not "cause serious damage or threaten domestic industry" in the importing country. This agreement also includes safeguards to prevent "circumvention of commitments through trans-shipment, rerouting, false declaration concerning country of origin," so that trade in textiles and its related products is done in a fair and open way for all countries to enjoy.

TABLE 1

The 10-year schedule for integrating the Textiles Sector into GATT rules is as follows:

STEP	% of product to be integrated at start of stage (Based on 1990 Trade)	Extension of growth rate for remaining quotas	Example of Quotas (to be applied annually) based on a 6% rate under former MFA
Step 1 Jan, 1st 1995 to Dec 31st, 1997	16%	Existing growth rate16%	7%
Step 2 Jan 1st, 1998 to Dec 31st, 2000	17%	Resulting growth of step 1x25%	8.7%
Step 3 Jan 1, 2002 to Dec 31st, 2004	18%	Resuming growth of step 2x27%	11.05%
Step 4 Full integration into GATT by Jan 1st , 2005	49%	Remaining quotas are eliminated	Remaining quotas are eliminated

NOTE: Graph Explanation:

Under this agreement, the textils and clothing products covered by the Agreement on Textiles and Clothing will get smaller with the quotas diminishing until all quotas are eliminated by January 1st 2005. The relationship between AGOA and this 10-Year Plan is based on the assumption that textiles producing countries in Africa might develop too fast and thus, the need to prevent economic damage for US producers and consumers of these products. The Textiles Monitoring Body (TMB) will oversee all regulations and implementation of commitment by all member countries. Certain special treatment for least-developed countries, small suppliers and new entrants might be provided by the monitoring body.

13. Direct v. Indirect Impact:

14. Relation of Trade Measure to Environmental Impact:

1. Directly Related to Product: Yes

2. Indirectly Related to Product: No

3. Not Related to Product: No

4. Related to Process: Yes

15. Trade Product Identification: Textile

16. Economic Data:

As the data below in table 2 shows, the amount of textiles produced in SSA is very low in comparison to countries such as Mexico or Honduras. These data does not support the argument that textiles produced in SSA will force farmers in the US out of business, causing unemployment and decline in prices for their textiles.

TABLE 2

Major shippers (exporters) of textiles products to the United States. (In millions of M^2).

COUNTRY	1998	1999	2000
MEXICO	958.96	1164.91	1260.66
HONDURAS	577.65	674.82	736.8
HONG KONG	488.62	483.02	471.34
CHINA	322.21	318.19	321.77
BOTSWANA	3.92	2.81	2.12
EGYPT	88.64	96.17	110.59
MAURITIUS	32.12	32.80	35.10
LESOTHO	21.09	24.36	30.31
KENYA	10.08	12.15	12.01
ZIMBABWE	2.8	4.8	5.0

TOTAL SUB-SAHARAN AFRICA

1998	1999	2000
103.49	116	145.47

*Data from: United States Chamber of Commerce.

TABLE 3
Textiles End Uses, 1998 (% by Pounds) (USA)

Source: Fiber Organon, 1998

18. Industry Sector: Textile

19: Exporters: Africa Importer: USA.

V. Environment Clusters

20. Environmental Problem Type: Rights

21. Name, Type and Diversity of Species: None

22. Resource Impact and Effect: Medium

23. Urgency and Lifetime: High and Yearly Certified

24. Substitutes: Synth

VI. Other Factors

25. Culture: None

26: Trans-Boundry Issues: No

27: Rights: Yes

While it is true that AGOA has come under very strong opposition, many of its provisions clearly will benefit Africa and its economic recovery plans. AGOA's goals such as reforming political and economic institutions, eradication of poverty, increasing incentives to market and the private sector, and strengthening women economic growth and development is very critical and much needed in Africa. The eligibility requirement of AGOA has also received a lot of criticism, but some of its policies are what Africa needs to develop. AGOA clearly states the need for African countries to prevent the violation of human rights as well as the protection of property rights. It also requires that African countries "recognize workers rights, including the right to organize and bargain collectively, prohibit the use of forced labor, provide a minimum working age and acceptable work conditions including wages, hours of work and occupational safety."9 All these policies are in the hope that Africa will provide an open economy that will attract foreign investment and open up the market for goods from the United States. By Africa accepting the requirements set by AGOA, it is expecting its products to get a good market in the USA. It is true that Africa has a lot to gain from AGOA. It is also important that the AGOA bill respects the sovereignty of African countries and lessens its conditions for eligibility so that its original intention, which was to encourage trade and investment between the two areas, will result in mutual benefits for all citizens.

The negative aspects of the conditions set by the AGOA, on African countries are, such as the agreement to "undergo radical economic restructuring including corporate tax cuts, reduction in government spending and privatization of some of the most valuable assets such as mines, forests, harbors" etc. This fast and costly restructuring program might benefit wealthy foreigners who can afford to buy assets being sold by many SSA rather than benefit the poor.10 The textiles and apparel goods industry is one of the areas that AGOA has put a lot of emphasis on because of Africa's potential production capability. The potential of the textile industry in Africa is immense, but under AGOA, small farmers might be hurt more than helped. These are farmers who depend on the income from textiles to pay for the education, health and food for their families. The bill requires that member countries join the World Trade Organization (WTO), but WTO rules also require that "countries that import more food than they export must cut domestic agriculture subsidies."11 Taking away subsidies from small farmers will definitely hurt many farmers and will not be in the interest of African governments.

Just as in the Structural Adjustment proposed by the World Bank and International Monetary Fund in the 1970's, many of the provisions in this bill will reduce "education and social programs while increasing inequality."12 So far, over 44 million African children are not in school and school attendance in Africa is on the decline. In Zambia alone, the IMF pressured the government to cut expenditures which resulted in the drop in education spending from 13.4% in 1985 to 9.1% in 1992.14This is the same story all over Africa. This is what has caused the opposition that this bill has received from African leaders and many African American advocates for Africa.

The potential benefit of AGOA for both the USA and SSA is immense. Under the conditions set by this treaty, farmers from textile producing states are well protected by quotas and tariffs while SSA producers are encouraged to join the market by using the latest technology available. The benefits of this treaty goes beyond the textile industry by opening up the SSA market to many other products from the United States. It also encourages the United States to open it market for many other products from SSA.

1. H. R. 2489 Section 7, Subsection A, #2

2. WT/DS56/AB/R-Argentina-Measures Affecting Import of Footwear, Textile and Other Items.

3. WT/DS90/AB/R-India-Quantitative Restrictions of Imports of Agriculture, Textile and Industrial Products

4 See. "10-Year Plan"

5. Ibid,.

6. Ibid,

7. See "Causes Serious Damage."

8. See "Major Shippers Report."

9. H.R. 2489 (AGOA) 1999 Section 4, Eligibility #5

10. Ibid,.

11. Ibid,.

12 Http://www.prairienet.org/acas/acasback.htm

13. Transafrica-"Bill Seen as Threat to Countries Sovereignty."

14. Ibid,.

15. See "Not Acceptable" By:

Herbert, Bob "In America: At What Cost? New York Times, June 7th, 1998. Sunday Ed.

16. All Photos found at Http://www.corbis.com (Unless otherwise specified)

17. "Cotton Ball Picture" Found at Http://www.viewimages.com/viewimage/?imageid=25631&promotionid=1&partnerid=2&type=results,

Picture by: Adalberto Rios Szalay

.