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Fact Sheet African Growth and Opportunity Act and Caribbean Basin Initiative Trade Enhancement Act Washington, DC, May 4, 2000 Released by Office of the United States Trade Representative

African Growth and Opportunity Act (AGOA) --The bill would provide sub-Saharan African countries, among the poorest nations in the world, with new prospects in the U.S. market. Opportunities for market-led investment and economic growth would be created through the elimination of tariffs on most African apparel imports, which are often 15% to 20% of the value of such imports. AGOA has the potential to spur economic development and job creation in a region that has some of the highest child malnutrition, infant mortality, illiteracy, and urban unemployment rates in the world. --The principal elements of the compromise include duty-free U.S. market access (without a cap or limit) for a number of apparel products in Africa. Other duty-free African apparel imports would be limited to a fixed percentage of total U.S. apparel imports. The percentage of allowable duty-free African apparel would increase annually. --For example, while subject to reasonable safeguards, African apparel made from cashmere and silk yarns; apparel made from yarns/fibers not available in the U.S. or Africa; and apparel made with U.S. fabric/yarns could enter into the U.S. market without duty under the provisions of this bill. --African apparel imports made with African (regional) fabric/yarn would be subject to a cap of 1.5%-3.5% of overall U.S. apparel imports over an 8-year period. This cap would also include a special provision for the poorest African countries. Under this provision, African countries with an annual GNP of $1,500 and below could use third-country fabric inputs for four years. This special investment incentive for the poorest African countries is aimed at providing a market stimulus to economic development for areas with little existing industry. --The bill provides an opportunity for sustained annual growth of at least 30% in duty-free exports of African apparel to the U.S. It also provides for countless trade and investment opportunities in a number of other sectors. It provides additional security for investors and traders in eligible African countries by ensuring GSP benefits for eight years. Caribbean Basin Initiative Trade Enhancement Act (CBI) --The bill would bring long-term benefits to the U.S. economy and would contribute to U.S. national security by helping democratic countries build political and economic stability. --CBI Enhancement would reinforce relations and partnerships with Caribbean nations, while solidifying a market for U.S. textile industry products. --In 1999, U.S. exports to CBI countries exceeded $19 billion, making this group the sixth-largest export market for the U.S. that year. --CBI Enhancement would provide duty-free, quota-free access for apparel assembled in CBI-beneficiary countries from U.S. fabric and yarn. Duty-free treatment also will be provided for apparel assembled from CBI regional fabric, subject to a quantitative limit that grows over time. --CBI Enhancement also extends duty-free treatment to other products previously excluded from CBI, e.g.: canned tuna, petroleum and its derivatives, and certain footwear. --CBI would benefit the U.S. economy and society by building stronger trading partners in the region and supporting democratic rule. The program encourages diversification of CBI countries' economies, an important component for economic development that decreases dependence on aid and reduces illegal immigration into the United States and drug trafficking. --CBI enhancement would send a strong signal to the countries throughout the Americas that the United States remains committed to promoting trade-expanding policies. In particular, CBI enhancement represents an additional step toward achieving the Summit of the Americas objective to create the Free Trade Area of the Americas. The FTAA would replace the patchwork of one-way preferences and multiple sub-regional rules with a single agreement on reciprocal access, expanding the U.S. and regional trade markets. --The bill would help Caribbean and Central American countries to continue to rebuild from devastating hurricanes. [end of document] African Affairs | Department of State | Secretary of State