The U.S. Africa Growth and Opportunity Act (hereinafter referred to as "the Act") was passed by the House of Representatives and the Senate on May 4 and 11, 2000, respectively, and was signed and ratified by President Clinton on May 18 and became effective on October 1, with a term until September 30, 2008. On August 1, 2002, amendments to the Act, known as Phase II of the Act, were adopted.
The Act provides unilateral trade preferences for 48 sub-Saharan African (hereinafter referred to as "Black African") countries to export 460 commodities to the United States duty-free under the Generalized System of Preferences (GSP) for a period of eight years for Black African countries that qualify under the Act. Among the most significant benefits under the Act's arrangements are textiles and apparel, and five of these categories are duty-free and quota-free
Black African countries have generally welcomed the Act. The U.S. government said the bill could accelerate reforms in Africa, promote Africa's access to U.S. expertise, credit and markets, as well as open up avenues for high-level dialogue on trade and investment, bringing change to long-term U.S.-Africa relations and helping Africa achieve prosperity. Arguably, the signing and implementation of the Act was a significant event in Africa's bilateral trade with the United States. In January 2003, at the second United States-Africa Economic Forum, held in Mauritius, United States President George W. Bush announced to the General Assembly, via a videotaped message, that he would recommend to the United States Congress that the Act be extended. Once the proposal is approved by the United States Congress, the Act will remain in force for a new period beyond 2008. African countries welcomed President Bush's motion and hoped that it would be extended to 2015. Because since the implementation of the Act, black African countries into the U.S. market textile and apparel volume has increased greatly, some countries take this opportunity to invest heavily in the construction of cotton textile and garment factories, is expected to export to the United States in the next few years of textiles will also have a relatively large increase.
The main content of the bill
(a) the standards of the beneficiary countries
The bill puts forward the following criteria for the beneficiary countries: (1) must have been established or in the establishment of a market economy, the clear protection of private property, to ensure that the promotion of economic liberalization; (2) a sound legal system and political pluralism, have been formulated or in the formulation of policies to combat poverty; (3) the abolition of barriers to U.S. trade and investment in the United States. (3) removing barriers to U.S. trade and investment, establishing trade dispute settlement mechanisms, and protecting intellectual property rights; (4) opposing corruption and practicing democratic civil government; (5) improving the environment, enhancing health care, paying attention to food safety, and increasing educational opportunities; (6) taking steps to refrain from infringing on internationally recognized human rights, protecting labor rights, and eliminating child labor; and (7) opposing international terrorism and refraining from activities that would jeopardize U.S. national security and foreign interests. and diplomatic interests of the United States. Thirty-eight Black African countries are now eligible beneficiaries of the Act.
(ii) Goods subject to zero tariff.
The U.S. has determined that non-import-sensitive goods from Black African countries can enter the U.S. market duty-free under the Generalized System of Preferences (GSP), and there are about 460 such goods, including strategic resources such as oil. On December 21, 2000, President Clinton increased the number of goods that can be exempted from tariffs to 1,800, including footwear, baggage, handbags, watches, and flatware, etc.
(1) The U.S. is the first country to be granted zero tariffs under the GSP, and it is now the first country to be granted zero tariffs.
(C) Clothing Provisions
1. The Act eliminates import quotas on African textiles and clothing.
2. Eligible countries for the Act are not necessarily entitled to preferential treatment under the Clothing Clause. The Act's criteria are: must be able to establish an effective export visa system; to investigate and eliminate illegal re-exports and fraudulent documents; to establish a compliant Apparel Clause implementation and certification procedures, or is making significant progress in this regard; agreed to cooperate with U.S. Customs, and to fully assist U.S. Customs in confirming the origin of products. Requirements for country-specific visa regimes and certification procedures are set forth by the U.S. embassies in those countries on a case-by-case basis. Currently, there are 19 eligible countries to become beneficiaries of the apparel provisions of the Act.
3. (1) with the United States does not produce yarn and fabrics and other raw materials processing and production of clothing; (2) with the United States production of yarn and fabrics and other raw materials processing and production of clothing; (3) to merino wool and cashmere as the raw material for the sweater; (4) to silk, velvet, linen and other U.S. does not have a commercial production of raw materials such as clothing, etc., to enter the U.S. market, free of tariffs, free of quotas.
4. The first phase of the Act provides that the local production of black African yarns and fabrics as raw materials for the processing of apparel can be conditionally entitled to duty-free, quota-free treatment, that is, duty-free, quota-free access to the U.S. market for the number of not more than 1.5% of the U.S. total apparel imports of the year, and in eight years this proportion will gradually increase to 3.5%, the limit outside of the use of the Most Favored Nation (MFN) tariffs still in the mouth.
And the second phase of the bill will be the above ratio increased by a factor of 1, that is, by 2008, black African countries in accordance with the duty-free, quota-free exports of apparel to the United States accounted for the proportion of total U.S. apparel imports of the upper limit of 3.5% to 7%, black African countries in the U.S. apparel exports from the annual growth rate of 1.5% rose to 3%.
5. Special policies for less developed beneficiary countries: for less developed countries with per capita national income of less than $1500 in 1998, their production of clothing regardless of the origin of raw materials, i.e., the use of raw materials produced by any country's apparel exports to the United States, can be enjoyed by September 30, 2004 tariff-free, quota-free treatment, with the same upper limit on the number of the above Article IV. At present, 32 Black African countries meet this condition, i.e., 6 out of the original 38 beneficiary countries have been removed, i.e., Botswana, Namibia, Gabon, Mauritius, Seychelles and South Africa. If these 32 countries could meet the other requirements of the clothing clause, they would be able to benefit from the "special policy", but in fact, Botswana and Namibia are exceptionally exempt from the clause.
6. The U.S. Secretary of Commerce will monitor apparel imports on a monthly basis to prevent them from getting out of hand. If imports seriously affect or threaten the U.S. apparel industry, the President may order the suspension of preferential market access for a particular product.
7. "Act" on textiles and clothing rules of origin in accordance with the product must be in the beneficiary country "growth, production or manufacture" principle, generally require local customs certificate of origin, and supervision and implementation is very strict. Currently, Kenya, Botswana and Mauritius have joined the bill to enter the U.S. market visa system without examination.
The implementation and role of the Act
Africa is the world's poorest and most backward continent, especially in black Africa. Until now, Africa has been under-recognized politically and economically, with African exports to the United States accounting for only 2 percent of all U.S. imports in 2002. The Act provides Africa with an opportunity to compete with Asian countries, where products are cheap, and with Mexico and the Caribbean, where they are strategically located.
Three years after the implementation of the Act, Black African countries have generally benefited from the Act, albeit to varying degrees. Apparel imports from Black African countries now account for 1.5 percent of total U.S. apparel imports. Lesotho's exports to the U.S. have grown seven-fold, replacing Mauritius as Africa's top exporter of apparel to the U.S.; Madagascar's apparel exports have also grown at a rapid rate, doubling for two consecutive years; Kenya's exports to the U.S. grew by 119.5% in 2002, creating 50,000 jobs; South Africa, which has Africa's most developed yarn and textile industry, saw apparel exports to the U.S. increase by 174% in 2002; and South Africa, with the most advanced yarn and textile industry in Africa, saw apparel imports to the U.S. grow by 174% in 2002. 174%, in addition, South Africa through the development of manufacturing (mainly to the United States automobile exports), employment increased by 90,000 people.
But it must be seen, in trade with the United States, black African countries to the United States dependence on the United States is far greater than the United States on Africa. The United States is Africa's largest single country market, theoretically, the Act involves products although there are 6 then more than one, but the implementation of only textiles and clothing, petroleum, minerals (diamonds, lead), automobiles and so on a few kinds, the most important of which is textiles and clothing.
1. Africa is rich in resources, especially in recent years, some countries have discovered oil, so that the United States of America's concern for black Africa has increased. African crude oil has accounted for 18% of the total value of U.S. crude oil imports, Nigeria, Angola, the United States of America's fifth and eighth largest supplier of crude oil. The rise in the status of oil supply from Black Africa will enable the United States to reduce its dependence on oil from the Middle East, which is of great strategic significance to the United States. The use of the Act to ensure the export of resources from Black Africa to the United States, it makes sense.
2. The bill also plays a flexible adjustment of the United States and black Africa trade and investment strategy, promote the United States to black Africa exports and investment role. Black Africa is the world's last large undeveloped market, for a long time, black African countries and their former sovereign states in Europe, close relations, economic and trade rely on Europe, the United States as a latecomer to seize the black African market, the Act is a handy tool.
3. The Act is a non-reciprocal agreement, but it is not only in favor of African countries, but also in favor of the United States itself. First of all, the products listed in the Act are basically those that the United States needs to import, and it is in the interest of the American consumer to diversify and expand their sources of products. Moreover, since it is currently difficult to find high-quality African fabrics and yarns, African textile and garment manufacturers will probably have to turn to the United States to buy the raw materials they need for their own production. U.S. companies may find new opportunities in this, or reach a tacit agreement with African companies and cooperate on some infrastructure projects.
4. Taking control of Black Africa's development. The preferential terms and conditions of the Act are by no means free, the United States has attached a lot of conditions, some of which have nothing to do with economic and trade requirements, such as the beneficiary countries to implement multi-party democracy, liberalization of the economy, privatization and anti-corruption, and so on.
5. The role of the Act in promoting Black African exports to the United States is mainly reflected in resource commodities such as oil. As the textile industry, which is the sunset industry of the United States, the provisions of the Act are very harsh and cumbersome validation procedures, and it is difficult for the vast majority of black African countries to really enjoy the preferential conditions granted by the Act. In addition, the GSP granted by the Act to eligible countries only until September 30, 2008, and the current production and export capacity of black African countries is extremely limited, so even if the products are tariff-free and quota-free, it is difficult to imagine that before the deadline, the products of black African countries will hit the U.S. market and threaten the U.S. domestic industry. On the contrary, the United States through the Act requires the opening of market conditions, and gradually expand exports to black Africa, optimize the commodity structure, seize the black African market.
China's enterprises how to utilize the Act
China is the world's largest textile and garment producer and exporter, and the potential of the textile and garment industry in Black Africa has not yet been fully developed, and the two sides to carry out cooperation has a broad prospect. Investment in Africa to build textile and garment factories, not only in line with the optimization and adjustment of China's industrial structure, to promote the export policy requirements, but also if the investment in Africa is successful, the rate of return on investment is also very substantial.
1. Make full use of the Southeast Africa **** the same market, East Africa **** the same body, the Southern African Customs Union and other preferential conditions of the free trade area, to develop a broader market space in Africa.
2. Make full use of the traditional cooperative relations between African countries and the European Union, especially with its former sovereign countries, to develop the European market.
3. The basic conditions for choosing textile and garment investment countries in Black Africa are: political stability, better infrastructure, foreign investment policy and legal environment, convenient transportation, raw materials or convenient raw material imports, with a certain level of technology, low labor costs. In view of this, Kenya, Namibia, Madagascar, Lesotho, South Africa, Nigeria and Ethiopia can be prioritized as seven countries.
4. African countries cotton yarn and fabrics in general, a large gap, every year a large number of imports are required, should be the focus of encouraging investment.
5. Because of the different situations in black African countries, the risk is not the same, can be flexible to use direct investment to set up factories, joint ventures and joint ventures, technical cooperation, leasing, shares, technological transformation, hosting and other forms of investment.
6. With the implementation of the Act, African countries will take full advantage of the Act's preferential conditions, the development of relevant supporting policies, vigorously develop their textile and apparel industry, expanding exports to the United States. But because most countries in Africa textile industry foundation is weak, obsolete facilities, lack of professional and technical personnel, unable to keep up with the trend of the international textile and clothing market, it will have a large number of experienced Chinese technicians in demand, but also imported China's inexpensive textile and clothing equipment. This will provide a good opportunity for our country to expand the export of labor and complete sets of equipment to Africa.
Some problems
1. African countries investment environment is relatively general: (1) infrastructure. In addition to South Africa, Mauritius, Namibia and a few other countries, most of the African countries, water, electricity, transportation, communications and other infrastructure are not perfect. (2) Foreign exchange risk. Exchange rate fluctuations and foreign exchange control are the two most important problems. (3) Social security problems. Due to the wide gap between the rich and the poor in African countries, high unemployment rate, limited police force and its equipment, and even the existence of corruption, resulting in high crime rate in African countries. (4) Work visa problem. African countries have high unemployment rates, and all countries strictly control the long-term residence and employment of foreigners, and restrict the issuance of work visas, with harsh conditions and complicated procedures. (5) Labor problems. Black employees have low labor skills and poor labor motivation, but the wage level is not low, which affects the productivity of enterprises. African countries have detailed labor laws to protect their workers, and strict enforcement. In addition, African trade unions are usually powerful and well-organized, often organizing strikes and demanding higher wages, and there are more labor disputes.
2. Due to the harsh provisions of the textile and apparel bill, and has a certain degree of timeliness, in the short term seems to be more suitable for the hands of the domestic enterprises have orders, customers. And from now on to the bill's deadline, China's enterprises have little time, it is necessary to seize the opportunity to take practical action. 3. To prevent illegal re-export issues. The U.S. has been paying great attention to the problem of illegal re-exports, and the supervision and inspection are very strict. 4. After 2005, the United States will cancel the quota restriction on textile products to China, and the Multi-Fiber Agreement will also be terminated in January 2005, the textile and garment industry in African countries are facing the same China, India, Vietnam and other countries of the same kind of products of the fierce competition, due to the two sides of the technology, equipment, labor proficiency, sales and other aspects of the gap, Africa is afraid that it is difficult to enjoy the benefits of the policy, which hinders the enthusiasm of the expansion of textile production in African countries. Countries to expand textile production enthusiasm.