· Ethiopia’s textile industry is worried as the US contemplates suspension of Ethiopia’s duty-free market status, based on allegations of abuses and a growing famine in the war-ravaged northern Tigray region.
· The US has repeatedly marked its concern over war crimes in Tigray including sexual violence and killing of civilians.
Ethiopia’s textile industry is worried as the US contemplates suspension of Ethiopia’s duty-free market status, based on allegations of abuses and a growing famine in the war-ravaged northern Tigray region. The US has repeatedly marked its concern over war crimes in Tigray including sexual violence and the killing of civilians. According to The United Nations, the blockade of aid has forced 400,000 people into famine.
The suspension of benefits under the African Growth and Opportunity Act (AGOA) would undermine Ethiopia’s ambition to become a manufacturing hub and also the economic gains during the last few years. The cancellations of orders are likely to result in layoffs and closure of businesses.
The move will also affect global fashion brands such as The Children’s Place, Tommy Hilfiger and Calvin Klein that are just recovering from COVID 19 disruption of business. During the last decade, Ethiopia has invested billions to construct a dozen industrial parks and related infrastructure. Some of them produce goods for fashion giants like Calvin Klein, Speedo and Tommy Hilfiger labels.
A decision from the chief trade representative on its AGOA status is expected soon. The act gives sub-Saharan African nation’s duty-free access to the United States subject to certain conditions. According to political analysts, AGOA had directly created 200,000 jobs and indirectly created millions. Data from the U.S. commerce department shows that Ethiopia exported about $237 million worth of goods duty-free to the United States under AGOA in 2020. Textiles and apparel accounted for more than 90% of the exports.
