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Article
Publication date: 9 June 2020

Aruneema Mahabir, Jingwen Fan and Robert Mullings

At the heart of the African Growth and Opportunity Act (AGOA) are substantial trade preferences, which coupled with the Generalised System of Preferences (GSP) grant a…

Abstract

Purpose

At the heart of the African Growth and Opportunity Act (AGOA) are substantial trade preferences, which coupled with the Generalised System of Preferences (GSP) grant a wide range of goods produced in qualified African countries duty-free access to the USA. To be AGOA-eligible, countries are assessed annually on their progress in undertaking appropriate economic, institutional and human rights reforms. This paper seeks to cover new grounds by exploring whether exports of apparel to US crowds out EU-15's imports from Africa.

Design/methodology/approach

This paper employs the gravity model to gauge trade displacement effects from the EU to the US due to AGOA, and whether the more relaxed special waiver embodied in AGOA's apparel provision causes non-knitted exports to EU-15 to be crowded out. The basic gravity model, which posits that trade between two countries is positively influenced by the economic size and negatively affected by the distance between them, is augmented with other trade inhibiting and trade facilitating variables.

Findings

The gravity model provides no evidence of trade displacement but, instead, provides support for the hypothesis of complementarity of African exports to the two key markets. A strong positive impact of the bilateral trade between the US and Africa on the EU–African trade is evident mainly before the phasing out of the Agreement on Textiles and Clothing (ATC). This paper finds that Special Rule beneficiaries' exports to the two markets still complement each other, but for every percentage increase in exports to the USA, there is a less than proportionate increase in exports to EU-15 indicating a higher utilisation of the special waiver. This paper also provides evidence for complementary apparel exports to both LDCs (least developing countries) and non-LDCs, with stronger effects on non-LDCs and the non-knitted sector.

Research limitations/implications

Future work could consider the longer lifespan of AGOA following its latest renewal in 2015. This would allow one to also capture the ongoing changes in EU trade arrangements in particular implementation of Economic Partnership Agreements (EPAs). This new agreement comes with more flexible rules of origin requiring single transformation step instead of the double step. As most African nations are still in the process of adopting EPAs, new research can shed more light on complementary or displacement effects once these agreements are adopted.

Originality/value

Since the main intent of AGOA is to enhance Africa's integration into the global economy by encouraging trade and investment, generate employment and increase productivity and per capita income growth, its impact on Special Rule beneficiaries' exports to the US has been extensively examined. However, the indirect effects of this trade agreement on African exports to other key markets providing similar preferences such as the EU has not been fully explored. This study also covers new grounds by examining whether there has been any apparel trade displacement from the EU to the US, as a result of the Act, over 2001–2016 period right from AGOA's inception.

Details

Journal of Economic Studies, vol. 47 no. 5
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 6 November 2007

Belay Seyoum

The purpose of this study is to assess the implications of US trade preferences under the African Growth and Opportunity Act (AGOA) and its impact on beneficiary country exports.

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2373

Abstract

Purpose

The purpose of this study is to assess the implications of US trade preferences under the African Growth and Opportunity Act (AGOA) and its impact on beneficiary country exports.

Design/methodology/approach

The approach is to use Wilcoxon signed rank test and time series regression analysis using ARIMA.

Findings

The results largely indicate that AGOA has a positive but not significant effect on beneficiary exports to the USA for all country groups. Its effect is also quite marginal on sectoral exports except for textiles and apparel. Similarly, AGOA's effect is positive but not significant for all major exporters except Lesotho.

Originality/value

A proper understanding of this relationship will help donors and recipients devise appropriate policies to help encourage the growth and diversification of exports that is so vital for developing countries.

Details

Journal of Economic Studies, vol. 34 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 11 October 2018

Regis Simo

The purpose of this paper is to show how the pattern of trade relations between the USA and African countries is gradually shifting toward reciprocity. It therefore…

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1017

Abstract

Purpose

The purpose of this paper is to show how the pattern of trade relations between the USA and African countries is gradually shifting toward reciprocity. It therefore demonstrates that the African Growth and Opportunity Act (AGOA) was conceived to be a building block toward future bilateral trade agreements.

Design/methodology/approach

This paper adopts a historical approach to the USA’s policy toward Africa in general and in trade matters in particular. It critically reviews the chronology of US involvement in the continent.

Findings

Although it was designed as a preferential trade arrangement, AGOA was intended to evolve into reciprocal trade agreements. This is what the USA started doing even prior to the entry into force of the AGOA, by entering into Trade and Investment Framework Agreements with individual countries or blocs. It also transpires that the deployment comes as a response to the European Union which is already engaged in the redefinition of its own trade relations with Africa since 2004.

Originality/value

The paper is important in many respects. Not only it is a study of the US practice as preference-granting country, but it is also interested in the typology of trade agreements concluded by the USA in other regions of the world. This is important to indicate and analyze the types of provisions African countries should be expected to face when the time of entering into reciprocal binding trade treaties arrives.

Details

Journal of International Trade Law and Policy, vol. 17 no. 3
Type: Research Article
ISSN: 1477-0024

Keywords

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Expert briefing
Publication date: 12 December 2019

Outlook for the African Growth and Opportunity Act.

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Expert briefing
Publication date: 16 March 2015

The African Growth and Opportunity Act.

Details

DOI: 10.1108/OXAN-DB198309

ISSN: 2633-304X

Keywords

Geographic
Topical
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Article
Publication date: 11 September 2017

Ruth Dede Adikorley, Kristin Thoney-Barletta, Jeff Joines and Lori Rothenberg

The purpose of this study is to examine why Sub-Saharan Africa (SSA) is not currently a major player in producing apparel for the US market and determine if SSA is likely…

Abstract

Purpose

The purpose of this study is to examine why Sub-Saharan Africa (SSA) is not currently a major player in producing apparel for the US market and determine if SSA is likely to become one because of several opportunities that the region offers, including relatively low labor wages, an ample labor force and duty-free access to the USA through the 10-year renewal of AGOA.

Design/methodology/approach

In-depth interviews were conducted with eight high-level executives in apparel sourcing and trade agencies to obtain their views on the opportunities and challenges of sourcing in SSA in relation to other major apparel sourcing regions. A descriptive analysis of the qualitative data was used to answer three research questions.

Findings

The findings reveal that SSA is a competitive region to source from, because of low labor wages and the duty-free benefits through AGOA. However, several challenges hinder a significant increase in sourcing from SSA. The executives recommended that for SSA to be a significant force in the global apparel market, vertical supply chains should be developed, where raw materials like fabric are sourced from within the country/region and SSA governments should become more involved in business environment improvements.

Originality/value

At present, there is limited academic literature on sourcing and supplier selection in Africa, particularly in textile and apparel sourcing in SSA. Based on interviews from high-level executives engaged in the sourcing decision-making process, this study reveals the benefits, challenges and opportunities for sourcing apparel from SSA countries.

Details

Research Journal of Textile and Apparel, vol. 21 no. 3
Type: Research Article
ISSN: 1560-6074

Keywords

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Article
Publication date: 4 April 2019

Sanusi Bintang, Mujibussalim Mujibussalim and Fikri Fikri

The purpose of this study is to explain the need for the implementation of decentralization of Indonesia social health insurance (INA-Medicare), with particular emphasis…

Abstract

Purpose

The purpose of this study is to explain the need for the implementation of decentralization of Indonesia social health insurance (INA-Medicare), with particular emphasis for Aceh Province. First, it discusses the inconsistency of Act on National Social Security System (ANSSS) to the 1945 Constitution, because certain rules in ANSSS are contrary to the 1945 Constitution. This weakens the practice of broader regional autonomy, lessens the importance of public service quality in health care and ignores specific cultural and religious values of the regional people. Then, it explains provisions on central and regional government authority in the 1945 Constitution, Act on Regional Autonomy and Act on Governing of Aceh. Later, it explores current law and practice of INA-Medicare under the national social security system and the centralized administering body. Finally, it provides reasons for decentralization of INA-Medicare, as the solution.

Design/methodology/approach

This study uses doctrinal legal research. It relies on both primary and secondary legal authorities. In additions, it also uses sociolegal research by relying on non-legal materials, including empirical data from books, journals and newspapers. Analysis of legal authorities is by legal reasoning process, whereas analysis of non-legal materials is by qualitative approach.

Findings

This study argues that the decentralization of INA-Medicare is more suitable for Aceh Province because of several reasons, including implementing broader regional autonomy, improving public service quality in health care and implementing the principle of sharia social health insurance.

Originality/value

The study is original because it focuses on a specific regional area of Aceh Province, Indonesia. It concentrates on specific legal issues and provides unique reasons for argumentation. Therefore, it provides important specific information for journal readers.

Details

International Journal of Law and Management, vol. 61 no. 2
Type: Research Article
ISSN: 1754-243X

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Article
Publication date: 24 July 2020

Ismail W.R. Taifa and Gervaz G. Lushaju

Garment making by the small and medium-sized enterprises (SMEs) has existed for a long enough time to make the sewing culture a mainstream phenomenon today. It is thus…

Abstract

Purpose

Garment making by the small and medium-sized enterprises (SMEs) has existed for a long enough time to make the sewing culture a mainstream phenomenon today. It is thus essential to evaluate existing producers, the required information and the key requirements for production. This should consequently forge the way forward. Hence, the purpose of this study was to establish guidelines for the basic requirements as a means of operating garment mass production units in consideration of the unique economic, legal and social environment in Tanzania.

Design/methodology/approach

The study deployed a qualitative approach: interview sessions, questionnaires and observation together with the document review approach. A qualitative approach captured in-depth views, ideas and concepts from participants.

Findings

The study established the requirements for scaling up SMEs into mass production. The requirements include significant investment, well-planned strategies and an implementable industrialisation plan. The country also requires empowered workforces through the existing institutions, international collaborations with foreign investors, implementable policies, among others to excel in this sector.

Research limitations/implications

The identified information together with all factors is leading towards initiating textile-based industries. Thus, information resources concerning garment production in the Tanzanian context are suitable for both individuals and corporations intending to scale up their production.

Originality/value

This is probably among the first studies in Tanzania which explored the basic requirements for setting mass-production units for textile and apparel industries. The uniqueness relies on the involved participants from multi-perspective domains.

Details

Research Journal of Textile and Apparel, vol. 24 no. 4
Type: Research Article
ISSN: 1560-6074

Keywords

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Expert briefing
Publication date: 27 February 2020

Implications of US-Kenya trade talks.

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Executive summary
Publication date: 21 April 2015

SOUTH AFRICA: Negotiators likely to toe US line on AG

Details

DOI: 10.1108/OXAN-ES199094

ISSN: 2633-304X

Keywords

Geographic
Topical
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