The report found that AGOA’s impact on foreign direct investment (FDI) has been strongest in the apparel industry.
Although it is difficult to quantify AGOA’s direct and indirect effects on FDI trends, the program’s trade benefits and eligibility criteria appear to have motivated SSA countries, particularly AGOA beneficiary countries, to improve their business and investment climates. Moreover, AGOA has had a positive impact on FDI inflows, particularly in the textile and apparel sector in Kenya, Lesotho, Mauritius, Swaziland, and Botswana, and also in South Africa’s automotive industry. However, observers have noted that the uncertainties associated with the short-term renewals of the program, and the changing eligibility of particular AGOA beneficiary countries, have limited AGOA’s impact in attracting new investment to SSA.
The largest categories of U.S. apparel imports under AGOA in 2013 were “bottoms,” including men’s trousers. Roughly two-thirds of total U.S. apparel imports under AGOA were cotton products. Lesotho, Kenya, Mauritius, and Swaziland accounted for the vast majority of all U.S. imports under AGOA in 2013. The NTR rates of duty for these goods range from 2.6 to 32 percent ad valorem.