ITC Reports on U.S. Trade and Investment with Sub-Saharan Africa

On May 1, 2020, the U.S. International Trade Commission ("USITC") released U.S. Trade and Investment with Sub-Saharan Africa: Recent Developments (Publication 5043 Inv. No. 332-571).

U.S. imports for consumption of apparel from SSA under AGOA grew at 9.9 percent between 2016 and 2018. Within SSA, five countries:

1. Kenya,
2. Lesotho,
3. Madagascar,
4. Mauritius, and
5. Ethiopia

accounted for almost 95 percent of all apparel imported from the region under AGOA. Notably, imports from Ethiopia had an increase of 76.5 percent between 2016 and 2018, reflecting an increase in exports to the United States from $37 million to $114 million. This growth was primarily due to the country’s focus on increasing garment production in industrial parks and its increased use of AGOA benefits. The largest categories of U.S. apparel imports from SSA in 2018 were men's or boys' cotton trousers and shorts, and men's or boys' knit shirts of manmade fiber ($225 million and $205 million, respectively)

In examining factors that may have affected the rise in apparel exports from SSA to the United States, the report states:

• Some multinational firms are looking for new sourcing options due to a rising emphasis on corporate social responsibility (CSR) in many countries.
• Regional integration efforts among SSA countries could also be contributing to the increase. For example, the African Continental Free Trade Area intends to remove duties on goods shipped within the continent to develop regional value chains and strengthen manufacturing capacities in SSA.
• According to the 2019 Fashion Industry Benchmarking Study, 83 percent of survey respondents expect to decrease sourcing from China over the next two years, up from 67 percent for the same question in 2018. However, the same survey found that only 28 percent of respondents were sourcing from SSA, a nearly 6 percent decline from 2016. Almost half of the respondents attributed their hesitancy about investing in the region to the temporary nature of AGOA. Moreover, long lead times, lack of infrastructure, and high logistical costs continue to deter apparel retailers from investing in the AGOA region.