With James Muyanwa
LAST week we looked at the products which are eligible for export by African countries, including Zambia, to the United States of America under the Africa Growth and Opportunity Act (AGOA).
This week I want to go deeper and look at other issues related to the eligibility of the products.
Given the extensive coverage of AGOA issues by this and various other media houses, as a lead-up to Zambia’s hosting of this year’s forum in June, I can be forgive for assuming that every reader now knows what AGOA is generally all about.
I can be forgiven for supposing that every follower of this column knows that AGOA accords duty-free treatment to virtually all products exported by beneficiary African countries to the United States (US).
I can further be forgiven for deducing that every one knows that AGOA provides beneficiary countries with the most liberal access to the US market accorded to any country that has not negotiated a free trade agreement with US.
AGOA alone adds about 1,800 tariff line items to the 4,600 items already enjoying duty-free status under the Generalized System of Preferences (GSP) arrangement and I identified some of the individual products, particularly those relevant to Zambia, last week.
Today, however, we focus on the specific requirements concerning products to be exported by Zambia under AGOA.
According to Competitiveness and Trade Expansion Program (Compete), to qualify for the arrangement, the products in question should have been deemed eligible for AGOA benefits by the US government.
The USAID –funded Compete is a regional program that is working to improve trade in East and Central Africa by harmonizing regional trade and transit policies.
Then it should be proved further that the product was actually grown, produced or manufactured by a beneficiary country, in this case, Zambia.
The product, which should further be exported directly to the US, should also meet the specific rule of origin requirements, and should be accompanied by import documentation that claims AGOA benefits on the relevant shipping papers.
Additionally, there are requirements for specific types of products, like the case of apparel products where the beneficiary country should adopt a US government-approved visa system and domestic laws.
Proof should be shown for enforcement measures to prevent illegal transhipment of the apparel and use of bogus documents.
For agricultural products, Zambian exporters should comply with regulations established by the US Agriculture Department to protect the health of the American public.
Beneficiary countries exporting agricultural products to the US will have to provide the US food and drug administration with advance notice of each shipment entering the US.
A word on the rules of origin! With respect to non-apparel products, the product should have been grown, produced or manufactured by Zambia and the country should provide at least 35 per cent value added in the course of the production process. Up to 15 per cent of that 35 per cent may be derived from US parts or materials used to produce the product.
The rules of origin regarding apparel products vary with the product.
As noted already, beneficiary countries should establish effective visa systems and institute enforcement and authentication procedures before any of their apparel exports to the US can receive AGOA benefits.
May I state that an effective visa system is a government-private sector process that exhibits that the items for which AGOA benefits are claimed were actually produced in a beneficiary country according to the rules of origin!
AGOA extends duty-free and quota-free treatment to SSA apparel made from US yarn and fabric as well as knit-to-shape sweaters made from some merino wools. Others are apparel products made from yarns and fabrics not produced in commercial quantities in the US.
AGOA benefits are also extended to SSA apparel made from regional fabric and yarn but such products are subject to an annual restriction by the US.
Generally, Zambian producers and exporters wanting to penetrate the US market under AGOA would do well to familiarise themselves with regulations and network with others for maximum economies of scale.
Feedback
During the week, I continued receiving calls from readers from different parts of the country requesting for information on AGOA and the sponsors of this column Kanzam International. I will, however, not delve into that but advise our readers to go to www.kanzamint.com to learn more about Kanzam International Inc. Meanwhile full columns will be dedicated to look at issues being raised.
For now, continue thinking of ways of maximising the benefits of AGOA and kindly send your contributions to: jmuyanwa@gmail.com, call: 021(0955) 431442 or AGOA@kanzamint.com or call +1(214) 245-4371
Ends…
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