South Africa declines clothing and textile agreement with EU

Citing unreasonable demands by the European Union (EU), South Africa and Namibia pulled out of an economic partnership agreement that would have eased the movement of clothing and textile products into European markets. The existing African Growth and Opportunities Act (AGOA), under which African countries enjoy preferential access to U.S. markets, requires a product to be of local origin or involve local value during production when imported materials are used. U.S. policy makers amend the AGOA at will, whereas the new EU agreement would be less flexible about trade in European markets.

The new EU agreement also has a stipulation allowing companies with cross-border operations in the region to jointly comply with the local origin requirement to benefit from lowered tariffs. Since South Africa didn’t sign, its cross-border companies can’t acquire this benefit. The embattled South African clothing and textile industry was “very disappointed,” according to Jack Kipling, chairman of the Export Council for the Clothing Industry in South Africa, and the exodus of manufacturers to countries included in the agreement is a projected consequence.