Madagascar May Lose Its AGOA Benefits During USTR's Annual Review
During the U.S. Trade Representative's annual review of the eligibility of sub-Saharan African (SSA) countries to receive the benefits of the African Growth and Opportunity Act (AGOA), Madagascar may be determined ineligible, due to a recent political event in that country.
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Event Considered Coup D'Etat, U.S. to Suspend All Non-Humanitarian Assistance
On March 20, 2009, the State Department issued a press release stating that the process through which Marc Ravalomanana was forced to resign as President of the Republic of Madagascar and Andry Rajoelina subsequently was installed as the de facto head of state was contrary to the rule of law and tantamount to a coup d'tat.
The State Department announced that in light of these events, the U.S. will not maintain its current assistance partnership with Madagascar and is moving to suspend all non-humanitarian assistance to Madagascar.
USTR to Review Madagascar's AGOA Eligibility with Others in Sept 2009 Review
According to State Department and USTR sources, Madagascar's AGOA eligibility will not be automatically suspended. Instead, its eligibility will be reconsidered as part of USTR's annual review of AGOA eligibility for all sub-Saharan African countries, including Madagascar, which will take place in September. Based on its review, USTR will make recommendations to the President who will make the final determinations.
Note that one of eligibility requirements for AGOA is "the rule of law, political pluralism, and the right to due process, a fair trial, and equal protection under the law."
If No Progress Has Been Made, AGOA Benefits Could be Revoked Jan 1, 2010
State Department sources state that while a decision has not yet been made, if no progress has been made in Madagascar by the end of USTR's review, its AGOA benefits may be revoked. Decisions for continued AGOA eligibility or ineligibility will be effective on January 1, 2010.
Madagascar's Benefits Under AGOA
AGOA beneficiary SSA countries, such as Madagascar, receive both standard duty-free benefits under the Generalized System of Preferences (GSP) program and AGOA-GSP duty-free benefits for additional products.
Textile/apparel AGOA benefits. Furthermore, certain AGOA beneficiaries, including Madagascar, receive AGOA textile and apparel benefits if the USTR has determined that such countries are establishing or have established certain procedures regarding the prevention of illegal textile and apparel transshipments.
Madagascar is a significant beneficiary of such AGOA textile and apparel benefits.
According to data from the Office of Textiles and Apparel (OTEXA), for the year ending March 2009, Madagascar's total textile and apparel imports under AGOA was 75.389 million square meters equivalent (SMEs), second only to Lesotho, whose total textile and apparel imports under AGOA was 85.164 million SMEs.
(See ITT's Online Archives or 09/26/08 news, 08092650, for BP summary of USTR's request for comments on its 2008 annual AGOA eligibility review.)
State Dept. press release (dated 03/20/09) available at http://www.state.gov/r/pa/prs/ps/2009/03/120714.htm
OTEXA trade data available at http://otexa.ita.doc.gov/agoa-cbtpa/cat0.htm