Madagascar Warned to Make Changes by Dec 15th or Risk its AGOA Status
On December 10, 2009, the State Department issued a statement urging the Malagasy political leadership to take concrete steps toward reestablishing a constitutional democratic government and the rule of law in Madagascar.
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According to the State Department, the March 2009 undemocratic transfer of power and the inability to establish a return to democracy have violated one of the vital criteria for Madagascar's continued eligibility for African Growth and Opportunity Act (AGOA) trade preferences.
The steps the U.S. urges Madagascar to take include (i) the announcement of the full Transitional Government Cabinet; establishment of a National Reconciliation Council; (ii) clear progress toward establishing an Independent Electoral Commission; and (iii) setting an election deadline with an update of those election plans for the international community.
The State Department warns that failure to achieve the benchmarks outlined above by December 15, 2009 would seriously threaten Madagascar's continued eligibility for AGOA's trade benefits in 2010. The statement further warns that additional delay in meeting these benchmarks will undermine Madagascar's credibility and its prospects for continued eligibility for AGOA benefits.
State Department and U.S. Trade Representative sources stated in June 2009 that Madagascar's AGOA eligibility would not be automatically suspended, but that its eligibility would be reconsidered as part of USTR's annual review of AGOA eligibility for all sub-Saharan African countries. Based on its annual review, USTR will make recommendations to the President who will make the final determinations.
State Department sources have also previously stated that 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.
(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. 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 October 2009, Madagascar's total textile and apparel imports under AGOA was 70.4 million square meters equivalent (SMEs), second only to Lesotho, whose total textile and apparel imports under AGOA was 76.9 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.
See ITT's Online Archives or 06/04/09 news, 09060405, for BP summary of notice announcing that Madagascar could lose its AGOA benefits during the USTR's annual AGOA review.)
State Department statement, dated 12/10/09, available at http://www.state.gov/r/pa/prs/ps/2009/dec/133436.htm.