See figure 1. After AGOA was implemented, there was an initial surge of U.S.  textile and apparel imports from beneficiary countries. Expert Panel’s Options for Congressional Consideration of Possible Changes to AGOA or Other Trade Preference Programs

Based on our review of the ITC study and other related research, and in  consultation with trade and industry experts, we identified four issue  areas where possible changes to AGOA or other U.S. trade preference  programs could be made to improve the competitiveness of the textile and  apparel inputs sector in SSA beneficiary countries. Issues Related to Extending the Duration of AGOA Provisions and Making AGOA Permanent

The options considered under this issue area were to:    Extend the duration of the third-country fabric provision for LDCs beyond  2012 to provide potential investors with greater long-term certainty about  the program’s benefits. Countries many benefits through increased regional sourcing and integration. Align U.S. TCB and development assistance with AGOA to ensure that addresses the competitive challenges and industries, such as the textile and apparel inputs industry. Conclusion

This report is intended to provide Congress a range of options put forward  by experts on ways to improve the competitiveness of SSA textile and  apparel production so that AGOA beneficiary countries can better take  advantage of the opportunities provided under the program. Many of these options may b helpful, but as GAO has previously reported,  trade-offs are inherent in  trade preference programs. Furthermore, the link between trade policy and economic  development complicates potential policy responses. AGOA h benefits for textile and apparel, but many SSA countries face  infrastructure and development challenges that must be addresse they can fully take advantage of these benefits. GAO staff who made major contributions to this report are  listed in appendix V.

Appendix I: Scope and Methodology

In this report, we present information on options put forward by experts  for Congress to consider for (1) possible changes to the African Growth  and Opportunity Act (AGOA) or other U.S. trade preference programs and  (2) other measures the U.S. government could take to help increase  investment in and improve competitiveness of textile and apparel inputs  production in sub-Saharan Africa (SSA). Additionally, we convened a panel of experts and key informants on June  2, 2009. The panel discussed three topics: (1) the ITC’s analysis of potentially  competitive products and challenges for the textile and apparel industry in  SSA, (2) possible changes to AGOA or other U.S. trade preference  programs, and (3) other measures to support African textile and apparel  inputs production.
Why GAO Did This Study

According to U.S. government officials, sub-Saharan Africa's (SSA) textile and apparel industry has not achieved the growth anticipated under the African Growth and Opportunity Act (AGOA). Despite the tariff reductions under AGOA, after an initial surge, U.S. imports of these products from beneficiary countries have declined in recent years (see figure). In view of this outcome, the 2008 Andean Trade Preference Extension legislation required GAO to prepare a report identifying changes to U.S. trade preference programs "to provide incentives to increase investment and other measures necessary to improve the competitiveness of [SSA] beneficiary countries in the production of yarns, fabric, and other textile and apparel inputs." This report is intended to provide Congress a range of options put forward by experts for (1) possible changes to AGOA or other U.S. trade preference programs and (2) other measures the U.S. government could take to help increase investment in and improve competitiveness of SSA textile and apparel inputs production.

What GAO Found

Many of the options discussed by the panel of experts GAO convened address the need to consider the trade-offs inherent in trade preference programs. Furthermore, experts emphasized that the link between trade policy and economic development complicates potential policy responses. While AGOA has generous benefits for textile and apparel, many SSA countries face infrastructure and development challenges that must be addressed before they can fully take advantage of these benefits. Recognizing this interplay, GAO's panel of experts and key informants gave greatest priority to options they believed provide long-term investors with predictability of benefits and encourage regional commitments relative to other developing countries. Such options included: (1) Extending the duration of the third-country fabric provision for least developed AGOA countries beyond 2012, and (2) Extending the duration of overall AGOA benefits beyond 2015. The panel similarly gave greatest priority to the options for other development measures that focused on supporting investment through trade capacity building. Many experts considered trade capacity building to be a key component of improving the competitiveness of African textile and apparel inputs production, and in developing the physical and market infrastructure needed for a vibrant export sector. Such options included: (1) Funding regional trade hubs and focusing on market promotion and business linkages, and (2) Aligning U.S. trade capacity building and development assistance with AGOA objectives