THE EXPORT STATUS OF ETHIOPIAN TEXTILE AND GARMENT SECTOR POST AFRICAN GROWTH AND OPPORTUNITY ACT BANNING: AN APPRAISAL OF CHALLENGES AND OPPORTUNITIES

Author Name: Tesfaye Boresa Senbeta

Volume/Issue: 03/09

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DOI NO.: 08.2020-25662434 DOI Link: https://www.doi-ds.org/doilink/03.2023-71787969/UIJIR

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ABSTRACT

The African Growth and Opportunities Act (here after AGOA) is a United States unilateral trade arrangement enacted in 2000 to provide preferential trade benefits to Sub-Saharan African countries. Its objective is to increase trade and investment between the U.S. and eligible members of the Act by zero rate tariffs to their export their products. Ethiopia has become eligible to AGOA, one year after the enactment of the act as 18th member countries. The country has been among the top beneficiaries of the program and actively leveraged AGOA to attract foreign investment and expand its manufacturing export drive via the development of special industrial parks. However, Biden administration has suspended Ethiopia suspension from AGOA in January 2021 alleging for human right violations.Thus, this paper examines the challenges of Ethiopian textile and garment sector post the AGOA banning. It also discusses the potential opportunities that Ethiopia can utilize to compensate the losses and consequential impacts of banning Ethiopia from AGOA. The writer has employed both qualitative and quantitative data to triangulate the sources. The findings show that Ethiopia’s suspension from the AGOA has potential impacts that can exacerbate the economic challenges with the devastating conflicts, the COVID-19 pandemic, and the high inflation in the country. Therefore; enhancing productivity, value addition, and reduction of production costs through efficiency gains needs to be among the major focuses for Ethiopia to be competitive in international trade. Ethiopia should strive to persuade the US to lift the ban on AGOA. Home grown and continental market potentials for trade and development cooperation should be pursued. It is a proper time in history for Ethiopia in particular and for the African continent in general to frame aggressive and pragmatic policies to ultimately free themselves from the chains of exploitative arrangements and dominance by developed countries.

Key words: Zero Tariff, AGOA, Garment and Textile, Free Trade, Ethiopian Export