African Apparel Exports, AGOA, and the Trade Preference Illusion
AbstractThe African Growth and Opportunity Act (AGOA) is a preferential trade agreement between the United States and approved African countries, allowing duty-free and quota-free access to the U.S. market. Following AGOAâ€™s implementation in 2000, several African countries experienced a dramatic increase in exports to the United States. Nevertheless, AGOA exports, employment, and other benefits may prove to be short-term gains. As a form of temporary trade diversion from Asian countries, the increased exports may arise less from competitive advantages than from trade preferences that will erode over time. This paper focuses on garment exports from the African countries most affected by the preferential access with the United States under AGOA. An analysis based on ten-digit HS trade categories shows that African apparel enters the United States at sharply lower unit prices than similar products from China and India. Given Africaâ€™s higher costs, it is believed that this disparity results from specialized production in low-quality garments. We argue that export value and growth, often used to gauge the success of preferential trade agreements like AGOA, can be misleading. To assess the local contribution to the African economy of AGOA benefits, our paper examines value added in Kenya. Given information for each investment in Kenyan EPZs, we calculate local inputs as a percentage of sales and other measures. The results suggest that the real benefits of AGOA in apparel may be smaller than commonly believed.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by De Gruyter in its journal Global Economy Journal.
Volume (Year): 5 (2005)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.degruyter.com
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The rise and fall of (Chinese) African apparel exports
by Pierre-Louis VÃ©zina in The CSAE Blog on 2012-09-24 05:00:43
- Pierre-Louis Vezina & Lorenzo Rotunno & Zheng Wang, 2012.
"The rise and fall of (Chinese) African apparel exports,"
Economics Series Working Papers
WPS/2012-12, University of Oxford, Department of Economics.
- Lorenzo Rotunno & Pierre-Louis Vezina & Zheng Wang, 2012. "The rise and fall of (Chinese) African apparel exports," CSAE Working Paper Series 2012-12, Centre for the Study of African Economies, University of Oxford.
- Edwards, Lawrence & Lawrence, Robert Z., 2011.
"AGOA Rules: The Intended and Unintended Consequences of Special Fabric Provisions,"
Working Paper Series
rwp11-002, Harvard University, John F. Kennedy School of Government.
- Edwards, Lawrence & Lawrence, Robert Z., 2011. "AGOA Rules: The Intended and Unintended Consequences of Special Fabric Provisions," Scholarly Articles 4669675, Harvard Kennedy School of Government.
- Lawrence Edwards & Robert Z. Lawrence, 2010. "AGOA Rules: The Intended and Unintended Consequences of Special Fabric Provisions," NBER Working Papers 16623, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.