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Tuesday, 13 December 2016

Duty-free trade key to building Africa supply chains

A group of ethical fashion producers and retailers, including German e-commerce giant Otto Group and shoemaking enterprise Soul of Africa, has called on the UK government to maintain duty-free access for imports from sub-Saharan Africa when negotiating new trade agreements with the region following the UK's eventual departure from the European Union.  "The rapid growth in many African economies offers opportunities for greater sustainability in our value chains, and there is a creative industries sector that adds value to African natural resources rather than exporting them raw," Baroness Lola Young of Hornsey, OBE, trustee of the Aid by Trade Foundation (AbTF), told a panel discussion in London last week. "This creates jobs, skills and livelihoods in African countries so that the benefits of production are shared amongst all those involved. For UK retailers this can render valuechains shorter, more manageable and more transparent, and will create new business opportunities," she added at the event organised by non-profit Proudly Made in Africa (PMIA) and Soul of Africa. For Andreas Streubig, sustainability division manager at the Otto Group, increasing textile value creation is also key to bettering the welfare of people in Africa. "The textile industry is a pioneering industry that paves the way for others," he explains. "But we must also be realistic. The basic conditions are still very challenging and some preconditions of textile mass production are still weak or even missing. Hence both sides – Western buyers as well as African suppliers – have to learn how to cope with the status quo and work together in an atmosphere of understanding, patience and eagerness to learn and develop." Most countries in sub-Saharan Africa currently have duty-free access to the EU. For Least Developed Countries (LDCs) this is under the Everything But Arms Initiative (EBA), while for more developed countries such as Kenya, zero tariff access has been negotiated under Economic Partnership Agreements (EPAs). Both schemes give African garments a 12% benefit over Chinese items, and a 17% advantage in footwear. The region's productive capacity has also been boosted by duty-free access for fashion items to the US under the African Growth and Opportunity Act (AGOA), giving products an advantage of between 16% and 32% in the US market.   For Albert Tucker, trustee of PMIA, it is essential that this duty-free market access is maintained as it makes the "crucial difference" for African supply chains engaging international buyers.