1) To find a ready market for the uncompetitive (and heavily–subsidized) US cotton yarns and fabrics.
2) To get access to cheap (slave) labor in sub-Saharan Africa - through infamous Export Processing Zones (EPZ) or better described as Enslavement Processing Zones- for the manufacture of garments made using US cotton yarn and fabrics and destined for the US market.
3) To generate huge profits for US-based garment traders who market and sell the garments thus produced back in the US.
1) US Cotton and textile industry ( i.e. industrial cotton growers, spinners, weavers, traders, etc.)
2) US garment industry ( traders, wholesalers, retailers, shippers, etc.)
African cotton farmers
Cotton and textile industry in sub-Saharan Africa ( ginners, spinners, weavers, etc)
US cotton subsidies & AGOA: The last nail in the coffin of the African cotton & textile sector…
Both, US (illegal) cotton subsidies and the AGOA are at the root cause of the collapse of the entire cotton sector in sub-Saharan Africa. US trade distorting cotton subsidies lead to a structural over supply of cotton, resulting in a decline of cotton prices on the world market. As a result, non-subsidized small-scale African cotton farmers are unable to compete and are driven out of cotton farming due to continuously declining prices of cotton and increasing prices of imported farming inputs resulting from unfair global Terms of Trade. As a direct result, the entire cotton sector in sub-Saharan Africa has collapsed and millions of small-scale African cotton farmers have been thrown deeper into poverty.
Third Country Clause under AGOA
The Third Country Clause under AGOA allows African countries to import yarn and fabrics from the US and from other countries outside Africa. Thus, under this model, the African cotton sector does not benefit since the yarns and fabrics used in the production of garments under the AGOA scheme is made from cotton grown and processed in the country of origin outside Africa. Furthermore, the yarn and fabrics have themselves been processed using subsidies and made with heavily subsidized cotton in the country of origin, thus further threatening and preventing the revival of the cotton sector in sub-Saharan Africa.
Thus, AGOA is exclusively serving the economic interests of the US Cotton , textile and garment industry at the expense of the cotton sector in sub-Saharan Africa. Furthermore, the 3rd country clause directly favors the US and other non-African cotton and textile industries at the expense of the local African cotton & textile sector.
In this biased and unfair context, how can Africa revive both its cotton and textile sectors? US Cotton subsidies have led to the collapse of the African cotton sector and AGOA has sealed the coffin of both the cotton and the textile sector. How can Africa produce its own fabrics if it is prevented from growing its own cotton…?
US Cotton subsidies and the AGOA are the last nails that have definitely sealed the coffin of the African cotton and textile sector.