US Trade Agreement extended

A US law instituted in 2000 around the idea of “less aid, more trade” has been revised to extend assistance to African textile producers – including those in Lesotho -- who have been hard-hit by rising competition from China and the east in recent years. Intended to spur expanded trade between the United States and Africa and find ways that would increase the buying power of Africans, the new Africa-related measures, known as the Agoa Investment Incentive ACT of 2006, amends the original African Growth and Opportunity Act (AGOA) passed in 2000 to provide quota-free,duty-free access to the US for many African products, including textiles.

Links:

Profile JH partner network Kopano ke Matla Toantsong ea Bofuma

Website Kopano ke Matla Toantsong ea Bofuma

Profile JH Companionship

Facilitator, Cindy Easterday

Sites related to this page:

US government website for AGOA

As Lesotho’s main employer, the textile industry’s ups and downs in recent years have greatly impacted not only those employed in the factories and their families, but also other related industries such as local and freight transport, housing, and small food traders whose stalls line the streets outside, providing hot food, snacks and fruits to workers. ‘M’e Mostsami, Lesotho’s Director of Industry, says that for every person employed, 5 other lives are affected. She also agrees that AGOA has contributed positively to Lesotho’s employment, creating some 10 000 jobs to date. 

Internal and External influence

Following the adoption of the 2000 AGOA agreement, textile imports from Africa into the US grew significantly. At its height in 2003-04, 52,000 Basotho were employed in local factories.  As these factories are wholly foreign owned by primarily Taiwanese investors, the end of the Multi Fiber Agreement in late 2004 brought about a shocking change of events in Lesotho. With quotas being lifted, China and India now became major competitors in the US market.

Some of the Taiwanese investors in Lesotho found it more profitable to return home where they could produce more for less due to their cheaper labor market. So without notice, some factories were closed and over 10,000 people lost their jobs overnight. Instead of being contributors to the Lesotho economy, they became competitors.

Since then, efforts by government and the local labor movement to “win back” investors is working with South Africa, for one, finding a niche here. China is also investing big time in Africa and Lesotho, which will also have a future impact. So currently the industry is again moving in a healthy direction, employing some 49,000 people, back to nearly its highest level.

Impacts of the AGOA Extension Clauses

As to the extension of the AGOA agreement (passed by the US in December 2006), this is also seen as a positive move for Lesotho and other African countries. It extends until 2012 the exemption allowing Africa’s producers to use fabric from third countries to manufacture clothing. This is important because most African countries cannot yet make their own cloth.  Denim is produced in Lesotho and made primarily into jeans, but Lesotho also needs to diversity its production to include such items as knitted and high fashion clothes to be competitive and meet the 2012 deadline.  Investors along with government will be important components to its success or failure.

Another aspect of the extension, an abandoned supply arrangement, is designed to encourage clothing manufacturers in Africa to use their own fabrics and, where possible, source from one another. For example, Lesotho could sell surplus denim to South Africa who, in turn, would manufacture jeans and export them to the US. As well, mills in Lesotho could buy materials from Zambia to supply their needs.

An additional development is that agricultural research has shown that cotton can be produced in Lesotho, which could provide numerous paths of opportunity. However the viability and implementation of that is still to be seen.

‘M’e Motsomai recognizes the challenges ahead, primarily being able to produce our own materials and, in turn, finished products. Foreign investment and ownership are important but, as we’ve seen, can also have negative and positive impacts. A representative from the local clothing union also notes that the impacts of AGOA have been good however some local laws present limitations and biases that affect the workers. On the positive side of that, the government has initiated an Inter-Ministerial Task Force to consider such issues and look for solutions. The labor union is included in that process.

The Role of Los Ranchos Presbytery

The renewal of these provisions of the AGOA agreement first came to the attention of Kopano ke Matla through our partner presbytery, Los Ranchos, who had been following Lesotho’s textile industry for some time and actively promoting the purchase of jeans, shirts, etc from the GAP, Banana Republic and other stores carrying Lesotho made products. As the Network and presbytery began to discuss how the US church might begin to influence the US government in the passage of this measure, we began to see the possibilities of advocacy, creative strategies and influence by the broader church in true partnership with Lesotho.  And that was exciting!

Knowing the bill was due for passage by September 2007, the expectation was that this was clearly a project in the making. It was also a practical way to show our solidarity with our partner country -- that the church was serious in coming alongside them to influence change to unjust and unfair systems that affected poverty in Lesotho.

But, alas, by the end of the year the extension to the agreement had been passed and the opportunity to advocate had dissolved like a mist on a hot day! It was actually a little disappointing in a way – but we trust that was just to whet our appetites for the next opportunity. And we truly welcome the positive impact this will have on Lesotho’s textile industry and those whose lives are affected by it.

"Free and Fair" says IEC in recent Lesotho elections as local church bodies assist in the process

After several months of pre-election jitters and wide-spread concerns both within the country and beyond over political violence, the national election held in Lesotho on 17 February was declared “free and fair” by the IEC. This followed extraordinary efforts on the part of all the authorities and organizations involved to ensure equity and fairness in the process following an unplanned “snap election” called in November last year following the dissolving of parliament. This came following the defection of 18 deputies of the ruling party, led by a minister with a 53 year history with them, to a newly formed opposition party, thereby putting a 90-day election timetable in place.

Concerns over violence were high as Lesotho’s history since achieving independence from Britain in 1966 has been marked with military coups, states of emergency and unrest between short returns to democracy. An army mutiny in 1998 resulted in the intervention of the Southern African Development Community (SADC) military force, under the leadership of South Africa, during which much of the capital city, Maseru, was destroyed. So it was important for Lesotho to break away from its volatile political history through peaceful, well-run, credible elections, which it did!

Interestingly, the source of Lesotho’s political tension is not ethnic divisions as 99.7% of the population are Basotho. But as there is no real private sector here, a high premium is placed on being in government as the state is the main provider of salaries.

Naturally the run up to the elections put everything else on hold as many of the churches, groups and organizations were somehow involved in the process. Our local Christian Council of Lesotho, who is a member of the network, facilitated dialogues between members of the different parties in the various districts as well as acting as observers on the day of the elections.

PCUSA’s partner in Lesotho, the Lesotho Evangelical Church (LEC), had members of the Executive Committee and others acting as observers at polling stations throughout the country. And our network administrator, Hopolang Senekane, also acted in this capacity.

As an aside, Doug Welch and Doug Tilton (our Regional Liaison working in South Africa) happened to be visiting us that Friday and the Saturday of the elections and were able to “observe from afar” as they accompanied Rev Kometsi, the LEC’s General Secretary, as he acted as an official observer. When we’d been unable to organize much else in advance due to this event, Doug Welch’s comment was, “Well, at least we got to see the church in action!”

That we did – and it was encouraging indeed.

From the JH team of the Los Ranchos Presbytery

by Betty Thompson

In Los Ranchos  we have made some inroads on the AGOA issues and have decided that our source of info from here will be with Bread for the World for action with our representatives in Congress. 

We had a helpful phone conference with Dr. Carl Dudley from Hartford U. on the issue of working with congregations resistant to the Joining Hands program and its philosophy considering the constituency of Orange County.

Our book club continues to meet for dialogue around globalization and how consumerism in the US impacts and is impacted by the rest of the world.

A couple of new churches are showing a strong interest in joining us.

Blessings and Peace,  

Back to Archives >>>