AGOA: a last chance reprieve for the Madagascan textile industry

Is Madagascar going to benefit again from the American AGOA exports law, the verdict will be known in October. The decision will be directly influenced by the erection of the Transition’s institutions that are supposed to lead the country toward the return to constitutional order. The American authorities emphasized that the problem is in no way technical, but political. 

Madagascar government of has not been represented at the forum in Nairobi. John Hargreaves, vice president of the Madagascan tax free enterprises’ grouping revealed that “there is no guarantee that Madagascar will, by January 01st 2010, benefit from the law favouring African based corporations”. He explained that the AGOA committee’s recommendation and the American President have the last say in such matter. 

The international Contact Group’s mediator, Edem Kodjo, confirmed that the signature of the Transition’s charter is being considered as a step forward by diplomats. “All problems related to the AGOA and to the union European will have a different outcome”,  he announced with optimism. “The time has come for diplomats to alter their position, they are waiting for the government to be structured”, explained Mr. Kodjo. 

Andry Rajoelina, couldn’t and didn’t hide that his incentive for the signature of a political agreement with the other mobilities was the preservation of the AGOA related opportunities However, the president of the HAT had been a wee bit conceited to believe that sanctions and the other shapes of reluctance from the international community would thus be automatically removed. There was actually no recognition after Maputo. 

The country will be closely monitored during two months for the sake of democracy, governance and human rights, which are criteria held in account to benefit from the AGOA. According to current Transition’s trade minister, Madagascar asked for an additional postpone of the assessment of its file until June 2010. 

For the operators, the vital orders for deliveries by beginning 2010 are not compromised. Could Madagascar be suspended from AGOA, textile products exported on the American market would support custom taxes, and that would deter customers. 

A few 60 tax free enterprises are concerned by the AGOA. More than 100 000 jobs are directly threatened if the American market is lost. Without the advantages of the AGOA, the Malagasy textile industry will simply not be competitive. The tax free enterprises will be forced to lay personnel off. A serious social crisis is to be feared if the American market is lost. The AGOA file definitely contributed to boost the resolution of the Malagasy political crisis.